By the Constantine Cannon Whistleblower Team
Yesterday (April 21), the Department of Justice (DOJ) – together with the Drug Enforcement Administration and Health and Human Services Inspector General – announced that Walgreens will pay at least $300 million to settle DOJ charges of violating the False Claims Act and Controlled Substances Act through its filling of improper opioid prescriptions. It is just the latest in a string of healthcare-related companies to settle government charges of misconduct contributing to the opioid crisis.
Walgreens Allegedly Filled Millions of Invalid Prescriptions
According to the government, for years Walgreens pharmacies filled millions of unlawful prescriptions for opioids and other controlled substances despite “clear red flags,” the prescriptions lacked a legitimate medical purpose, or were issued outside the usual course of professional practice. The government further charged Walgreens with pressuring its pharmacists to fill prescriptions quickly, without confirming their legitimacy and lawfulness.
Walgreens compliance officials were also allegedly complicit in the scheme. The government claimed they intentionally ignored substantial evidence of the pervasive dispensing of unlawful prescriptions. Even worse, they apparently facilitated the practice by depriving their pharmacies with information that would have helped identify problem pharmacists and prescribers.
The False Claims Act covers fraud against the government, typically by those contracting to provide goods or services to the government or its various agencies and subdivisions. Overcharging or improperly billing Medicare is one of the most common areas of False Claims Act liability. By billing Medicare and other federal health care programs for invalid opioid prescriptions, Walgreens’s misconduct fell within the scope of the False Claims Act.
Opioid Fraud Remains a DOJ Enforcement Priority
This settlement is just the latest in a long series of False Claims Act settlements DOJ has secured, recovering billions of dollars from pharmacies, pharmaceutical companies, and other healthcare companies and providers for allegedly contributing to and exacerbating the opioid crisis. Going after opioid-related fraud and misconduct has been a top priority for the government over the past few years.
In DOJ’s False Claims Act Roundup for 2024, the government highlighted this area as a continued focus of DOJ’s fraud enforcement efforts, pointing to its major settlements last year with Endo Health Solutions and Rite Aid, among others, for their alleged efforts in facilitating invalid opioid prescriptions.
With this most recent settlement, the Trump administration is making a clear statement that going after opioid-related fraud remains a top priority. This strong sentiment was echoed by a chorus of DOJ and other agency officials in the government’s announcement of the Walgreens settlement, with Attorney General Pamela Bondi leading the way:
“Pharmacies have a legal responsibility to prescribe controlled substances in a safe and professional manner, not dispense dangerous drugs just for profit. This Department of Justice is committed to ending the opioid crisis and holding bad actors accountable for their failure to protect patients from addiction.” [Attorney General Bondi]
“This settlement resolves allegations that, for years, Walgreens failed to meet its obligations when dispensing dangerous opioids and other drugs. We will continue to hold accountable those entities and individuals whose actions contributed to the opioid crisis, whether through illegal prescribing, marketing, dispensing or distributing activities.” [Deputy Attorney General Michael Granston]
“With the power to dispense potentially harmful substances comes the responsibility to ensure that every prescription is legitimate before it is filled. When pharmacies fail that responsibility, this office will work with others across the country to hold accountable those who put patients and communities at risk.” [Maryland US Attorney Kelly Hayes]
“The settlement … underscores our office’s continued commitment to ensure that all persons and businesses that fill controlled-substance prescriptions adhere to the requirements of the Controlled Substances Act that are designed to prevent highly addictive medications from being used for illegitimate purposes.” [EDNY US Attorney John Durham]
“Strict compliance with the law is essential to safeguarding the public, who rely on carefully considered and limited prescriptions for their health and wellbeing. . . . As we continue to address the opioid crisis here in Virginia and across the nation, we are determined to ensure pharmacies and pharmacists operate within the law.” [EDVA US Attorney Erik Siebert]
“The DEA remains committed to protecting all Americans from unscrupulous practices that prioritize profit over patient safety.” [DEA Acting Administrator Derek Maltz]
The $300 million settlement would have been even higher but for Walgreens’s ability to pay a larger amount. In addition, the payout will be increased another $50 million if the company is sold or merged prior to 2032. On top of the payment, Walgreens also has entered into a Corporate Integrity Agreement and will adopt several compliance measures to strictly control how it fills opioid prescriptions going forward.
Whistleblowers Are Critical to Uncovering Opioid Fraud
Like most False Claims Act cases, the government’s action against Walgreens was initiated by whistleblowers under the qui tam provisions of the statute, which allows private parties to bring lawsuits on behalf of the government against those that commit fraud against the government. In exchange, successful whistleblowers are entitled to recover up to 30% of the government’s recovery.
Whistleblowers often provide a window into corporate misconduct that otherwise would remain undetected by government enforcers or the public. As Constantine Cannon whistleblower partner Gordon Schnell notes, “Whistleblowers are critical to the government’s fraud enforcement scheme because they have inside access and visibility into behavior that is often impossible for the government to otherwise uncover or understand.”
The whistleblowers here were all former Walgreens employees who, like most whistleblowers, had firsthand exposure to the alleged misconduct. They will receive a 17.25% share of the government’s False Claims Act recovery. Since 1986, whistleblowers have received close to $10 billion in awards under the False Claims Act.
Constantine Cannon has substantial experience representing whistleblowers under the statute, with numerous record-setting successes. If you would like to learn more about our work in this area, what it means to be a whistleblower under the False Claims Act, or think you have information relating to potential fraud, please don’t hesitate to contact us. We will connect you with an experienced member of the Constantine Cannon whistleblower team.
Read Walgreens is Latest to Pay Big to Settle DOJ Opioid Fraud Charges at constantinecannon.com
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