Walgreens Settles Fraud Billing Allegations with DOJ

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Walgreens has agreed to pay around $107 million to settle allegations of fraudulent billing for prescriptions that were never actually dispensed, as announced by the Department of Justice (DOJ) on Friday. Between 2009 and 2020, the company submitted claims to Medicare, Medicaid, and other federal programs for prescriptions that were processed but not picked up by patients, leading to improper payments totaling “tens of millions of dollars,” according to the DOJ.

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Walgreens, which has already refunded the overpayments, attributed the issue to a malfunction in its electronic system. The settlement does not require Walgreens to admit liability.

The settlement addresses three cases in New Mexico, Texas, and Florida filed by whistleblowers alleging violations of the False Claims Act. The DOJ noted Walgreens' cooperation and its efforts to upgrade its pharmacy management system to prevent future issues.

For Walgreens, headquartered in Deerfield, Illinois, the $106.8 million settlement is relatively small compared to its $139 billion revenue for fiscal year 2023. However, it adds to the company’s financial challenges, including a $3.1 billion net loss last year related to opioid crisis settlements. The company also faces ongoing difficulties with reimbursement, declining front-store sales, and an unprofitable primary care chain.

With 8,700 U.S. stores as of last summer, Walgreens is closing underperforming locations and divesting assets, including shares in Cencora and potentially its stake in VillageMD. Its stock has fallen more than 66% year-to-date.