Whistleblowers play central role in pharmacy fraud recovery

Businesses love catchy slogans, and Walgreens had a memorable one for many years. The iconic national pharmacy chain — in business for well over a century – long reminded customers visiting company stores that they were “at the corner of happy and healthy.”

Some customer undoubtedly disagreed with that assessment in recent years, as they were forced to purchase diabetic insulin pens in quantities exceeding what they needed. Moreover, they were routinely shorted on promised lower prices owing to company officials’ purposeful failure to disclose their availability under a touted discount program.

Select employees within the organization duly noted those irregularities and filed fraud “qui tam” whistleblower lawsuits against Walgreens under the federal False Claims Act.

Their complaints bore fruit. U.S. Department of Justice officials announced recently that the retail chain will pay nearly $270 million in fines and penalties to the federal government and state agencies for defrauding the public.

That notably large amount is split between two settlements, with each addressing distinct fraud allegations.

The first outcome relates to the pharmacy’s requirement that consumers buy packages of multiple insulin pens, regardless of their needs. The company then allegedly submitted false reimbursement-tied data to Medicare, Medicaid and other government programs.

The second settlement targeted the above-cited discount program, which regulators say Walgreens intentionally failed to cite or apply, thus resulting in huge overbillings submitted to Medicaid.

The settlement also mandates Walgreen’s participation in a so-called “corporate integrity agreement” with the federal government.

News reports have not provided details concerning the whistleblowers’ recoveries.