Walgreens, one of the largest pharmacy chains in the U.S., has agreed to pay $106 million to settle multiple lawsuits accusing the company of improperly billing government healthcare programs for prescriptions that were never dispensed. The settlement covers lawsuits filed in New Mexico, Texas, and Florida, with allegations that the company violated the False Claims Act by charging Medicare, Medicaid, and other federal programs for medications that customers never collected.
According to the U.S. Justice Department, the lawsuits were initiated under the False Claims Act’s whistleblower provision, which allows private parties to sue on behalf of the federal government. A whistleblower brought the allegations forward in 2015, although the improper billing practices are believed to have occurred as far back as 2009. According to the suit, Walgreens would process and bill prescriptions but, if the medications went uncollected by the prescribed customer, they were restocked and resold, all while the government had already been charged.
Despite these allegations, Walgreens reportedly cooperated with the investigation and worked with the authorities to resolve the matter. According to a statement by the company, the improper billing was a result of a software error in its pharmacy management system. Settlement documents state that Walgreens has implemented adjustments to its system to prevent similar issues from occurring again.
Under the terms of the agreement, $99 million of the settlement will go to the federal government, with the remaining $14 million distributed among the affected states. The company has already paid back more than $66 million, which will be credited toward the settlement total.
The False Claims Act, under which this case was brought, is one of the government’s most powerful tools in combating fraud against federal programs. It includes provisions that allow whistleblowers to share in any financial recovery made through successful litigation. This law incentivizes individuals with knowledge of corporate fraud to step forward and expose deceptive practices.
In this case, the lawsuits allege Walgreens' actions violated the False Claims Act by submitting false claims for reimbursement to government programs. For a False Claims Act violation to be proven, it must be shown that the defendant knowingly submitted or caused the submission of false claims for payment to the government.
However, Walgreens has denied any intentional wrongdoing.
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