Walgreens Faces Another ‘Usual and Customary’ Fraud Suit

Several Blue Cross and Blue Shield affiliates sued Walgreens Boots Alliance Inc. on March 15, alleging that the retail pharmacy giant fraudulently overcharged them and their members for generic drugs over the course of “more than a decade.” The suit follows years of similar allegations from multiple payers, including federal health insurance programs. One legal expert tells AIS Health, a division of MMIT, that the current litigation has the potential to expose Walgreens to years of legal risk.

In the suit, three Blues affiliates — CareFirst, Blue Cross and Blue Shield of South Carolina and Blue Cross and Blue Shield of Louisiana — allege that Walgreens systematically and fraudulently charged the health plans inflated prices for generic prescription fills. The health plans claim that their contracts with Walgreens entitled them to reimburse the pharmacy for drug fills at the lowest price that Walgreens charged for the drug in question, an arrangement called “usual and customary” pricing. The plans allege that, despite those agreements, Walgreens allowed members of its prescription drug savings club to pay less than Blues plan members for the same drug — and intentionally withheld information from the plans to avoid changing the usual and customary price.