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The Associated Press reported, on September 21, that lawsuits by whistleblowers have brought to light a practice called "restocking" that permits the double billing. The "restocked" drugs are returned by hospitals or nursing homes to pharmaceutical companies. They were often originally prescribed under the Medicaid program for patients who eventually died.

Most states allow the Medicaid medicines to be returned, unopened to the manufacturer so that they are not needlessly ruined. But, since there are no controls over the returned medicines, drug companies are free to sell them right back to the states.

A whistleblower lawsuit by a former administrator at a subsidiary of Ominicare, a pharmaceutical firm, contends that the company re-packaged "restocked" drugs and sold them back to Medicaid. The company defends its practice by claiming that they "only" charge state Medicaid programs 50 percent of the original price for the meds.

In another lawsuit, two pharmacists at Caremark Rx Inc. accuse the Nashville, Tennessee, firm of ripping off a retiree health plan for Floridas state workers by failing to credit the plan for returned medications.

The Bush administration has left the regulation of "restocked" drugs to the states. The Republican-controlled Congress has passed no regulations on the issue. This has left the courts with no power to require companies to give full refunds on returned drugs. Judge Jane R. Roth of the 3^rd U.S. Circuit of Appeals said, in response to the Omnicare case, "We are constrained by the lack of a regulation."

Regulation could be difficult to achieve. In the 1999-2000 election-cycle, the industry spent $177 million to pay 625 lobbyists in Washington, D.C. They spent another $20 million in campaign contributions and $60 million on issue ads. With the November elections approaching, the money is pouring in again.