Walgreens Accused Of Scamming Taxpayers

A Look Inside What's Been Called America's Biggest Pharmacy's Pill-Flipping Scheme

(CBS)  It's America's biggest drugstore chain.

“Beyond the reach of cell phones and superhighways, there’s a place called ‘perfect,’” rings the familiar ad for Walgreens.

In a perfect world, however, Walgreens wouldn't be accused of ripping off taxpayers. But we're nowhere near perfect. CBS News investigative correspondent Sharyl Attkisson reports.

Michael Behn, a former federal prosecutor, said, “The pharmacies nationwide had a pill flipping scheme.”

Behn helped expose how Walgreens exploited a Medicaid loophole.

To save taxpayer dollars, Medicaid limits how much it pays for popular forms of drugs.

But it doesn't bother to set price-ceilings on rarely-used versions.

Take generic Zantac, or ranitidine, for example. The antacid is a huge seller in tablet form. Medicaid limits payment to 34 cents apiece.

The same drug as capsules has no price-ceiling because it was so rarely-prescribed. Medicaid pays $1.25 each.

Walgreens figured it could pocket millions by switching patients from tablets to capsules.

Behn explained to Attkisson, “These are the ranitidine capsules.”

“This is what was being prescribed?” Attkisson asked, pointing to the tablets. “And this is what was being given?” pointing to the capsules.

Behn replied, “Correct. At three times or more the cost to taxpayers,” Behn answered.

The scheme was blown wide open by a whistleblower, a pharmacist who doesn’t want to appear on camera. He said Walgreens rigged its computers to automatically switch to the most expensive type of pill.

“The only way in which a computer system could switch from a tablet and a capsule, is if someone went in and manipulated the computer system,” Behn said.

Attkisson asked, “And the fact that this was done nationwide indicates this was a corporate policy?”

Behn responded, “That’s what we alleged.”

By gaming the system, Walgreens managed to change over almost all Medicaid customers from cheap generic Zantac tablets to pricy capsules.

In Florida alone, it cost taxpayers an extra $1.2 million the first year.

And the pill-switching went on for several years nationwide, including other prescriptions: generic Prozac (fluoxetine) for depression, and generic Eldepryl (selegiline) for Parkinson's.

Walgreens denies wrongdoing and declined to be interviewed.

But they recently agreed to pay back the government more than $35 million.

And they're not the only ones. CVS and Omnicare quietly settled similar cases coughing up $86 million more.

The whole pill-flipping episode proves just how imperfect some drugstore chains can be.

[smurfcrusher]

leefnneadle is clearly on drugs - capsules would be my guess. Space capsules.

[cyberus-2009]

----
One less reason to shop at Walgreens.

Posted by krisinal
----

Want another reason?

Dispensing charge. We found out about this one when we had to get a prescription partially filled (5 days worth .. better half dropped open bottle some went into drain) .. the cost of the drug for 5 days was $4 .. the dispensing fee was $15!!!!!!!!
We switched that day to a pharmacy that only charges $5 .. and no fee for partials.
We figure we are saving the gov''t $210 on just dispensing fees a month. Sad thing is if we had never needed a partial and had to pay cash we would have never known.

[pete_in_az]

One less reason to shop at Walgreens.

Posted by krisinal at 08:16 PM : Jun 13, 2008
---

Yeah and they are owned by that cult that has the little trumpet on the spire at their compounds...

[fredhetz]

One thing I don''t understand about this is why a loophole exists where capsules don''t have price-ceilings. I understand that the article says it''s because they''re less-prescribed. But why even allow for that to happen?

[ofbyfor1]

Why are we surprised? Modern corporate America has no shame. It''s just greed, greed, greed. All the while with many of them paying CEOs and other execs obscene compensation packages while laying off the ''Average Joe''. Halliburton ripping off the taxpayers, etc. I still can''t understand why people aren''t out in the streets over this garbage.

[Tess1231]

Since these drug retailers are paying back Millions of dollars, when can the taxpayers, (who in the story picked up this tab), will be receiving refunds ?

[element51]

This is an outrage. So they pay back a small per cent of what they stole and walk away scott free. If an average citizen did something like this they wouldn''t see daylight for years. But we must remember that Walgreens is owned by a "religious organization" who would never do anything that wasn''t on the up and up. It''s time for government to get of their arses and start going after these thieves. They are stealing the taxpayers money at a time when the country is in terrible financial shape. I will never set foot in a Walgreens again and nothing would please me more than to see them in bankruptcy court. The same goes to the others who have been doing the same thing. It''s no wonder that the system is in deep trouble.

