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Walgreens pays $269.2 million to settle U.S. civil fraud lawsuits

By Jonathan Stempel
FILE PHOTO: The Walgreens logo is seen outside the store in Times Square in New York, U.S., July 5, 2016. REUTERS/Shannon Stapleton/File Photo

By Jonathan Stempel

NEW YORK (Reuters) - Walgreens Boots Alliance Inc will pay $269.2 million to settle two whistleblower lawsuits accusing it of civil fraud for overbilling federal healthcare programs over a decade, the U.S. Department of Justice said on Tuesday.

The pharmacy chain will pay $209.2 million to resolve claims it improperly billed Medicare, Medicaid and other federal programs from 2006 to 2017 for hundreds of thousands of insulin pens it dispensed to patients it knew did not need them.

Walgreens will also pay $60 million to resolve claims it overcharged Medicaid from 2008 to 2017 by failing to disclose and charge the discount drug prices it offered the public through its Prescription Savings Club program.

The Deerfield, Illinois-based company said it "admits, acknowledges, and accepts responsibility" for conduct alleged by the federal government, according to the settlement agreements.

In a separate statement, Walgreens said it "has admitted no wrongdoing," and that the settlements were in the best interests of customers, patients and other stakeholders.

It also said it set aside enough money for both settlements as of Nov. 30, 2018.

The company recently had more than 9,400 drugstores in the United States.

Walgreens' settlements resolve claims under the federal False Claims Act, which lets private whistleblowers sue on the federal government's behalf and share in recoveries.

The accords were respectively approved last week by U.S. District Judges Paul Crotty and Paul Oetken, who both sit in Manhattan.

About $200 million of the payout will go to the federal government, and the rest to state governments.

Walgreens also entered a corporate integrity agreement with the Office of the Inspector General of the U.S. Department of Health and Human Services to ensure future compliance with federal healthcare programs.

Two pharmacists filed the original complaint concerning the insulin pens in July 2015. A copy of that complaint could not immediately be obtained on Tuesday.

Marc Baker, who worked for Walgreens for a decade as a pharmacy manager in Florida, filed the original complaint concerning the drug price discounts in January 2012.

Both lawsuits had been filed under seal.

The cases are U.S. ex rel Rahimi v Walgreens Boots Alliance Inc, U.S. District Court, Southern District of New York, No. 15-05686; and U.S. ex rel Baker v Walgreens Inc in the same court, No. 12-00300.

(Reporting by Jonathan Stempel in New York; Editing by David Gregorio and Tom Brown)