Walgreens to Pay $60 Million Settlement for Overcharging for Drugs

WASHINGTON, D.C. — Walgreens, the nation’s largest retail pharmacy, has agreed to pay $60 million to settle allegations that it knowingly overcharged government healthcare plans such as Medicaid for prescription drugs, based on an announcement by Stein Mitchell Beato & Missner LLP.

With this unprecedented settlement, Walgreens resolved allegations that the company defrauded the U.S. government and 39 states by submitting false and inflated prices for prescription drugs to increase its government reimbursements. The settlement is the largest of its kind against a retail pharmacy under the qui tam whistleblower provisions of the False Claims Act.

“This unprecedented case exemplifies the importance of whistleblowers in the public-private partnership to prevent government fraud,” said Andrew Beato, chair of Stein Mitchell Beato & Missner LLP’s Whistleblower Practice Group. “It illustrates the power of one individual to expose and stop fraud against the government — and, ultimately, U.S. taxpayers who foot the bill.”

Under federal and state laws, the amount charged by a pharmacy for a prescription drug cannot exceed the drug’s usual and customary price. Whistleblower Marc Baker alleged that Walgreens made false claims for payment of prescription drugs by submitting inflated usual and customary prices to government healthcare plans, including Medicaid, that fraudulently increased its reimbursements.  

Baker’s lawsuit, which was filed in 2012, disclosed that Walgreens offered discounted prices on prescription drugs to the general public through the Walgreens Prescription Savings Club (PSC), including government healthcare program beneficiaries, while charging significantly higher prices for the same drugs when paid by government programs.

Walgreens admitted as part of the settlement that the government “paid Walgreens more money in reimbursements than they would have paid if Walgreens had identified its PSC prices as its [usual and customary] prices.”

A successful case entitles the whistleblower to a percentage of the amount recovered. Baker will receive 21{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the amount recovered by the government.

“Never think that a single voice can’t make a difference in holding corporate goliaths responsible for illegal and unethical behavior,” said Jonathan Missner, managing partner of Stein Mitchell Beato & Missner LLP.