Blues plans accuse Walgreens of drug fraud

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Blues plans across the country on Tuesday accused Walgreen Co. of fraudulently inflating prescription drug prices by submitting false statements and omitting facts about its payment ceilings.

For more than a decade, Blues plans in Maryland, South Carolina and Louisiana claim Walgreens overcharged them by hundreds of millions, according to a complaint filed in the U.S. District Court for the Northern District of Illinois.

A spokesperson for Walgreens declined to comment on the litigation.

The Blues plans alleged state Medicaid programs, Medicare Part D regulations and the Walgreens Health Initative recognized the “usual and customary charge”—defined as the cash price paid by a non-insured customer—as a reimbursement ceiling, ensuring that the health plans wouldn’t pay more than customers without insurance.

However, the insurers allege that Walgreens began sidestepping this requirement in 2007 by creating its Prescription Savings Club to offer uninsured customers deep discounts. But the pharmacy chain would charge the Blues plans usual and customary charge prices that were “five, ten or even twenty times higher” than savings club prices.

That policy allegedly violated statewide acts for trade fraud, consumer fraud, consumer protection, unfair trade practices and deceptive business practices, according to the complaint. The Blues plans are seeking a full reimbursement of the alleged charges.

“Walgreens created the PSC program in a covert attempt to insulate its high (usual and customary charge) prices by artificially dividing its customer base in a way that would undermine the central purpose of any health insurance company’s prescription drug benefit—that plaintiffs do not pay more than what cash customers pay for the same drugs,” the complaint read.

Blues plans have previously sued Walgreens in 2020 for allegedly using its savings club to artificially inflate drug prices.

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