Walgreens Signs $269M in Settlements Over Insulin Pen Scheme, Drug Discounts

Federal judges approved settlements in two separate False Claims Act cases brought against the pharmacy chain.

Walgreens Boots Alliance has agreed to pay more than $269 million to settle allegations it took advantage of Medicare and Medicaid, the U.S. Department of Justice said Tuesday.

The sum covers settlements in two separate cases filed under seal against the pharmacy chain by whistleblowers under the False Claims Act. Two federal judges signed off on the settlements earlier this month.

In the first case, Walgreens was accused of systematically dispensing more insulin pens than patients needed. For 12 years, from 2006 through 2017, the pharmacy chain's electronic management system prevented pharmacists from giving patients less than one full box of five pens, and whenever that five-pen transaction exceeded the federal government's reimbursable limit, Walgreens submitted reimbursement claims denying that the limit had been exceeded, the DOJ alleged. Walgreens agreed to pay more than $209 million to resolve those claims.

In the second case, Walgreens was accused of overcharging Medicaid. For a decade, from 2008 through 2017, the chain failed to disclose the discounted prices being offered on drugs through its Prescription Savings Club program, the DOJ alleged. Walgreens agreed to pay $60 million to resolve those claims.

"Walgreens engaged in practices that undermined the integrity of the Medicare and Medicaid programs, compromised patient care, and wasted taxpayer dollars," Scott J. Lampert, special agent in charge for the Health and Human Services Office of Inspector General, said in a DOJ statement.

Although the DOJ statement claims Walgreens "admitted and accepted responsibility for" conduct prosecutors had alleged in their complaints, Walgreens said it had "admitted no wrongdoing" and declined to elaborate, as Bloomberg's Chris Dolmetsch and Robert Langreth reported.

The settlements come as policymakers look for ways to tamp down drug costs and Walgreens faces competitive pressure from CVS Health's recent Aetna acquisition.