Walgreens settles fraud cases for $269M

Walgreens Boots Alliance has settled two fraud cases with the Department of Justice, shelling out $269.2 million. In both cases, which arose from whistleblowers, Walgreens admitted and accepted responsibility for conduct alleged by the government in its complaint under the False Claims Act.

The first settlement of $209.2 million resolves allegations that the company improperly billed Medicare, Medicaid and other federal healthcare programs for hundreds of thousands of insulin pens it dispensed to program beneficiaries who did not need them.

The company allegedly configured its pharmacy management system to prevent pharmacists from dispensing fewer than a box full of five insulin pens, even in cases when patients did not need that much of the medicine. Walgreens also evaded government limits on the daily supply of insulin by falsely stating the supplies did not go over the limit in its reimbursement claims.

“As a result, federal healthcare programs paid WALGREENS millions of dollars for insulin that many beneficiaries did not actually need, and substantial quantities of valuable medication were wasted,” the DOJ stated.

Walgreens will pay $168 million to the United States and $41.2 million to state governments.

“Walgreens engaged in practices that undermined the integrity of the Medicare and Medicaid programs, compromised patient care, and wasted taxpayer dollars,” HHS-OIG Special Agent in Charge Scott J. Lampert said in a statement. “Along with our law enforcement partners, HHS-OIG will continue to protect the individuals that depend on federally funded health care programs, and ensure that companies that do business with those programs do so in an honest fashion.”

Walgreens also agreed to pay $60 million to settled allegations it knowingly overcharged government healthcare plans for prescription drugs. The retail pharmacy allegedly offered discounted prices to the general public, including government healthcare program beneficiaries, but charged government programs significantly higher amounts.

The settlement is the largest of its kind against a retail pharmacy under the qui tam whistleblower provisions of the False Claims Act, according to Stein Mitchell Beato & Missner LLP, which represented the whistleblower in a lawsuit against Walgreens.

Walgreens will pay $32 million to the United States and $28 million to state governments.