[barbaraf4]

"The whole pill-flipping episode proves just how imperfect some drugstore chains can be."

Drugstore chains are inanimate objects. The people who set policy are criminal, not "imperfect".

[me4prezz]

I have been going to Walgreens for years for my prescriptions and this freaks me out. How much extra have I paid out of pocket to earn them more money??? I am pretty sure I am switching pharmacies after this scenario!!! They should be in more trouble than just paying back some money!!!!

[mcvpharmd]

You don''t pay any more, it is the insurance company that has to pay more, if anything at all... WAG actually doesn''t make more either, contrary to this piece... the aquisition cost of the other dosage form is MUCH higher, therefore the net difference is virtually nill. WAG and other pharmacies settled as it is cheaper to pay 35 million than go through years of litigation and possible slander. This case was from 4 years ago, and it is just now being talked about... the margins that chain drug stores get on prescription drugs is VERY small, in fact Medicaid consistently reimburses at a LOWER rate than they can even fill the script for. Pharmacist time, rent, utilities, insurance for the business, drug cost, technology, etc... all go into the dispensing of a drug. Most Medicaid plans reimburse at a rate of 6 or 7 dollars over the COST of the drug, hardly enough to justify all of the other aforementioned expenses. This is simply MEDICAID trying to save money, the are exploiting the fact that big chain drug stores would rather settle out of court than go through years of litigation... it is a money making scheme on the Medicaid''s part, the media needs to tell the other half of the story!

[neobrian-2009]

W ,Walgreen,..Big Biz,.. Big Insurance,..ALL Re-CONS
ARE SCAMMERS ! OUTLAW RePubliCONS ! IMPEACH W
IMPEACH Dicck,...Declare ALL RE-CONS INSANE !
Split up All RE-CON Monies into a fund,..Then spend this fund on National Health Care For Democrats ( Re-Cons Won`t need it,They`ll ALL be Asylums !
" SCUMBAG ASYLUM SLUMS " The New neighborhood for ALL Corrupt Re-CONS ! And For Those who Enable them and Uphold them ( Abetting Criminals IS a Criminal Offense ! )
This November WILL See " THE BIGGEST FALL " EVER !
EVERY RE-CON on the Ballot WILL LOSE !
AMERICA IS Returning to The People !
Enron,Walgreens,Halliburton,Aetna,Boeing,The Carlyle Group,KBR,..and ALL OTHER CRIMINAL Organizations Will GO DOWN !
END THE INSANITY ! IMPEACH W ,..before He Flees to Dubai OR Paraguay !

[babooph]

And the propaganda system brainwashes all to desire a "businessman " for political office.At least they will not "become" crooked-no good person will be made baqd.

[l8c6]

MCVPharmD

Insurance companies pay? Insurance companies are rackets, major money mills that are private profit driven organizations.

[l8c6]

All the republicon politicians in government with a government paycheck, retirement pension and socialized medicine for life hate big government...big public government to be exact. Private government, well now, that''s a whole different animal. Private governments serve their special interest constituency, big business and deep pockets. It''s o.k. for them to dip into the treasury but don''t dare go to Wal-Mart and pick pocket a toxic item made in China---they warn with big signs "We Prosecute". Remember Wal-Mart once said. "Buy American" yeah, su*ckaas. Wal-Mart, Walgreens, Waliburton and Wexxon, they are all proud to be "Americon"

[oneworldusa]

I''d like to see an independent audit paid for by these companies, and customers reimbursed for overpaying for prescriptions in addition to the medicare system.

My spouse''s company made ''an error'' they admit in how they entered the group insurance plan, denying the 90-day by mail prescription benefit. It admits the mistake, but won''t provide the benefit as stated for at least the LAST 2 YEARS IN THE LITERATURE THEY PUT OUT.

Be expecting a sizeable lawsuit against a major company soon. It was great it admitted the ''error'' but the fact that it failed to offer any kind of apology or reimbursement of patient costs based on their own admitted error, is going to cost them dearly. Just watch.

[wogerwabbit]

Posted by MCVPharmD at 10:47 PM

You sound like an industry shill. I''m a victim of your industry. There''s a target on your back. Enough''s enough... your day is done. Long live America!

[kmccliment]

Track down the people responsible for giving this order and send them to prison and fine them personally. Corporate America needs a wake up call!

[l8c6]

Track down the people responsible for giving this order and send them to prison and fine them personally. Corporate America needs a wake up call!

