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Attorney General Marty Jackley

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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 the United States, the District of Columbia, and other States in settling allegations against Walgreens Boots Alliance (Walgreens).  The agreement in principle resolves allegations that Walgreens knowingly engaged in fraudulent over-dispensing of insulin pens to Medicare and Medicaid beneficiaries.

Walgreens will pay the United States and the States $209.2 million. Of this amount, $89,185,625.10 will go to the state Medicaid programs to resolve civil allegations that Walgreens’ unlawful over-dispensing of insulin pens caused false claims to be submitted to the Medicaid health care programs.  The total portion of the settlement amount recovered by South Dakota is $128,562.07, of which $77,029.93 will be retained by the federal government as the federal Medicaid share. The remaining $51,532.14 will go to the state general fund to offset alleged Medicaid damages in this case.

Pursuant to the settlement, Walgreens admitted to multiple factual statements including programming its computer system to define a full box of five insulin pens as the minimum dispensing package size.  This definition prevented Walgreens pharmacists from being able to dispense fewer than five pens even though a patient’s prescription called for less pens than a box of five.  Thus, Walgreens repeatedly reported information to state Medicaid programs different from, and lower than, the correctly calculated supply according to standard pharmacy practice, and as required by state pharmacy laws. This resulted in state Medicaid programs paying for a substantial number of claims that the programs would not have approved if Walgreens had reported the correct supply of medication based on the prescription. 
The settlement resolves allegations that from January 1, 2006 through December 31, 2017, rather than dispensing the quantity of insulin called for by a patient’s prescription, Walgreens exceeded the prescription amount and falsified information on claims submitted for reimbursement to Medicare and Medicaid, including the quantity of insulin and/or days’ supply dispensed.

Walgreens, headquartered in Deerfield, Illinois, and incorporated in Delaware, operates the largest retail pharmacy chain in the U.S., with 8,309 locations across all 50 states. 
This settlement arises from a whistleblower action originally filed in 2015 in the United States District Court for the Southern District of New York under the Federal False Claims Act and the named plaintiff states’ respective false claims statutes. A National Association of Medicaid Fraud Control Units (NAMFCU) Team conducted the investigation and participated in the settlement negotiations with Walgreens on behalf of the states and included representatives from the Offices of the Attorneys General for the states of Indiana, New York, Washington, California, Texas, Oklahoma and Massachusetts. 

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