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Walgreens Agrees to Settle Three Civil Fraud Lawsuits Totaling Over $270 Million

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Walgreens Boots Alliance, Inc. ("Walgreens") has agreed to pay $269.2 million to settle two whistleblower lawsuits accusing it of overbilling federal healthcare programs for over a decade.  In both settlements, Walgreens "admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act".  The U.S. Department of Justice made the announcement on January 22, 2019. In addition, Walgreens recently settled another False Claims Act claim, although the monetary value is modest in comparison with the first two.   In the third settlement, Walgreens agreed to pay $3.5 million to the U.S. and the State of Wisconsin to settle allegations that, from 2011 to 2014, Walgreens violated Wisconsin Medicaid rules by dispensing routinely stimulant medications to Wisconsin Medicaid beneficiaries without first verifying that the prescribing physician ordered the medication for a medically appropriate treatment.  

Walgreens Boots Alliance, Inc. ("Walgreens") has agreed to pay $269.2 million to settle two whistleblower lawsuits accusing it of overbilling federal healthcare programs for over a decade.  In both settlements, Walgreens "admitted and accepted responsibility for conduct the Government alleged in its complaints under the False Claims Act".  The U.S. Department of Justice made the announcement on January 22, 2019. 

The pharmacy chain will pay $209.2 million to resolve the first whistleblower claim that it improperly billed Medicare, Medicaid and other federal programs from 2006 to 2017 for hundreds of thousands of insulin pens it dispensed to patients it knew did not need them.  Walgreens is required to pay approximately $168 million to the U.S. and approximately $41.2 million to state governments. 

Walgreens will also pay $60 million to resolve the second whistleblower claim that it overcharged Medicaid from 2008 to 2017 by failing to disclose and charge the discount drug prices available through its Prescription Savings Club program (PSC).  As a result, Medicaid programs paid Walgreens more in reimbursements than they would have had the PSC pricing been disclosed.  The company will pay $32 million to the United States and approximately $28 million to state governments. 

Two Walgreens pharmacists filed the original complaint concerning the insulin pens in July 2015. A pharmacy manager in Florida filed the original complaint concerning the drug price discounts in January 2012. Both lawsuits were filed under seal.[1] 

In addition, Walgreens recently settled another False Claims Act claim, although the monetary value is modest in comparison with the first two.   In the third settlement, Walgreens agreed to pay $3.5 million to the U.S. and the State of Wisconsin to settle allegations that, from 2011 to 2014, Walgreens violated Wisconsin Medicaid rules by dispensing routinely stimulant medications to Wisconsin Medicaid beneficiaries without first verifying that the prescribing physician ordered the medication for a medically appropriate treatment.  They further allege that by failing to verify the medications, Walgreens dispensed and billed Wisconsin Medicaid for medically unnecessary medications.  The settlement states allegations only; Walgreens did not admit liability for the allegations.

The investigation resulted from whistleblower lawsuits filed under the qui tam provisions of the False Claims Act.  The whistleblowers will receive a share of the settlement amount.  As part of the settlement, the U.S., the State of Wisconsin, and the whistleblowers asked the district court to dismiss the qui tam complaint. 

The U.S. Attorney's press release mentions that Walgreens has agreed to the terms of a corporate integrity agreement covering the conduct in all three cases.  The Office of Inspector General (OIG) negotiates corporate integrity agreements (CIA) with health care providers and other entities as part of the settlement of federal health care program investigations arising under a variety of civil false claims statutes.  Providers or entities agree to the obligations and, in exchange, OIG agrees not to seek their exclusion from participation in Medicare, Medicaid, or other Federal health care programs. 

If you are aware of fraud against the government, whether in healthcare or another sector, you may be eligible to blow the whistle in a False Claims Act lawsuit and may be entitled to a portion of the recovery. To find out more, contact Goldberg Kohn for a confidential consultation.

[1] United States of America, et. al. ex rel. Rahimi and Schulte v. Walgreens Boots Alliance Inc.,15-CV-5686 (S.D.N.Y.); and United States of America et al. ex rel. Marc D. Baker v. Walgreens Inc., 12-CV-0300 (S.D.N.Y.).

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