(INDIANAPOLIS) – Attorney General Curtis Hill announced that Indiana has joined the United States, the District of Columbia and other states in settling two qui tam (whistleblower) lawsuits against Walgreens Boots Alliance (Walgreens).
The agreements resolve allegations that Walgreens knowingly engaged in fraudulent over-dispensing of insulin pens to Medicare and Medicaid beneficiaries and billed Medicaid for certain prescription drugs at rates higher than its usual and customary rates. Walgreens, headquartered in Deerfield, Ill., and incorporated in Delaware, operates the largest retail pharmacy chain in the United States with 8,309 locations across all 50 states.
Attorney General Hill, through his office’s Medicaid Fraud Control Unit, participated in the investigations and negotiations leading to these settlements.
“It is troubling, to say the least, whenever companies overcharge the Medicaid program through fraudulent or otherwise improper tactics,” Attorney General Hill said. “Many Hoosiers find such conduct especially disconcerting when it comes from well-established companies they have come to know and trust. My staff and I are totally committed to holding businesses accountable whether they are large or small, known or unknown. Safeguarding the funds that are meant to provide health care to the neediest Hoosiers is one of our highest priorities.”
Insulin Pens Settlement
Under the Insulin Pens Settlement, Walgreens will pay the United States and the states $209.2 million. Of this amount, $89.1 million will go to the state Medicaid programs to resolve civil allegations that Walgreens’ unlawful over-dispensing of insulin pens caused false claims to be submitted to the Medicaid health care programs. As part of the settlement, Indiana Medicaid will receive $2.9 million in restitution and another recovery.
The investigation resulted from a qui tam action alleging that from Jan. 1, 2006, through Dec. 31, 2017, Walgreens knowingly over-dispensed insulin pens and overbilled government programs in violation of the federal False Claims Act and similar state statutes.
Pursuant to the settlement, Walgreens admitted to programming its computer system to define a full box of five insulin pens as the minimum dispensing package size. This definition prevented Walgreens pharmacists from being able to dispense fewer than five pens even though a patient’s prescription called for fewer pens than a box of five. Thus, Walgreens repeatedly reported information to state Medicaid programs different from and lower than, the correctly calculated supply according to standard pharmacy practice and as required by state pharmacy laws. This resulted in state Medicaid programs paying for a substantial number of claims that the programs would not have approved if Walgreens had reported the correct supply of medication based on the prescription. This conduct also opened the door to potential healthcare risks and abuse, such as the improper resale of insulin pens on the Internet.
A National Association of Medicaid Fraud Control Units (NAMFCU) Team conducted the investigation and participated in the settlement negotiations with Walgreens on behalf of the states. Attorney General Hill thanked three of his staff members – Deputy Attorney General Steve Hunt, Investigator Diane Hedges, and Data Analyst Gwen Taylor – for their efforts in leading the NAMFCU Team in its investigation and settlement of this matter.
Discount Drug Pricing Settlement
Under the Discount Drug Pricing Settlement, Walgreens will pay the United States and the states $60 million. Of this amount, $27.9 million will go to the state Medicaid programs to resolve civil allegations that Walgreens submitted claims to the state Medicaid programs in which the prices it identified as the usual and customary prices for certain prescription drugs that it sold through its Prescription Savings Club (“PSC”) program were higher than the prices it charged for those drugs under the PSC program. This practice allegedly enabled Walgreens to get more money in reimbursements from the state Medicaid programs than the amounts to which it was legally entitled. As part of the settlement, Indiana Medicaid will receive $953,742.96 in restitution and another recovery.
This investigation resulted from a qui tam action alleging that from Jan. 1, 2008, through Dec. 31, 2017, Walgreens knowingly failed to follow statutorily prescribed reimbursement guidelines and misrepresented the usual and customary prices for prescription drugs. As a result, Walgreens allegedly overbilled government programs in violation of the federal False Claims Act and similar state statutes.
A National Association of Medicaid Fraud Control Units (NAMFCU) Team including representatives from the Office of the Indiana Attorney General conducted the settlement negotiations with Walgreens on behalf of the states.