Walgreens has agreed to pay $60 million to settle allegations that it overcharged government healthcare plans for prescription drugs.
The settlement, which is the largest against a retail pharmacy under the Qui Tam whistleblower provision of the False Claims Act (FCA), enables Walgreens to resolve allegations that it purposely defrauded the U.S. government and 39 states by submitting false and inflated prices for prescription drugs in order to boost its government reimbursements.
"This unprecedented case exemplifies the importance of whistleblowers in the public-private partnership to prevent government fraud," Andrew M. Beato, the chair of Stein Mitchell Beato & Missner LLP's Whistleblower Practice Group, said in a press release. "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. According to a lawsuit filed by whistleblower Marc D. Baker in 2012, Walgreens knowingly made false claims for payment of prescription drugs by submitting inflated prices to government healthcare plans, including Medicaid, so that the company could fraudulently increase its reimbursements.
As part of the settlement, Walgreens admitted 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."
In addition, Baker will receive 21 percent 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," added Jonathan Missner, managing partner of Stein Mitchell Beato & Missner LLP.
The agreement culminates a multi-prong investigation by the United States Attorney's Office for the Southern District of New York and numerous state attorneys' general offices. Last year, Walgreens also paid $50 million to the government related to unlawful kickbacks to get government beneficiaries to fill prescriptions at the retailer's pharmacies.