Two retail giants got snared in the same net this week, as the federal government stayed the course in busting Wal-Mart and Rite Aide for charging taxpayers for drugs that never reached recipients, and ended up back in company stocks. According to the Associated Press this week, Wal-Mart and Rite Aid agreed to pay millions in penalties to settle U.S. Justice Department claims against them. Rite Aid agreed to cough up $5.6 million to federal taxpayers, plus another $1.4 million to states. The Justice Department charged that Rite Aid billed government programs for drugs that never reached consumers, and did so for four years. For its part, Wal-Mart agreed to pay $2.8 million for dispensing partial prescriptions due to insufficient stock, and then billing the federal programs as if it had delivered the full prescription to consumers. The Wal-Mart false claims went on for an entire decade from 1990 to 2000. In both of these cases, employees inside Rite Aid and Wal-Mart blew the whistle on their employers, and under federal law, will share in some of the settlement both companies agreed to pay.
‘Our people make the difference’ Wal-Mart says about its workers. In this case, some Wal-Mart whistleblower made the difference — nearly $3 million difference. The employee who turned in Wal-Mart found a more lucrative way of making a living than by working in a Wal-Mart pharmacy. It is reassuring to know that Wal-Mart was ripping off the U.S. taxpayer for a decade by filing false drug claims for programs like Medicare and Medicaid. Just another example of the free market at work. Wal-Mart bills the federal marketplace for nonexistent drugs, and gets taxdollars back for free.
