Pharmacy scandal alledged

By Amy Green, Associated Press writer

NASHVILLE, Tenn. -- Taxpayers are getting shortchanged by a common practice in pharmacies: Druggists underfill some prescriptions when they run short on medicines, but still bill government insurance programs for the full amount.

Authorities say the practice, called "shortfilling," costs taxpayers tens of millions of dollars a year because it is usually done with Medicaid patients and others who use federal health programs.

Two of the nation's largest drug store chains have recently settled legal claims over shortfilling. The Justice Department says other cases are pending against additional drug stores but won't elaborate, saying the lawsuits have been sealed.

"We believe the practice is widespread, but I can't give you the specifics of the extent of what we're looking at now," spokeswoman Chris Watney said. "It's a problem that could happen at any pharmacy."

When a pharmacist "shortfills" a prescription, the customer is usually encouraged to return later for the rest of their medication, federal authorities say.

Many people fail to return, but some pharmacies still charge government health programs for the full prescription.

Kendall Lynch, director of the Tennessee Board of Pharmacy, said the computer systems many pharmacies use to bill government health programs cannot pro-rate shortfilled prescriptions.

"You have to do it manually and I don't think I have to tell you how much more (time-consuming) it is do it manually," Lynch said.

The nation's largest drug store chain, Walgreen Co., agreed in September to pay $7.6 million and revamp its computer system to track and appropriately bill for partially filled prescriptions. The move resolved claims with 25 states and Puerto Rico.

Florida and Tennessee filed similar claims as part of a federal suit against Eckerd Corp., the drug chain owned by J.C. Penney. Tennessee settled its portion of the suit last month for $200,000.

The lawsuits against Eckerd and Walgreen were originally brought in 1995 by a whistle-blower, Louis Mueller, an Eckerd pharmacist in Clearwater, Fla., who watched others shortfilling prescriptions. Mueller says he complained to a supervisor but got nowhere, so he sued. The Justice Department began investigating in 1996 and joined the lawsuits in 1998.

The Deerfield, Ill.-based Walgreen was accused of shortfilling 4 million prescriptions and overcharging government health care programs $21 million.

The lawsuit against Largo, Fla.-based Eckerd, the nation's fourth-largest chain, charges it shortfilled 180,000 prescriptions and overcharged $11 million.

Mueller's complaint said Eckerd required pharmacists to pro-rate the price of partially filled prescriptions for cash-paying and privately insured customers, but not for those covered by Medicaid and other government health programs. Walgreen did the same thing, federal authorities say.

Walgreen and Eckerd denied any wrongdoing.