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news.CVS Caremark has reached a settlement agreement with the US Department of Justice and a number of state Attorneys General over dispensing the generic drug ranitidine in capsule rather than tablet form to medicaid recipients.
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Pursuant to the settlement agreement, the company has expressly denied engaging in any wrongful conduct. The settlement calls for payment by the company of $36.7 million, plus approximately $800,000 in investigative costs and other fees. These payments have been fully accrued for in prior fiscal periods and will not affect the company’s 2008 earnings results. The company agreed to settle the matter in order to defray the distraction, burden and expense of continuing litigation
The company also announced its entry into a corporate integrity agreement (CIA) with the Office of the Inspector General, which evidences the company’s strong commitment to compliance with the law as well as adherence to the highest ethical standards. Among other things, the CIA is applicable to the company’s retail and mail service operations and calls for maintaining the company’s existing compliance program, code of conduct and an employee ethics ‘hotline,’ as well as instituting certain employee training.