Posted by KMCCLIMENT

In the early 1960''s there was a television show about mafia activity in the 1930''s. The program was called "The Untouchables" That''s what organized crime on behalf of global corporate america feels like in the United States today. It seems we''re dealing with the untouchables. No one is left to take on organized crime at the highest levels. The very top owns the politicians and the supreme court. He who owns the gold rules. That wasn''t to be the american dream. Old world order has taken hold. The United States as a great social experiment appears deceased after a bit over 200 years. The stability of ruling oligarchies are returning bringing about the old world order warmed over and called "new".

[frankive]

to 18c6 your words are great!

[wardoglrs]

They paid there fine? Any one else smell a rat?. What no prison? No Jail. Just a fine thats nice thats real nice. Anybody up for some shopping at wallgreens?. We can steal there supplies and get away with it. What about the tax payer''s money oh thats right the tax payer paid that fine through there profits they stole from tax payers and all is well and were open for bizz.
UnFlippen Real :-{

[brianbwb-2009]

Posted by l8c6

Absolutely true, however all is not lost, remember what happened in France when the excesses of the aristocracy became too much for the people to bear? That''s right, the French Revolution.

I do, however think that the cycle between excess and collapse is growing shorter, especially now that information can be shared so much more rapidly.

[sandycat2]

Imperfect? This pill-flipping scheme is dishonest, is what it is. What? Can''t the media call things as they are any more?

[element51]

I always chuckle when I read a post where someone talks about a revolution. Trust me, it would not work. The power elite now have a private army "Blackwater" and they have the latest in sophisticated weaponry. Any attempt to take to the streets would be met with a bloodbath of epic porportions. Citizens would be slaugtered in wholesale lots then martial law would be declared and that would lead to mass arrests and special detension centers for re-education...or death. There may have been a time when this could have been done but those days are gone. All we can do is learn to live with less and get by the best we can. Welcome to the "new" old world.

[apprxam]

Great story. Just timely enough to cast doubt on any move to nationalize healthcare by emphasizing crimial vulnerabilities.

There will be no prison.

[r9119111]

I always chuckle when I read a post where someone talks about a revolution. Trust me, it would not work. The power elite now have a private army "Blackwater" and they have the latest in sophisticated weaponry. Any attempt to take to the streets would be met with a bloodbath of epic porportions. Citizens would be slaugtered in wholesale lots then martial law would be declared and that would lead to mass arrests and special detension centers for re-education...or death. There may have been a time when this could have been done but those days are gone. All we can do is learn to live with less and get by the best we can. Welcome to the "new" old world.

Posted by Element51 at 03:10 AM : Jun 14, 2008

"Trust me, it would not work." You seem to have first hand information. Where did you get your information?

[floydzeppl]

Good lord. Apparently all Corporations are sleazy Republican.

[bgwinnett]

I still can''''t understand why people aren''''t out in the streets over this garbage.

Posted by ofbyfor1 at 09:04 PM : Jun 13, 2008

Cus thanks to 500+ Cable TV channels, I Pods, X Boxes, meaningless sports, consumerism, Religion, MSM gatekeepers etc(none of these existed 200 years ago except religion -- this alone proved insufficient to ward off rebellion, so the elite foisted upon us all these "opiates" instead to subdue us with great effect)... most people are still totally oblivious to whats going on, and when they do wake up (can''t be long now) -- the elite will be prepared for it this time. Marshall Law Fema camps anyone?

[samrensho]

What''s the problem. Walgreen''s has seen the guvment sticking it to the tax payers for years, with impunity, so they figured they''d get in on the action. Business as usual.

[liberalme]

Aww feel sorry for the Walgreen family-they have several houses to keep up---one here in Florida and a staff of maids and butlers--What''s the problem?

Guess I''ll switch to Walmart.

[hypnotoad72]

most people are still totally oblivious to whats going on, and when they do wake up (can''''t be long now) -- the elite will be prepared for it this time. Marshall Law Fema camps anyone?

Posted by bgwinnett
-----------------------

Okay, so you''re not oblivious to your self-proclaimed conspiracy. Apart from bleating on about it in ways that won''t convince anybody, why aren''t YOU doing anything? Perhaps you don''t believe in what you say? It''s like Al Gore; babbling about global warming and then finding out how much he uses to heat his homes, flying everywhere, being on Apple''s board for years and yet Apple STILL has one of the worst records on "green" actions...

Sorry sir, but YOU need to wake up.

[hypnotoad72]

Good lord. Apparently all Corporations are sleazy Republican.

