Walgreens to pay more than $2.8M to settle allegations of overbilling Medicaid programs

Walgreen Co. has agreed to pay more than $2.8 million to resolve allegations it violated the federal, Massachusetts and Georgia False Claims Acts by submitting inflated prices for certain generic medications, according to the U.S. attorney’s office for District of Massachusetts.

The national pharmacy chain headquartered in Deerfield is accused of submitting inflated usual and customary prices to the Massachusetts and Georgia Medicaid programs for generic medications, according to a news release.

The Massachusetts Medicaid program (MassHealth) and Georgia Medicaid program jointly are funded and administered federal and state programs that cover medical costs, including of medication, for people with limited income.

The programs reimburse Walgreens’ pharmacies for dispensing generic medications to beneficiaries using the lowest of four reporting price points. One of the four price points is each pharmacy’s “usual and customary price,” which generally is the amount of money the pharmacy is willing to accept for a medication on that date of service, the release said.

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. By failing to report the correct usual and customary price, Walgreens’ pharmacies caused the MassHealth and Georgia Medicaid programs to pay more for these generic medications than they should have, the parties allege.

The settlement resolves, in part, claims brought by a whistleblower under the qui tam provisions of the federal, Massachusetts, and Georgia False Claims Acts. Under the laws, private parties may sue on behalf of the government and receive a share of a recovery, authorities said.

Earlier this month, Walgreens Boots Alliance agreed to be acquired by private equity firm Sycamore Partners after years of losing money.

Sycamore will pay $11.45 per share, giving the deal an equity value just under $10 billion. Shareholders eventually could receive up to another $3 per share under certain conditions, The Associated Press reported.

The company already has been making big changes as it seeks to turn around its business. Founded in 1901, Walgreens has been a public company since 1927. It is in the early stages of a plan to close 1,200 of its roughly 8,500 U.S. locations, AP reports.