BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $2.1 million settlement on Wednesday with the Rite Aid Corporation for alleged prescription drug overcharges.

Rite-Aid allegedly overcharged public entities for prescription drugs under the workers compensation insurance system and will pay the settlement, which is divided among approximately 100 cities and towns in the state. This is the fifth case of its kind and it marks a total of $7.9 million in recoveries to Massachusetts cities and towns.

Coakley's office alleges that Rite-Aid billed and received payments from towns, cities and state agencies for filling prescription drugs for workers compensation claimants at prices in excess of those permitted by state law. Under the terms of the settlement, Rite-Aid will pay $1 million to cities and towns that were allegedly overcharged by the company since 2002 and an additional $1.05 million to the state.

"This case is about fairness to cities and towns, especially during these tough economic times," Coakley said. "Our ongoing investigation has uncovered how numerous Massachusetts pharmacies have been overcharging local communities for prescription drugs. Since our review began last year, we have recovered almost $8 million for cities and towns and helped prevent overcharges in the future."

Under terms of the settlement, the city of Boston will receive approximately $41,000 in restitution, the Massachusetts cities of Holyoke, Easton, Lawrence, Pittsfield, Wrentham, Springfield, Chicopee, Fall River, Lowell and Taunton will all receive funds in excess of $10,000. On average, municipalities will receive around $4,500.

Earlier this month, Coakley announced a similar agreement with Walgreens for $2.8 million. Coakley has also reached similar settlements with Shaws Supermarkets, Stop & Shop and CVS.

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