Omnicare, Inc. has paid a sizable amount to settle Medicaid fraud charges brought by the State of Delaware. Delaware alleged that in filling prescriptions for senior citizens living in nursing homes, Omnicare had illegally switched the form of the medication between capsules and tablets to avoid price caps on the drugs. For example, the government had set limits on the price for tablets of Ranitidine, a generic form of the antacid Zantac®. But no such limit existed for Ranitidine capsules. Delaware alleged that Omnicare filled patients’ prescriptions for Ranitidine tablets with the expensive capsules instead, a swindle that increased the cost to Delaware taxpayers by up to 400%.

The practice was brought to light in a whistleblower suit filed by Bernard Lizitza, a Chicago pharmacist formerly employed by Omnicare. Lizitza was fired from the company after reporting the misconduct. The Delaware suit was filed under that state’s False Claims Act, which permits private citizens who know about fraud against the government to bring suit in an effort to help recover ill-gotten gains. The whistleblower then participates in a portion of the government’s recovery.

The United States and 43 other states had already settled similar charges against Omnicare in 2006.

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