RITE AID TO PAY $7 MILLION FOR ALLEGEDLY SUBMITTING
FALSE PRESCRIPTION CLAIMS TO GOVERNMENT

WASHINGTON, D.C. - Rite Aid Corporation, a national retail pharmacy chain, has agreed to pay the United States $5.6 million and $1.4 million to participating states to settle allegations that the company submitted false prescription claims to government health insurance programs, the Justice Department announced today. Rite Aid is alleged to have billed government health care programs (Medicaid, Tricare Management Activity and the Federal Employee Health Benefits Program) for drugs that were never delivered to beneficiaries of the government health care programs and were later returned to stock.

Besides the District of Columbia, the participating states that will receive funds are Alabama, Arizona, California, Colorado, Connecticut, Delaware, Georgia, Idaho, Indiana, Kentucky, Louisiana, Maine, Maryland, Michigan, Mississippi, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Tennessee, Texas, Utah, Virginia, Vermont, Washington, West Virginia, and Wyoming. The settlement covers the time period from January 1, 1997 to December 31, 2001.

“American taxpayers should not be burdened with the costs of improper or false billings submitted to the government,” said Peter D. Keisler, Assistant Attorney General for the Department’s Civil Division. “The United States will take action against companies that make such billings.”

A portion of the settlement amount will go to Larry B. Friedman and Marion Tucker Altman, Jr., to settle qui tam or whistleblower complaints filed against Rite Aid Corporation. Friedman, who filed the action in the Eastern District of Pennsylvania (Philadelphia), will receive $1,065,000, and Altman, who filed the action in the District of South Carolina (Columbia), will receive $55,000. Under the False Claims Act, private individuals who bring suits against companies can receive a portion of the recovery in a case that the government joins.

Rite Aid entered into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The Corporate Integrity Agreement addresses the company's prescription billing procedures and other compliance-related issues.

The cases are entitled United States ex rel. Marion Tucker Altman, Jr. v. Revco, et al, Case NO. 2 96 1005 2 (D-SC) and United States ex rel. Larry B. Friedman v. Rite Aid Corporation, Case No. 97-CV-7889 (E.D.P.A.).

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