Healthcare plans accuse Walgreens of drug fraud

Healthcare plans across the country are accusing Walgreen Co. of fraudulently inflating prescription drug prices by submitting false statements and omitting facts about its payment ceilings.

For more than a decade, the alleged scheme has overcharged healthcare plans, including multiple Blue Cross and Blue Shield (BCBS) networks, hundreds of millions of dollars, plaintiffs said Tuesday in a complaint filed in the U.S. District Court for the Northern District of Illinois.

A spokesperson for Walgreens declined to comment on the litigation.

According to the complaint, Walgreens was required to charge customers insured by the plaintiffs the “usual and customary charge”—defined as the cash price paid by a non-insured customer—as a reimbursement ceiling, ensuring that the healthcare plans didn’t pay more than customers without insurance.

However, plaintiffs allege that Walgreens began sidestepping this requirement in 2007 by creating its Prescription Savings Club to offer uninsured customers deep discounts and to charge plaintiffs usual and customary charge prices that were “five, ten or even twenty times higher” than actual PSC prices.

By doing so, the plaintiffs allege that Walgreens violated statewide acts for trade fraud, consumer fraud, consumer protection, unfair trade practices and deceptive business practices. The plaintiffs are seeking a full reimbursement of the alleged charges and an injunction to bar Walgreens from engaging in the alleged fraud, according to the complaint.

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“Walgreens created the PSC Program in a covert attempt to insulate its high (usual and customary charge) prices by artificially dividing its customer base in a way that would undermine the central purpose of any health insurance company’s prescription drug benefit—that plaintiffs do not pay more than what cash customers pay for the same drugs,” the complaint read.

This is not the first time the pharmacy company has been accused of prescription drug fraud. In a similar case from March 2020, a group of BCBS plans also sued Walgreens for allegedly using its savings club to artificially inflate prices and undermine the usual and customary charge, resulting in hundreds of millions of dollars in overcharges.