Whistleblower Lawsuit Accuses Drug Firms of Overcharging Medicaid

On Tuesday, the U.S. Attorney's office joined in a whistleblower lawsuit against three generic drugmakers who allegedly overcharged Medicaid by tens of millions of dollars, the AP/Washington Post reports.

Attorneys for the whistleblower -- Chicago pharmacist Bernard Lisitza -- allege that Par Pharmaceuticals and its two sister companies Alphapharm PTY and Genpharm sought higher reimbursements by getting pharmacies to dispense different and more costly medications than what was prescribed.

For example, the companies allegedly convinced pharmacies to switch certain generic capsules of Prozac and Zantac to Par Pharmaceuticals' tablet versions. Medicaid had a price cap for what could be charged for generic capsules of Prozac and Zantac, but not on generic tablets. As a result, the pharmacies received higher reimbursements and Par and its sister companies controlled the market.

The lawsuit seeks triple damages, plus the maximum damages allowed in states where Medicaid programs allegedly were defrauded, and reimbursement of plaintiffs' costs.

Michael Behn, one of the attorneys in the case, said damages and penalties could exceed $300 million. Lisitza is eligible for 15% to 30% of whatever the government recovers (AP/Washington Post, 9/6).