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Walgreens Ordered to Pay $8M After Violating Federal Prescription Law

David W. Hodges
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Partner at Kennedy Hodges LLP practicing pharmacy error, medical malpractice and personal injury law
Posted on Jul 31, 2012

In a stunning example of Walgreens pharmacy malpractice, the U.S. Justice Department has announced that the pharmacy giant will have to pay the government $7.9 million to compensate for offering “kickbacks” to patients receiving federal health care. 

Investigators were alerted to the illegal practice after a lawsuit was filed by two whistle-blowers: Florida independent pharmacist Jack Chin, and Cassie Bass, a pharmacy technician at a Walgreens location in Detroit. 

The lawsuit alleged that the drugstore chain offered $25 gift cards to patients who transferred their prescriptions to Walgreens' pharmacies, including those whose prescriptions were covered undergovernment-run health programs such as Medicare, Medicaid and Tricare.

While Walgreens advertisements clarified that the money-back offer was only valid for those not covered under government programs, the government claimed that "Walgreens employees frequently ignored the stated exemptions on the face of the coupons and handed gift cards to customers who were beneficiaries of government health programs."

Walgreens settled the case out of court. As part of the settlement, the company will pay the federal government roughly $7.3 million, and participating states will also receive a portion of compensation. Bass and Chin will receive about $1.28 million from the United States for their participation in the case under parts of federal and state False Claims Acts statutes. 

Acting assistant attorney general Stuart F. Delery with the U.S. Justice Department believes the outcome of the case will deter pharmacies from similar actions, stating, "this case represents the government's strong commitment to pursuing improper practices in the retail pharmacy industry that have the effect of manipulating patient decisions."

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