Law Street Media

Walgreens Sued Over Alleged Inflation of U&C Prices

pharmacy medicine capsule pill in production line at medical factory

Six affiliated health insurance companies filed suit on Tuesday in the Northern District of Illinois against Walgreen Co. and Walgreens Boots Alliance, Inc. The defendants allegedly engaged in a scheme to “overcharge Plaintiffs for prescription drugs by submitting claims for payment at artificially inflated prices.” The complaint about the defendants’ inflated usual and customary prices (U&C) seeks damages for fraud, fraudulent nondisclosure, unjust enrichment, and state statutory claims.

This suit pertains to previously settled litigation between the defendants and the United States where the defendants were accused of violating the False Claims Act due to their submission of inflated U&C prices. In the settlement, Walgreens admitted to the incorrect U&C prices, the complaint said.

The complaint explains that the defendants made false statements and omitted material information regarding the usual and customary prices of the prescription drugs they were billing the plaintiffs for. The payment ceiling for U&C prices is defined as the cash amount a non-insured person would pay for the drug. The defendants submitted millions of claims to the plaintiff that included the inflated U&C prices, meaning that the plaintiffs were ultimately overcharged by “hundreds of millions of dollars for prescription drugs.”

The seven plaintiffs are “health care plans offering comprehensive health care services and coverage, including prescription drug coverage, to their members.” When the plaintiff’s members fill a prescription with the defendants, they bill the plaintiffs for reimbursement. The bills that Walgreens send the plaintiffs are “required to truthfully and accurately submit its U&C price for each dispensing event, in accordance with… the National Council for Prescription Drug Program requirements.”

The plaintiffs assert that Walgreens created a program known as the PSC program, where they offered discounts on prescription drugs but did not mark these as the U&C prices to third-party payors like the plaintiffs, giving them inflated U&C prices instead. The complaint argues that the program was a “covert attempt to insulate [Walgreens] high U&C 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 cites claims for fraud, fraudulent nondisclosure, unjust enrichment, and violations of numerous state acts. The plaintiffs are seeking damages for at least the amount that they were overcharged due to the inflated U&C prices, a permanent injunction preventing Walgreens from engaging in future misconduct, compensatory, consequential, statutory, treble, punitive, exemplary and general damages, disgorgement, restitution, litigation fees, and more.The plaintiffs are represented in the litigation by L&G Law Group LLP.

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