Walgreens Settles Allegations of Submitting Inflated Prices to Medicaid Programs

Walgreens has agreed to pay $2.8 million to settle allegations that it submitted inflated prices to the Massachusetts and Georgia Medicaid programs for generic medications.

The settlement agreement resolves a whistleblower, or qui tam, lawsuit alleging that the national pharmacy chain violated the federal, Massachusetts and Georgia False Claims Acts by submitting those prices, the U.S. Justice Department said in a Thursday (March 27) press release.

“The United States, Massachusetts and Georgia allege that, between 2008 and 2023, Walgreens’ pharmacies submitted a higher usual and customary price to the MassHealth and Georgia Medicaid programs for certain generic medications at certain times,” the release said. “By failing to report the correct usual and customary price, Walgreens’ pharmacies allegedly caused the MassHealth and Georgia Medicaid programs to pay more for these generic medications than they should have.”

Reached by PYMNTS, Walgreen Co. declined to comment.

The Justice Department said in a January press release: “The False Claims Act imposes treble damages and penalties on those who knowingly and falsely claim money from the United States or knowingly fail to pay money owed to the United States.”

During the fiscal year ended Sept. 30, 2024, settlements and judgments under the False Claims Act exceeded $2.9 billion, the government and whistleblowers were party to 588 settlements and judgments, and whistleblowers filed 979 qui tam lawsuits, according to the release.

Matters involving the healthcare industry, including pharmacies, accounted for $1.67 billion of the $2.9 billion in False Claims Act settlements and judgments, per the release.

The number of qui tam lawsuits was the highest in a single year, and the number of settlements and judgments was the second highest, according to the release, the release said.

One of that year’s settlements involved another case against Walgreens and its parent company, Walgreens Boots Alliance.

In that case, the companies agreed to pay $106.8 million to resolve allegations that they billed government healthcare programs for prescriptions that the pharmacies never dispensed, according to a Sept. 13 press release from the Justice Department.

The government alleged that, between 2009 and 2020, Walgreens received tens of millions of dollars for prescriptions that it processed but that the beneficiaries never picked up.