Pharmacist Blows Whistle on CVS - America’s Largest Pharmacy Chain Settles for $37 Million

CVS, America’s largest pharmacy chain, recently agreed to a $36.7 million settlement over charges that they defrauded taxpayers by overcharging Medicaid for prescription drugs. The federal and state investigation of CVS began in 2003 when Bernard Lisitza, an Illinois pharmacist, alerted authorities to CVS’s practice of overcharging Medicaid to fill prescriptions for ranitidine, the generic form of the popular drug Zantac®.

Mr. Lisitza, who will collect over $4.3 Million as his legal reward portion of the settlement, delivered evidence to the government that CVS was fraudulently switching prescriptions from the price-capped and less expensive tablet form of ranitidine to the more expensive capsule form in order to charge the government a higher price.

According to the government complaint, the illegal switch caused the federal government to pay CVS more than four times what it would have paid for the tablets. Capsules and tablets are considered different drugs and state pharmacy laws often prohibit the substitution of capsules for tablets. Because ranitidine capsules are so rarely prescribed, the federal government had not set a price ceiling as they had for tablets.

The case alleged that in switching the prescriptions, CVS had violated federal and state False Claims Acts which prohibit submitting fraudulent claims to the federal government. Companies that violate the False Claims Act may be found liable for damages up to three times the amount of the fraud, and $5,500 to $11,000 per false claim. The False Claims Act allows the whistleblower, known as the “relator,” to awards of 15%-20% of the government’s recovery in a settlement or lawsuit.

Pharmacists like Mr. Lisitza are in a unique position to uncover fraud and have played a critical role in helping state and federal governments recover tens of millions of dollars in false and fraudulent charges.

If you are seeing fraud on the government, contact us by calling 800.377.1812 for strictly confidential advice from experienced counsel, with no fee obligation.

Whistle-Blower

Due to a recent United States Supreme Court decision, speech made pursuant to a public employees official duties is not protected by the First Amendment. In response, the US Senate approved an amendment that would largely restore whistleblower protections for federal employees who expose waste, fraud, abuse, and threats to public safety.

The recent Supreme Court decision was that of Garcetti v. Ceballos. Mr. Garcetti was the District Attorney, Mr. Ceballos supervisor. Mr. Ceballos was a supervising deputy district attorney, meaning he supervised lawyers. He suffered retaliation and job loss after reporting, in a memo to his supervisors, about serious misrepresentations in a sworn affidavit in a case he was reviewing. The District Court granted summary judgment in favor of Garcetti. The court explained that speech made in an official capacity is not protected by the First Amendment because they are statements made as an employee and not as a protected citizen.

Ceballos appealed the decision to the Ninth Circuit. The Ninth Circuit held that the memo was protected by the First Amendment. The Ninth Circuit relied on previous case analyses of what is protected under the First Amendment. The Court’s position was essentially that a federal employee is a citizen and therefore has First Amendment protection limited only by restrictions necessary for the government to operate efficiently and effectively.

Garcetti, of course, appealed the Ninth Circuit’s decision and took the case to the United States Supreme Court. On May 30, 2006, the Supreme Court reversed the Ninth Circuit and declared that Mr. Ceballos memo was not entitled to First Amendment protection.

As a result of this decision, there is a distinct line between communications from an employee and those from a citizen. That is, when a public employee makes any statement to anyone, including co-workers, it is either protected as coming from a citizen or not protected as coming from within an employee’s official capacity.

Whistleblower advocates in the US Senate took action by approving an amendment to combat the decision in Garcetti v. Ceballos. This amendment attempts to protect federal employee whistleblowers. Senator Daniel Akaka (D-Hawaii) led the bipartisan group of Senators who aided in getting the amendment approved. Other Senators included Susan Collins (R-Maine), Charles Grassley (R-Iowa), Richard Durbin (D-Illinois), Carl Levin (D-Michigan), and Joseph Lieberman (D-Connecticut). This is a tremendous step toward protecting whistleblowers and restoring protection to pre-Garcetti levels. The next step for the amendment is to go before House-Senate negotiators who will write a final bill

Despite the set back of Garcetti v. Ceballos, things are looking up for whistleblower advocates as demonstrated by the Senate’s amendment. Keep your fingers crossed!

Hugh C. Thompson, a Whistle Blower Hero

Hugh C.Thompson, Jr. Certainly not a household name. Born in 1943 he died this past January. Who was he? He was a hero. He was someone who observed something that was very wrong and did something about it. He chose not to standby and watch a horrible wrong be committed.

Hugh C. Thompson, who at that time was Warrant Officer Hugh Thompson was an Army Helicopter pilot who while flying a mission came upon the My Lai massacre, in progress. Risking his life and life of his crew, he landed his helicopter, confronted the troops involved in the massacre and stopped it. To do so he was forced to threaten to fire on his own troops.

After stopping the massacre, he coordinated the air evacuation of the injured Vietnamese villagers. He returned to his base and immediately reported the massacre to his superiors. The officers who are accused of ordering the massacre, Lt. William Calley and Captain Ernest Medina gained extraordinary notoriety in the days and months that followed this most darkest of days in our country’s history. However, until the recent announcement of his death, I dare say that I didn’t know who this brave man was.

The type of courage displayed by Hugh C. Thompson is seldom glorified. Observing and reporting wrongful conduct by members of some organization is seldom considered in a positive fashion. Rather, such persons are labeled as snitches or stool pigeons. In spite of this fairly prevalent attitude in industry and in some levels of government, our Federal Government does recognize and reward those who are willing to step forward and report wrongful conduct when they become aware of such conduct.

Such recognition exists in the operation of our Federal False Claims Statute. People can report wrongdoing and be financially rewarded for doing so. Reporting those who seek to rob our country by making false or inflated claims for reimbursement from our government is heroic conduct. Our group of experienced False Claim Act attorneys stands ready to submit and prosecute your claims.

Eventually the heroic conduct of Hugh C.Thompson was recognized by the United States when he was awarded the Soldier’s Medal, the military’s highest award for bravery not involving direct contact with the enemy. This medal was awarded to Thompson and his crew exactly thirty years after the date of the massacre.