Posted by FloydZeppl
--------------------

Not all corporations are sleazy and not all are Republican.

I do so hate glib generalizations, but I''ll agree some corporations do sick things - thank you CBS for pointing out Walgreens'' bait-and-switch... that''s sleazier than Spitzer or Craig, albeit not by much...

[hypnotoad72]

Cus thanks to 500+ Cable TV channels, I Pods, X Boxes, meaningless sports, consumerism, Religion, MSM gatekeepers etc(none of these existed 200 years ago except religion -- this alone proved insufficient to ward off rebellion, so the elite foisted upon us all these "opiates" instead to subdue us with great effect)...

Posted by bgwinnett
--------------------

So "I Love Lucy" was someone''s attempt to quell the populace?!

When Nolan Bushnell invented Pong and, later,

Do you really know what WAS happening 200 years ago? Do you have a functioning time machine?

[hypnotoad72]

(oops, hit ''Enter'' too soon)

When Nolan Bushnell invented Pong and, later, Atari - a company that spawned a whole new industry, and all in the early 1970s*... that was really a clandestine attempt to keep people passive. You really believe that?!!


* The early 1970s: A time when drug-stoned hippies thought that drugs, VD, and loud music was all that was needed for world peace...

[rowdywicca]

Oh wow, let''s just all rush off to WalMart and buy drugs from China! LMAO!

[neobrian-2009]

Corporate USA,as Defined by W !
W WILL GO DoWn in History as
ABSOLUTELY ,Far and BeloW as The W orst Resident
to EVER Occupy the W hite House
W mismanaged to lose our country`s respect W orld W ide
He LIED to Start a Disastrous W ar
He Shredded our constitution
Corporate GREED IS his Biggest policy
Corporate Thugs are his advisers
His Only accomplishments were Stealing elections
SHRUB`s " Shrubbies " Will Jump ship,..Telling ALL,.e.g.Scott McClearhead
For those who stood by ( gutless )They Will Be Slaughtered in the Upcoming election
W is a Perfect Example of What can (and Did ) happen when a government IS Hijacked !
NO MORE RE-CONS !!!!!
DO NOT let These CRIMINALS ( The GOP sect ) back in your homes !
NEVER,EVER,under Any Circumstances let Your guard doWn," Remember,Friends Never Let Friends Vote republiCon "

[itgranny]

I can''t help but wonder who helped Medicare write up the rules; lobbyists for the drug industry? It sure seems like it. This is exactly what happens when you have industries in our polititian''s pockets. They know the in''s and out''s and will design policies and practices with loopholes big enough to walk an elephant through.

[jennasmith2]

When will the presidential candidates & congress start promising to reform the pharmaceutical industry? When h*ll freezes over?

[skinnyminny2]

Greed, greed greed. How much is enough for some people? I guess the only good thing to come out of this is that eventually those who take advantage of others will get found out. A$$*oles.

[itgranny]

jamesm12341 : this is a prime example of why the gov. needs to get into it further. Drug companies, oil companies, haliburton etc. has one thing in mind, making their own top people rich. Lie, cheat, steal, don''t matter to them how they get our money. If there''s competition in the way, merge and then the people have no choice but to pay their ransom.

This idea that unchecked capitalism is the only way that this country can work is bolongna. Take a look around you! We need to start getting some rules that don''t just apply to us little people, but to everyone.

[omnibus66]

why do you people always look to the government to do things for you?

Posted by jamesm12341 at 09:43 AM : Jun 14, 2008
-----------------

Because we the people empower the government to do so through the Constitution. One of the requirements placed upon the federal government is "to provide for the general welfare", and that would seem to include stopping corporations from ripping off taxpayer dollars.

Typical Republican whining about the government actually doing something worthwhile, rather than robbing the poor and giving to the rich.

[liberalme]

why do you people always look to the government to do things for you?

Posted by jamesm12341 at 09:43 AM : Jun 14, 2008

You idiot! The government in this country works for US--they are (sometimes mistakenly) voted in and PAID to run this country with the best interest of the citizens.
They decide our taxes, laws and are expected to uphold the Constitution our forefathers laid out.

The government does provide a lot for this country and other not so fortunate countries.
Not everyone is as fortunate as you not to need the government for anything, however you have USED to government throughout your life ie:education for one thing and only you know if you are currently using any government program, which if you are, is why you are so adamant at other people not using it--you want it all for yourself!

Your posts are that of a person who has been over phscho-analyzed to the point where you are consumed by it.

