2 Retailers Settle Drug-Claim Suits

Wal-Mart Stores Inc. and Rite Aid Corp. agreed Friday to pay penalties to settle federal lawsuits alleging that they submitted false prescription claims to government insurance programs.

The Justice Department said Rite Aid, a drugstore chain operator based in Camp Hill, Pa., would pay the federal government $5.6 million and an additional $1.4 million to more than two dozen states.

The department said that from 1997 through 2001, Rite Aid billed three government programs for drugs that never were delivered to beneficiaries and later were returned to stock.

Bentonville, Ark.-based Wal-Mart will pay $2.8 million for dispensing partial prescriptions because of insufficient stock and then billing the three programs for the full quantities from 1990 through 2000.

In each case, whistle-blowers will receive a portion of the settlement. Under the False Claims Act, private citizens who bring suits against companies can receive a portion of the recovery in a case joined by the government.

“There was absolutely no intent on Rite Aid’s part to receive incorrect payments,” Rite Aid spokeswoman Jody Cook said Friday.

The practice stemmed from medicine shortages when patients went to pick up their prescriptions. Only a portion of the prescription would be filled, but the patient never returned later to pick up the rest, Cook said.

Wal-Mart spokeswoman Danette Thompson said, “Today’s announcement is a formal acknowledgment of the settlement and the changes Wal-Mart has already made to handling and billing practices regarding prescriptions that cannot be filled all at once.”

On the New York Stock Exchange, Wal-Mart shares fell 64 cents to $52.51 while Rite Aid shares dropped 4 cents to $5.34.