Walgreens to pay $50 mln to resolve U.S. prescription kickback case

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By Nate Raymond and Brendan Pierson | NEW YORK

NEW YORK Jan 19 Walgreens Boots Alliance Inc will pay $50 million to resolve a U.S. lawsuit accusing
it of violating federal law by providing beneficiaries of
government healthcare programs discounts and other incentives to
fill their prescriptions at its pharmacies.

The settlement, announced by Manhattan U.S Attorney Preet
Bharara on Thursday, resolves a whistleblower lawsuit that the
government joined related to the national pharmacy chain’s
Prescription Savings Club program.

Bharara said Walgreens allowed beneficiaries of Medicare and
Medicaid to take part in the Savings Club program even though
doing so violated a federal law against paying those
beneficiaries kickbacks so they would choose Walgreens.

Walgreens’ written materials about the Savings Club program,
and its own internal policy, stated that beneficiaries of
government health insurance programs were not eligible to
participate, according to court filings related to the
settlement.

Nonetheless, the company offered employees bonuses for
enrolling people in the program without checking whether they
were eligible, Bharara said. As a result, he said, hundreds of
thousands of beneficiaries were enrolled in the program.

Walgreens acknowledged as part of its settlement that
government beneficiaries were improperly enrolled in its savings
program.

About $46 million of the settlement will resolve claims by
the federal government and the rest will go to states, which
help administer Medicaid.

The former Walgreens pharmacy manager who filed the
whistleblower lawsuit, Marc Baker, will get about $9.7 million
of the federal government’s portion of the settlement.

“We entered into this agreement to avoid the delay, expense,
and uncertainty of litigation, and did so without any admission
of legal liability,” Walgreens spokesman Jim Cohn said in an
email. He said the company still offers discounts to customers
who are not government beneficiaries through the Savings Club
program.



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