Walgreens Agrees To $106.8M Settlement Over Alleged False Billing Clai

Posted on September 23, 2024 

On Friday, Walgreens Boots Alliance Inc. (NASDAQ:WBA) agreed to pay $106.8 million to settle allegations that it submitted false claims to government healthcare programs, violating the False Claims Act and state regulations.

The settlement resolves accusations that the pharmacy chain billed Medicare, Medicaid, and other federal health programs for processed prescriptions but never actually dispensed to beneficiaries.

The alleged fraudulent activity spanned from 2009 to 2020.

The Department of Justice alleges Walgreens collected tens of millions of dollars from the federal government for medications that never reached patients.

As part of the resolution, Walgreens has implemented updates to its electronic pharmacy management system to prevent similar issues from occurring.

Notably, the company received credit for proactively addressing the issue, including self-reporting certain instances and refunding $66.3 million before the settlement.

The settlement also involves significant contributions to individual states, with $14.9 million allocated to Medicaid-participating states. The federal government’s share of the recovery amounts to $91.9 million.

The settlement covers three cases filed under the qui tam provision of the False Claims Act, allowing private parties to sue on behalf of the government.

Two former Walgreens employees, Steven Turck and Andrew Bustos, were instrumental in these lawsuits. Turck, a former pharmacy manager, will receive $14.9 million, while Bustos, a former district pharmacy supervisor, will be awarded $1.6 million.

In a report, retail pharmacies such as Walgreens Boots Alliance and CVS Health Inc (NYSE:CVS) are becoming less convenient for consumers, as reflected in numerous customer complaints.

Despite their extensive network of locations, frustrations are mounting due to long wait times for assistance and prescription pickups, highlighting the broader issues facing retail pharmacy chains. 

Price Action: WBA stock is down 2.5% at $8.98 at last check Monday. 

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