Walgreens Boots Alliance Inc. (WBA) has agreed to pay a hefty $106.8 million to settle allegations of submitting false claims to government healthcare programs. The settlement resolves accusations that the pharmacy chain billed Medicare, Medicaid, and other federal health programs for prescriptions that were processed but never actually dispensed to patients. This alleged fraudulent activity, spanning from 2009 to 2020, resulted in Walgreens collecting tens of millions of dollars for medications that never reached beneficiaries.
The Department of Justice alleges that Walgreens intentionally billed for these prescriptions, despite knowing they were not dispensed. This practice, according to the DOJ, constituted a violation of the False Claims Act and state regulations.
In an effort to prevent similar issues from arising in the future, Walgreens has implemented updates to its electronic pharmacy management system. Notably, the company received credit for proactively addressing the issue by self-reporting certain instances and refunding $66.3 million before the settlement was reached.
This 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, played a crucial role 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.
It’s worth noting that this settlement comes at a time when retail pharmacies like Walgreens and CVS are facing growing customer frustrations due to long wait times for assistance and prescription pickups. Despite their extensive network of locations, consumers are voicing concerns about the inconvenience these chains are presenting. This underscores the broader challenges facing the retail pharmacy industry.
Following the news of the settlement, WBA stock closed down 2.5% at $8.98 on Monday. This settlement highlights the importance of transparency and accountability within the healthcare industry, particularly when dealing with government healthcare programs. It also serves as a reminder for companies to prioritize ethical practices and prevent fraudulent activities from occurring.
