Walgreens Pharmacy Settles False Claims Act Case for $7.9 Million

The Illinois-based Walgreens national pharmacy chain has paid $7.9 million to settle False Claims Act lawsuits alleging that the company offered illegal incentives to induce consumers to switch their prescriptions to Walgreens. The incentives included gift checks, gift cards and other similar items, none of which may be legally offered to beneficiaries of Medicare, Medicaid, TRICARE or other government health care programs.

According to the U.S. Department of Justice, the pharmacy’s alleged practices were first disclosed by two whistleblowers, Jack Chin, an independent pharmacist and Cassie Bass, a pharmacy technician who formerly worked for Walgreens. The two alleged that Walgreens had offered $25 gift cards to Medicare beneficiaries to encourage them to transfer their prescriptions to Walgreens from another pharmacy. Walgreens advertisements promoting the gift card offer usually noted that the gift was not available for beneficiaries of government programs. Still, Walgreens workers allegedly ignored the rules and frequently handed out the cards to Medicare and Medicaid customers in violation of federal law.

The whistleblowers who filed the two separate lawsuits brought their claims under the qui tam provisions of the federal False Claims Act, which allow private individuals to bring a claim on the government’s behalf when they become aware that the government is being defrauded. Under the statute, the whistleblowers are called “relators.”

Whistleblowers sometimes put their jobs at risk by reporting such fraud. To encourage individuals to take this brave step, the False Claims Act allows relators to share in a portion of the government’s recovery in a False Claims Act lawsuit. In this case, the two whistleblowers will split $1,277,172 from the United States to compensate them for reporting the fraud and taking action. The federal government’s share of the settlement is $7,298,124.

Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

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