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Catch of the Week – Walgreens Pays Record $273 Million To Settle Three FCA Suits

Posted  January 25, 2019

Three separate qui tam actions brought by whistleblowers against Walgreens Boots Alliance, Inc. (Walgreens) have resolved in what amounts to the largest settlement payouts for a retail pharmacy.

In the first action, two former Walgreens pharmacists alleged that the company sought reimbursement for insulin pens it dispensed to Medicare and Medicaid beneficiaries who did not need them. Walgreens did so in two ways. It programmed its pharmacy management software to prevent pharmacists from dispensing less than a full box of five insulin pens, even when patients did not need that much insulin. And it enacted a practice of billing federal health programs for full boxes of insulin even when the government first denied their claims as exceeding the limit of total daily doses that could be dispensed under the program. The company simply stated in its reimbursement claims that the total daily supply did not go over the limit while still billing for the extra doses.

These two practices resulted in massive overcharging to federal healthcare programs. In addition, according to the Department of Justice, “[t]his conduct … opened the door to potential health care risks and abuse, such as the improper resale of insulin pens” on the black market.

Walgreens agreed to pay $209 million ($168 million to the United States and $41.2 million to state governments) to settle these allegations, which is the highest False Claims Act settlement involving a traditional retail pharmacy business to date. The co-whistleblowers in this case will receive 19% of the share that will go to state governments and are still finalizing an agreement on their share of the federal payout.

In the second action, the whistleblower alleged that Walgreens offered discounted prices on prescription drugs to the public through the Walgreens Prescription Savings Club (PSC), while billing Medicaid for the higher prices for these drugs. Under Medicaid regulations, Walgreens could have sought reimbursement only at the lowest of certain drug price points, including the price offered through discount programs.

Walgreens will pay $60 million, of which approximately $32 million is to the United States and approximately $28 million will go to state governments. This was the culmination of a six-year investigation by various state governments into Walgreens’ billing practices, resulting in a partial settlement last year. Walgreens paid $50 million to settle violations of the Anti-Kickback Statute.

According to the settlement agreements for both actions, the company “admits, acknowledges, and accepts responsibility” for its conduct.

Finally, in the third action, Walgreens has agreed to pay $3.5 million to settle allegations that from 2011 to 2014, it violated Wisconsin’s Medicaid rules by dispensing stimulant medication to beneficiaries without verification.

Because of these settlements, the company has entered into a corporate integrity agreement with the Office of Inspector General for the U.S. Department of Health and Human Services.

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Tagged in: Catch of the Week, Drug and DME Pricing, FCA Federal, Pharma Fraud, Whistleblower Rewards,