VS&G Qui Tam Client Sues Rite Aid Pharmacy for Usual and Customary Charge Violations

On January 19, 2017, the federal district court for the Eastern District of Michigan unsealed a qui tam action filed by VS&G’s client, Adam Rahimi, against the Rite Aid Corporation, accusing the national pharmacy chain of illegally charging individuals insured by Medicaid and Medicare more than other customers for hundreds of prescription drugs over a period of almost ten years.  Pharmacies generally are required to bill government payers such as Medicaid and Medicare Part D no more than their “usual and customary” (“U&C”) charge to the “general public” for a drug.  Mr. Rahimi alleges that Rite Aid’s special discount “Rx Savings Program” has violated this rule by offering the public steeply discounted prices on hundreds of generic medications without making those same low prices available to Medicare and Medicaid.

As in a number of other False Claims Act cases filed against pharmacy chains for violations of U&C rules, the United States and the state plaintiffs declined to join Mr. Rahimi’s case following a lengthy, multi-year investigation during which the complaint remained under seal.  Mr. Rahimi and his counsel are pursuing the case on their own, on behalf of the federal and state taxpayers.  Mr. Rahimi served his complaint on Rite Aid on January 25, 2017.

VS&G Partner Shelley Slade is Mr. Rahimi’s lead counsel on the case.  Ms. Slade previously represented a whistleblower whose 2005 qui tam case alleging violations of U&C rules by the long term care pharmacy chain Omnicare led to multi-million dollar settlements between that chain and Massachusetts and Michigan.

Read Mr. Rahimi’s Second Amended Complaint here.