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WALGREENS CO. TO PAY $60 MILLION TO SETTLE MEDICAID FALSE CLAIMS ACT ALLEGATIONS

FOR IMMEDIATE RELEASE:    Thursday, January 24, 2019

CONTACT:  Tim Bormann (605) 773-3215

PIERRE, S.D. - Attorney General Jason R. Ravnsborg announced today that South Dakota has joined with other states and the federal government to reach an agreement in principle with Walgreen Co. (Walgreens) to settle allegations that Walgreens violated the False Claims Act by billing Medicaid at rates higher than its usual and customary (U&C) rates.

As a result, Walgreens will pay $60 million dollars, all of which is attributable to the States’ Medicaid programs. The federal government will retain $32,052,268.41, and the States will share $27,947,731.59 of the total settlement.  The total portion of the settlement amount recovered by South Dakota is $184,775.16, of which $109,949.08 will be retained by the federal government as the federal Medicaid share. The remaining $74,826.08 will go to the state general fund to offset alleged Medicaid damages in this case.

This nationwide federal and state civil settlement will resolve allegations relating to Walgreens’ discount drug program, known as the Prescription Savings Club (PSC).  The investigation revealed that Walgreens submitted claims to the States’ Medicaid programs in which it identified U&C prices for certain prescription drugs sold through the PSC program that were higher than what Walgreens actually charged for those drugs. In doing so, Walgreens’ obtained more money in reimbursements from the States’ Medicaid program for sales of such drugs than it was entitled to receive.  Walgreens is a Delaware corporation headquartered in Deerfield, Illinois.

The investigation resulted from a qui tam action originally filed in 2012 in the United States District Court for the Southern District of New York under the federal False Claims Act and various state false claims statutes.

A National Association of Medicaid Fraud Control Units (NAMFCU) Team conducted the settlement negotiations with Walgreens on behalf of the states. The Team included representatives from the Offices of the Attorneys General for the states of California, Illinois, Indiana, Michigan New York and Ohio.

The South Dakota Medicaid Fraud Control Unit and the South Dakota Department of Social Services assisted in recovering the settlement money.

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