Walgreens Pill-Flipping Scheme Costs Taxpayers Millions

Thanks to an anonymous whistle-blower, a Walgreens pill-flipping scheme has been blown wide open, according to CBS. “Pill-flipping” refers the practice of pharmacies that purposefully switch Medicaid patients to more expensive versions of certain drugs for the sole reason of collecting more money from the government. Naturally, when this happens, taxpayers pick up the bill. Athough, Walgreen’s officially denies any wrongdoing they have agreed to pay the government more than $35 million. Details, inside…

CBS explains the scheme,

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.

The article also says,

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.

Whether Walgreens’ pharmacists are secretly mocking you, or just being so incompetent that they prescribe a drug that causes a miscarriage, it seems they can do nothing right. Hopefully, this little multi-million dollar fiasco they’ve created will be a catalyst for change at the woeful pharmacy, but we won’t hold our breath.

Walgreens Accused Of Scamming Taxpayers [CBS]
(Photo: Okasan1)


Edit Your Comment

  1. At least they gave them the right drugs. Can’t we be happy about that?

  2. BoomerFive says:
  3. trillium says:

    @Git Em SteveDave wants to come with Lindsay…to see Eddie: Nope. While not Walgreen’s – my dad is having a severe issue with CVS. They can’t find his RX #s, they found scripts under two different names for him (last name with two “l’s” and/or one) and the humdinger – they have prescriptions for him that no one knows where they came from. Stuff that was for dis-eases he doesn’t have.

    I am curious as to what is happening to the drugstore industry in the this country and how much of it we have to blame on Big-Pharma and shenanigans like this. Are they just make stuff up now to prescribe to people in order to get more $$$?

  4. balthisar says:

    There *has* to be a “nation health care would have prevented this from happening” angle somewhere, but I just can’t find it. It’s already a state-delegated national health care plan that’s been footin’ the bill.

  5. toddvm says:

    How does Walgreen’s pay out $35 million dollars and not be wrong. Were they part wrong and part right? Were they right and decided paying out $35 million dollars was good for their bottom line?
    In my opinion, they were wrong…$35 million dollars wrong.

  6. SkokieGuy says:

    And this money is going to be used by the government how?

  7. ShadowFalls says:

    How do you deny any wrongdoing and then agree to pay? Sounds like a fulfillment of guilt to me… They are getting off way too easy.

  8. ThinkerTDM says:

    It’s a sad situation when people (and corporations) are not held accountable for their actions, but praised because they “at least” did something. Walgreens consciously ripped off the government? At least no one died! At least the sky is still blue!

  9. stacye says:

    @toddvm: I think it’s more like hush money. “If we agree to give you a boat load of money, then you can’t sue us, or hold it against us, later on.”

  10. trillium says:

    @stacye: Sad but probably true.

  11. MissTic says:

    A scary preview of universal healthcare. I just can’t see handing over something as vital and important as our healthcare to the govt. These people cannot even run their own dining rooms on the Hill.

  12. chemicalx9 says:

    I suspect this was done at the corporate level and not at the individual stores. They more than likely forced the stores to dispense what they called a primary generic meaning that when the store tried to submit for online billing the claim was viewed at the corporate level before it was sent to the third party and the walgreens adjudication system told the pharmacist which manufacturer / generic drug to use.

  13. dieman says:

    Believe me, the insurance companies get gamed just as much as government. The only way to fix the problem is to shut off the money pipeline (public and private) to health care, but then we’d probably have a ton of pissed off professionals.

    Most insurance companies in this case have formularies that would restrict such gaming — but if the government has a formulary thats too restrictive we call it ‘rationing’, even though the basis of most of our health care is rationing already.

  14. Kaz says:

    4/$9? That’s a really good price for Tombstone pizzas..

  15. PunditGuy says:

    Corporate malfeasance = government inability to handle medical care. WTF? Could it, perhaps, have more to do with an executive branch that has a stiff neck from constantly looking the other way?

    You want to trust your health care to companies that have a vested interest in providing as little care as possible while charging as much as possible. Great idea. How’s that working out for you?

  16. synergy says:

    @trillium: To prevent this type of thing from happening I always make a photocopy of my scripts before handing it over to anyone.

  17. drugdoc says:

    I am a pharmacist at Walgreens and have never seen this occur. The only time I have to switch a medication to something else is when the insurance company denies paying for something. One particular one I am always amazed, is that some insurance companies will only pay for Protonix and not pantoprazole.

    Besides, the government, at least in my state, has a very restrictive formulary. Pretty much they don’t pay for anything and everything needs a prior auth.

  18. Just another take: Medicaid pays pharmacists bubcus to fill prescriptions. Both Walgreen’s and the government are wrong. Pharmacies shouldn’t scam the government and the government needs to pay pharmacies an amount that isn’t going to drive them out of business… particularly the Mom and Pop pharmacies that have better service…

  19. rubella says:

    I know! Lets fight back by patronizing small owner operated pharmacies instead of corporate giants!

    Oh wait, we’ve legislated pharmacies so much that any locally owned shops are so expensive that your insurance won’t pay for your prescriptions there, and thus they are quickly going extinct.


  20. mikelotus says:

    @MissTic: universal health care does not have to be run by the government. i guess you think that the insurance companies are better? The pill flipping is happening with them too. so much talking out of one’s ass out here, amazing.

  21. antispoon says:

    This pill-flipping deal isn’t surprising considering that it has gotten progressively more difficult for every pharmacy to receive enough reimbursement to keep their heads above water. Now with Walmart, Target, and other randos offering the irresistible $4 prescription, big retail pharmacy chains that tend to dole out prescriptions for prices way over $4 are feeling the squeeze.

    PS: Although the chemo/prenatal vitamin mixup was a huge mistake, I’m pretty sure the pharmacist wasn’t “just being so incompetent that they prescribe a drug that causes a miscarriage.” Pharmacists don’t prescribe drugs.

  22. TechnoDestructo says:

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

    Dishonest. Not merely imperfect. “Imperfect” makes no judgement as to the nature of the imperfection. Call a spade a spade.

  23. meehawl says:

    A scary example of lightly regulated private healthcare companies ripping off national healthcare. I just can’t see letting something as vital and important as healthcare remain in the clutches of these amoral private companies. These people cannot even be trusted to dispense pills to seniors without robbing the We the People.

  24. FarfallaWhiles says:

    i had something similar to this happen to me at a Walgreens only mine wasn’t switched from a generic to a name brand, it was switched from a generic to another generic. i have been on Celexa for several years and a couple years ago i went to a different Walgreens to get my perscription filled because it was closer to my new home. because i was on Medicaid, i was already getting a generic form of Celexa but at this particular Walgreens they told me that the generic version that i had been getting was not covered my Medicaid and they switched me to another generic. i don’t know if the generic they switched me to was more expensive or not but my co-pay was the same. i just found it kind of odd since every other Walgreens had no problems and never told me that Medicaid didn’t accept the particular generic that i was receiving.