Walgreens pays $100 million to settle class action drug case

Walgreens is paying $100 million to settle a seven-year-old class action lawsuit alleging the company inflated drug prices.

Walgreens denies wrongdoing.

The class action suit, Russo v. Walgreens Co., dragged out over seven years in “hard-fought litigation,” according to court documents.

WHY THIS MATTERS

Walgreens did not consider the prices it charged under its Prescription Savings Club in determining the usual and customary price, resulting in insured consumers and third-party payers paying more for their prescription drugs, according to the settlement filed November 1 in federal court for the Northern District of Illinois, Eastern Division. 

Walgreens said it acted appropriately in reporting its retail prices.

Walgreens was accused of requiring insured customers to pay more than members of its Prescription Savings Club, who for a low annual fee could buy more than 500 widely prescribed generic drugs for $5, $10 and $15 for 30-day prescriptions, and $10, $20 and $30 for 90-day prescriptions without using insurance, according to Reuters. Insured customers reasonably believed they would not pay more than customers who paid out of pocket, but they did end up paying more in the form of copays and deductibles.

The lawsuit alleged that the prices Walgreens reported to insurers for reimbursement were inflated. 

One condition of the settlement was that Walgreens end the savings club, which it did in August, according to Reuters.

THE LARGER TREND

In September, Walgreens agreed to pay $106.8 million to resolve allegations that it billed the government for prescription drugs never dispensed, according to the Department of Justice.

The government alleges that, between 2009 and 2020, Walgreens submitted false claims for payment to Medicare, Medicaid and other federal healthcare programs for prescriptions that it processed, but were never picked up by beneficiaries. As a result, Walgreens received tens of millions of dollars for prescriptions that it never actually provided, the DOJ said.

Email the writer: SMorse@himss.org