The U.S. Department of Justice (DOJ) recently announced that KMART Corp. (Kmart) has paid $1.4 million to settle a qui tam lawsuit brought by a former Kmart pharmacist under the False Claims Act (FCA). The lawsuit alleged that Kmart’s retail pharmacies provided illegal inducements to Medicare beneficiaries, in violation of the FCA and the Federal Anti-Kickback Statute, by allowing customers to use drug manufacturer coupons to reduce or eliminate prescription co-pays. The effect of this program, as alleged by the government, was to incentivize the purchase of brand name drugs over generic drugs, resulting in increased costs to federal healthcare programs without any medical benefit to the customer. The lawsuit also alleged that Kmart provided improper incentives to Medicare beneficiaries by offering discounts on gasoline purchases based on the number of prescriptions filled at Kmart pharmacies.