Walgreen Co. Pays $7 Million To Settle Allegations Under The False Claims Act

KNOXVILLE, Tenn. – Walgreen Co. (Walgreens) has paid $7 million to the United States and the State of Tennessee to resolve allegations that it violated the False Claims Act by submitting claims to TennCare—the Medicaid program for the State of Tennessee—and knowingly retaining overpayments for specialty Hepatitis C medications dispensed to TennCare enrollees who did not meet TennCare’s clinical criteria for coverage and payment.

Walgreens operates retail pharmacies throughout Tennessee.  TennCare pays prescription drug benefits for a variety of covered prescription drugs, including drugs prescribed for enrollees with Hepatitis C.  Prior to 2019, TennCare required prior authorization based on clinical eligibility criteria related to disease severity and substance use before approving coverage for certain Hepatitis C direct-acting antiviral (DAA) medications.  The False Claims Act prohibits a pharmacy from knowingly submitting claims for payment for medications dispensed to patients who do not meet Medicaid coverage and payment requirements, and from knowingly retaining payments that were improperly made in violation of such requirements.

In a complaint filed with the United States District Court in May 2021, the United States and the State of Tennessee alleged that, from October 2014 through December 2016, a former pharmacist and store manager at Walgreens’ specialty pharmacy in Kingsport, Tennessee falsified prior authorization requests and supporting clinical records for 65 TennCare enrollees who failed to meet TennCare prior authorization requirements for the DAAs.  The complaint further alleged that Walgreens improperly billed TennCare for DAAs dispensed to the TennCare enrollees based on the falsified requests, and that Walgreens knowingly retained the resulting overpayments after the misconduct of its former store manager came to light.

As part of the settlement, the parties filed a joint stipulation of dismissal with the United States District Court, dismissing the complaint.

U.S. Attorney Francis M. Hamilton III of the Eastern District of Tennessee made the announcement. 

Assistant U.S. Attorneys Robert C. McConkey, III and Joseph C. Rodriguez represented the United States. Assistant Attorneys General David Rudolph and Tony Hullender represented the State of Tennessee.

Members of the public are reminded that the claims settled by this agreement are allegations only; there has been no determination of liability, and Walgreens does not admit liability for the allegations.

                                                                                         ###