Walgreen, Par Accused of Plot to Overcharge

Walgreen Co., the biggest U.S. drugstore chain, and generic drugmaker Par Pharmaceutical Cos. (PRX) were accused in a lawsuit of swapping prescription-drug tablets for more expensive capsules to boost profits.

“Walgreen’s and Par engaged in at least two widespread schemes to overcharge insurance companies, self-insured employers and union health and welfare funds,” the United Food & Commercial Workers Unions & Employers Midwest Health Benefits Fund said in a complaint filed Jan. 11 in federal court in Chicago.

The drugs involved included generic versions of Zantac and Prozac, according to the complaint. The fund and other third- party payers paid millions of dollars more for the capsules than they would have for the correctly prescribed tablets, said the fund, which is seeking to sue on behalf of all third-party payers in the U.S. from 2001 to 2006.

The companies’ actions violated federal racketeering laws, according to the complaint. The fund is asking for unspecified cash damages.

Vivika Panagiotakakos, a spokeswoman for Deerfield, Illinois-based Walgreen, declined to comment on the filing.

In 2008, Walgreen agreed to pay $35 million to settle claims by the U.S. and 42 states that it was overcharging state Medicaid programs for ranitidine -- a generic form of the antacid Zantac -- and for fluoxetine, a generic form of the antidepressant Prozac.

Whistle-Blower Lawsuit

The Chicago case relies in part on that accord, which ended a 2003 whistle-blower lawsuit as well a lawsuit filed against the drugmaker in 2006.

The media relations department of Woodcliff Lake, New Jersey-based Par didn’t immediately reply to an e-mailed request for comment on the suit after regular business hours yesterday.

The case is United Food and Commercial Workers Unions and Employers Midwest Health Benefits Fund v. Walgreen Co. (WAG), 12- cv-00204, U.S. District Court, Northern District of Illinois (Chicago).

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.