Walgreens Boots Alliance Inc. (Walgreens), the nation’s largest retail pharmacy, has agreed to pay just over $269 million to the United States and multiple state governments in order to settle allegations contained in two separate whistleblower actions. The first settlement, involving the sale of insulin pens, accounts for $209.2 million of the combined settlements and marks the largest ever settlement payout for a retail pharmacy under the qui tam provisions of the False Claims Act (FCA). The second settlement comes in at $60 million and arises from fraudulent acts related to Walgreen’s Prescription Savings Club.

In the insulin pens settlement, Walgreens is alleged to have configured its electronic pharmacy management system to prevent pharmacists from dispensing less than a full box of insulin pens (five pens each), even in instances where the dispensing of a full box exceeded the days-of-supply limit that could be dispensed and reimbursed under federal health care programs. In instances where a federal health care program denied a claim for a full box, it became Walgreens’ practice to report days-of-supply to conform to the limit but still dispense and bill for the full box. In this manner, federal health care programs reimbursed Walgreens millions of dollars for insulin pens that were not needed and potentially wasted or resold. 

In the second case, Walgreens offered many of its customers the option to participate in a Prescription Savings Club (PSC) through which they would receive discounts on drugs ordered through the pharmacy. Under Medicaid regulations, Walgreens could seek reimbursement only at the lowest of certain drug price points, including the “usual and customary price” that many state Medicaid programs define as the price offered through discount programs like Walgreens’ PSC. Walgreens, however, did not submit claims using the PSC rate, but instead submitted claims at the higher non-PSC price point. The practice resulted in multiple States overpaying Walgreens for Medicaid reimbursements. 

In addition to the hefty fines, Walgreens has entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services Office of the Inspector General. Via the CIA, Walgreens is subject to broad oversight of its retail and specialty pharmacy practice and its billing practices with federal health care programs, including multi-site claims reviews.