Market Overview

Walgreens Pays $209 Million to Settle Whistleblower Lawsuit Alleging Pharmacy Giant Rigged Dispensing and Billing Software to Over-Dispense Insulin Pens


WASHINGTON, Jan. 22, 2019 /PRNewswire-PRWeb/ -- The law firm,Vogel, Slade & Goldstein, LLP, announced today that Walgreens Boots Alliance has agreed to pay $209.2 million to the United States and a number of states to resolve a lawsuit brought by two of the firm's whistleblower clients alleging that Walgreens knowingly bilked Medicare, Medicaid and other government health programs out of millions of dollars by billing for unprescribed, medically unnecessary insulin. The case is U.S. ex rel. Rahimi, et al. v. Walgreens Boots Alliance, No. 15-cv-5686 (SDNY). Walgreens has executed a written agreement to pay the federal government just over $168 million and has an agreement in principle with multiple states to pay them the remainder of the $209.2 million.

According to the whistleblowers' complaint Walgreens programmed its software to dispense insulin pens only in the manufacturers' 5-pen cartons regardless of the amount of insulin prescribed. According to the complaint, Walgreens then commonly dispensed more than a 30- or 90-day supply of insulin to customers while falsely reporting to payers that the supply was just a 30- or 90-day supply, and then refilled the prescriptions prematurely, upon expiration of the 30- or 90-day period.

As also alleged in the whistleblowers' complaint, while Insulin pen manufacturers generally sell the product in 5 pen cartons (containing 15 ml. or 1,500 units of insulin), they do not prohibit pharmacies from opening cartons. Unopened, refrigerated pens protect the insulin from degradation and contamination. Drug makers mark each pen with the information needed for sale, such as bar codes, product names, lot numbers and expiration dates. In April 2018, according to the whistleblowers' complaint, Walgreens reprogrammed its software to allow the dispensing of individual pens.

The whistleblowers, two pharmacists, filed their lawsuit in 2015 in federal court in Manhattan under the "qui tam" provisions of the federal False Claims Act and analogous state laws. The lawsuit was placed under seal to provide the government plaintiffs with an opportunity to investigate and decide whether to join the case. On Friday, January 11, 2019, the United States simultaneously intervened in the case, filed its own complaint and submitted a stipulation of settlement containing Walgreen's admissions to certain facts. The Court approved the settlement on Friday, January 18, 2019, and unsealed the case today. Under the False Claims Act and analogous state laws, the whistleblowers will be entitled to receive between 15 and 25% of the government's recovery.

Adam Rahimi, one of the whistleblowers, stated, "I am pleased with the outcome. I am grateful for the outstanding work of both the U.S. Attorney's Office in Manhattan, whose efforts were led by AUSAs Li Yu and Jessica Hu, and the state investigative team led by Indiana Supervising Deputy Attorney General Steven Hunt. The taxpayers should not have to pay for the waste generated by over-dispensing."

Whistleblower lawyer Shelley R. Slade, lead attorney for the whistleblowers, stated, "we believe that our clients' lawsuit stopped a fraudulent Walgreens' practice that not only generated tremendous waste on the backs of the taxpayers, but also may have fueled an unsafe and illegal secondary insulin market. Those buying insulin on the black market put their health at risk by using a dangerous drug without physician oversight and without assurances that the insulin was handled in a manner designed to protect its integrity." Please contact Ms. Slade at tel. no. 202-537-5903 or with any questions.


SOURCE Vogel, Slade and Goldstein, LLP

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