Walgreens has agreed to a settlement of over $2.8 million to address allegations of submitting inflated prices for generic drugs to the Medicaid programs in Massachusetts and Georgia. The issue relates to violations of the False Claims Acts at both the federal and state levels.
Medicaid programs in Massachusetts and Georgia, known as MassHealth and Georgia Medicaid respectively, are collectively financed by federal and state funds and provide healthcare costs for individuals with limited income, including medication expenses. Pharmacies, including Walgreens, are reimbursed for dispensing generic drugs based on the lowest of four price points. One of these is the "usual and customary price," which represents what the pharmacy is willing to accept on a given day for medication.
Authorities from the United States, Massachusetts, and Georgia claim that between 2008 and 2023, Walgreens pharmacies reported inflated usual and customary prices to MassHealth and Georgia Medicaid for certain generic drugs. This alleged misconduct led the programs to pay more than necessary for these medications.
The settlement partially resolves claims brought forth by a whistleblower under the qui tam provisions of the False Claims Acts. This allows private individuals to sue on behalf of the government and potentially receive a portion of any recovered funds.
The settlement announcement was made by United States Attorney Leah B. Foley, Massachusetts Attorney General Andrea Joy Campbell, Georgia Attorney General Christopher M. Carr, and Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General. The legal proceedings are being handled by Assistant U.S. Attorney Steven Sharobem from the Affirmative Civil Enforcement Unit, as well as representatives from the Massachusetts, Georgia, and Illinois Attorney General’s offices.