Walgreens Pays $269 Million To Settle Two Civil Fraud Charges

January 23, 2019

Whistleblower prompts investigation into inflated prices that began in 2012.

Walgreens Boots Alliance has settled charges with the U.S. Department of Justice that claimed the company charged Medicare and Medicaid reimbursements at higher rates than were available through its Prescription Savings Club prices, which constituted its usual and customary price. It also resolved allegations that it billed government payers for insulin pens that beneficiaries did not need. The investigation, which was prompted by a lawsuit filed by whistleblower Marc D. Baker in 2012, examined overbilling between 2012 and 2017. 

According to a press release from the Justice Department: “The first settlement, approved on January 16, 2019, by U.S. District Judge Paul A. Crotty and unsealed today, requires Walgreens to pay $209.2 million to resolve allegations that it improperly billed Medicare, Medicaid, and other federal healthcare programs for hundreds of thousands of insulin pens it knowingly dispensed to program beneficiaries who did not need them. The second settlement, approved on January 15, 2019, by U.S. District Judge J. Paul Oetken and unsealed today, requires Walgreens to pay $60 million to resolve allegations that it overbilled Medicaid by failing to disclose to and charge Medicaid the lower drug prices that Walgreens offered the public through a discount program. In both settlements, Walgreens admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act.” 

Baker will receive 21% of the successful $60-million settlement under the False Claims Act. Since 2012, more than 70% of all federal government FCA actions were initiated by whistleblowers.

Walgreens responded with the following release: “Walgreens is pleased to have resolved these matters with the Department of Justice. The company fully cooperated with the government and has admitted no wrongdoing. Walgreens is a company of pharmacists living and working in the communities we serve, and we have always taken the safety and reliability of the medicines our patients need very seriously. We are resolving these matters because we believe it is in the best interest of our customers, patients, and other stakeholders to move forward.

“The settlement amounts have been fully reserved for in the Company Consolidated Condensed Financial Statement as of November 30, 2018. In relation to these matters, Walgreens has entered into a Corporate Integrity Agreement (CIA) with the Office of the Inspector General of the Department of Health and Human Services. The CIA builds upon the company’s already existing comprehensive compliance program.”