03/28/2008 05:12 am ET | Updated May 25, 2011

CVS to Pay $37.5 Million to Settle Pill Switching Case

CVS is paying $36.7 million to settle allegations that the company defrauded the government by improperly switching patients taking generic Zantac to capsules from the tablet from of the heartburn drug. The company is kicking in an extra 800 grand to cover investigative costs.

Capsules, tablets, who cares? While the form of the drug (generic name: ranitidine) doesn't make a difference to the health of most patients, it matters for taxpayers. For patients covered by Medicaid, the capsules can cost four times as much as the tablets, according to a so-called whistleblower lawsuit filed by a pharmacist and joined by the feds and dozens of states, the WSJ reports.

The switching allegedly happened in CVS pharmacies between April 1, 1999 (April fools, taxpayers!) and Dec. 31, 2006. The company announced the settlement today, adding that it isn't admitting to any wrongdoing in the case. CVS said it stocked the capsules simply because they were cheaper for the company to buy, not out of any desire to get a higher reimbursement from Medicaid. The lawyers who brought the suit posted their own statement.

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