You lack of empathy for people less fortunate than you leaves you to be a shallow sub human being.

Crawl back under the rock you came from.

[l8c6]

why do you people always look to the government to do things for you?

Posted by jamesm12341 at 09:43 AM : Jun 14, 2008

This is the spin of deceit the right wing neo cons have been issuing. There will always be government, always has been and always will be. An illusive elite resent the people''s participation. Reagan complained of big government on the backs of the people. He used the prejudice people feel toward welfare recipients etc. to create this anti-government sentiment. Of course, he did this with a whole lot of illusive wealthy supporters who then were able to drum up the support of the ignorant masses who with out foresight sold off their children and grandchildren''s posterity.

The United States is gradually and systematically falling prey to a privatized government which will operate wall street style. In other words, elections will be held wall street style in which the largest shareholders will determine outcomes. The neo cons hate big public government with allows for maximum participation of the people. Neo cons seek to enjoy huge private government ready to take from the greater society in order to serve a small number of the largest shareholders.

[l8c6]

Neo cons seek to enjoy huge private government ready to take from the greater society in order to serve a small number of the largest shareholders.

Posted by l8c6

There are so many examples of this throughout the history of humanity the world over. One example was king Ludwig of Germany in the late 1800s. He bankrupted the Bavarian treasury building a series of private castles where at tax payer expense he hosted private orgies and honored himself. It''s quite incredible to visit the castles that were built and imagine that these huge buildings requiring the best stone cutters, metal workers and wood finishers were for one man''s privatized government. Of course revolution does eventually come and throughout history it''s often bloody as the elite fortress themselves with armor and militia via funding through the taxes of the people that seek revolt.

The very wealthiest will of course argue they pay all the taxes and are burdened by the masses. This attitude is quite plainly anti-social at its base.

[rowdywicca]

I can''''t help but wonder who helped Medicare write up the rules; lobbyists for the drug industry? It sure seems like it. This is exactly what happens when you have industries in our polititian''''s pockets. They know the in''''s and out''''s and will design policies and practices with loopholes big enough to walk an elephant through.


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Posted by itgrammy at 09:06 AM : Jun 14, 2008

Strange isn''t it? Our DNC took over Congress two years ago, and haven''t passed on piece of legislation to try to put the lid on pharmaceuticals!

[barbaraf4]

"The whole pill-flipping episode proves just how imperfect some drugstore chains can be."

Drugstore chains are inanimate objects. The people who set policy are criminal, not "imperfect".

[rowdywicca]

It''s also strange that when I''ve needed pharmaceuticals, I just ask my doctor for samples, and get them FREE!!!

The other strange thing is that for a lot of chronic diseases you can find solutions in alternative medicines, and control your diet so you don''t have to depend on pharmaceuticals. But most people are too lazy to change their lifestyles and would rather rely on a damned pill that eventually attacks your liver and creates worse symptoms! I have a friend who is a type II diabetic completely controlling it with diet alone!

And of course there''s the other half that''s hooked on some kind of feel good pills that basically make them zombies!

Autoimmune diseases can also be controlled with diet! If you don''t eat hamburgers and KRAP for every meal, you don''t have to hurt so damned much and can live with a minimum of pharmaceutical help instead of gagging down a pill every day!

America needs to get real, and stop walking out of the doctor''s office with a handful of prescriptions!

[itgranny]

RowdyWicca:yes it is strange. Could possibly have something to do with not having enough to over ride a veto (children''s health care bill for example). Hopefully, November will change that.

[barbaraf4]

"I have a friend who is a type II diabetic completely controlling it with diet alone!" Posted by RowdyWicca
~~~~~~~~~~~~~~
Type II diabetes in most cases can be controlled with diet and exercise (you have to be very diligent); however there are exceptions.

Type I cannot be controlled with just diet and exercise, although both are an important component of the normal treatment plan. For this one, you need insulin.

[rowdywicca]

RowdyWicca:yes it is strange. Could possibly have something to do with not having enough to over ride a veto (children''''s health care bill for example). Hopefully, November will change that.


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Posted by itgrammy at 10:56 AM : Jun 14, 2008

Strange isn''t it, that my 25 employees who have children, have NEVER been denied health care! Even if they don''t have insurance! Not in all the years republicans have been in control. During the Clinton or the Bush years either one!

[rowdywicca]

But is sounds good, doesn''t it, when your gas bags like Michelle and Barak Obama completely attack your country!!! Wooooo hooooooo!!! Giddyup! Let''s all hate our country!