Walgreen Accepts Responsibility for $50 Million Kickback Case

The United States Attorney for New York, Preet Bharara announced a settlement of $50 million against Walgreen Co. (“Walgreens”), the national retail drug chain which owns and operates thousands of retail stores across the United States.

The settlement resolves allegations that Walgreens violated the federal Anti-Kickback Statute and False Claims Act by providing government beneficiaries with discounts and other monetary incentives its Prescription Drug Savings Club program, in order to induce them to patronize Walgreens’ pharmacies for all of their prescription drug needs. The Complaint further alleges that Walgreens paid its employees bonuses for each customer they enrolled in the program, without verifying whether the customers were government beneficiaries.

Manhattan U.S. Attorney Preet Bharara commented:

Recognizing that it was a violation of the Anti-Kickback Statute to enroll government beneficiaries in its discount program, Walgreens nonetheless marketed the program to government beneficiaries and incentivized its employees to enroll customers in the program, regardless of whether they were government beneficiaries. As a result, Walgreens ended up unlawfully enrolling hundreds of thousands of government beneficiaries. .. Walgreens is being made to pay $50 million and has admitted to its conduct.

HHS-OIG Special Agent in Charge Scott J. Lampert said:

The sheer scope of this nationwide kickback scheme is shocking. Walgreens admits to having paid bonuses to employees for enrolling customers in its prescriptions savings program without verifying whether the customers were Medicare or Medicaid beneficiaries, despite stated company policy against enrolling such beneficiaries based on federal statutes…a message to other retailers that there will be consequences for such conduct.

In recent years, Walgreens has had to settle various claims brought by multiple whistleblowers for drug switching (allegedly switching to drugs that did not have a Medicaid price ceiling – $35 million), dual eligible fraud (allegedly overcharging those customers legitimately on Medicaid who also maintained their private health insurance coverage -$9.9 million), as well as discount cards (allegedly offering illegal inducements to Government health care programs beneficiaries to transfer prescriptions to Walgreens – $7.9 million).

Nolan Auerbach & White represents healthcare fraud whistleblowers in False Claims Act cases.  Whistleblowers are needed to protect the integrity of federal healthcare programs. More information for potential whistleblowers is located at our main website.