Kmart will pay $32.3M to resolve prescription drug fraud claims

Kmart, a subsidiary of Sears Holdings, agreed to pay $32.3 million to the federal government to resolve allegations its in-store pharmacies failed to report accurate prescription drug prices to government payers, according to the Department of Justice.

The agreement settles allegations that Kmart pharmacies gave discounts on generic drugs through various club programs to customers who paid for their medications in cash. Kmart allegedly did not disclose those discounted prices to Medicare Part D, Medicaid and Tricare. 

"Pharmacies that are not fully transparent about drug pricing can cause federal health programs to overpay for prescription drugs," said Acting Assistant Attorney General Chad A. Readler for the DOJ's Civil Division. "This settlement should put pharmacies on notice that there will be consequences if they attempt to improperly increase payments from taxpayer-funded health programs by masking the true prices that they charge the general public for the same drugs."

The allegations against Kmart were originally brought under the qui tam, or whistle-blower, provisions of the False Claims Act.  

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Editor's Note: The headline of this article was updated Jan. 2 to reflect the settlement amount of $32.3M. 



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