On March 20, 2018, Attorney General Maura Healey announced Walgreens, the Retail Pharmacy USA division of Walgreens Boots Alliance, Inc., had agreed to pay $5.5 million for allegedly overcharging for prescription drugs subject to cost controls under the state workers’ compensation insurance system.
Walgreens runs one-hundred and sixty-one retail pharmacies in Massachusetts,
Attorney General investigates Walgreens’ long-standing overcharge practices
“Our office found that over many years, Walgreens overcharged workers for various legitimate prescriptions,” Attorney General Healey said in announcing the settlement.
As a result of its investigation, the Office of the Attorney General alleged Walgreens committed unfair and deceptive acts and practices prohibited under M.G.L. c. 93A, by billing and obtaining payment for prescription drugs for more than the amounts permitted by Massachusetts law and regulations controlling workers’ compensation benefit payments.
$4.6 million to Attorney General for public purposes but no admission of liability
The assurance of discontinuance entered into between the Attorney General and Walgreens and filed in Suffolk Superior Court required Walgreens to pay to the Attorney General with ten days of the filing two checks: The first for $4,675,143.00 and the second for $850,00.00.
The $4.6 million payment under the terms of the agreement shall be used by the Attorney General in her sole discretion for “education, consumer outreach, amelioration of consumer harm, and/or support for public interest programs regarding work-place injury prevention, rehabilitation, and prescription choices and management.”
The added $850,000.00 payment will pay the Attorney General’s Office for the costs of the investigation and for monitoring Walgreens compliance with the assurance of discontinuance going forward.
Although Walgreens agreed to the payments due under the assurance of discontinuance, it did agree its actions violated any law or regulation. The also signed the agreement with the inclusions of express statements that: “Neither the terms of this Assurance nor the payment of any money hereunder is, nor shall either be construed to be, an admission of any wrongdoing, nor an admission to the allegations [of the Attorney General].”
The final sentence of the paragraph states: “Walgreens expressly denies any liability or wrongdoing related to this matter.”
Sixty-five percent of workers’ compensation pain medications prescribed for opioids
In another statement regarding the assurance of discontinuance, Attorney General Healey said, “This settlement ensures that Walgreens does not profit from those transactions and will help our state’s ongoing efforts to combat the opioid epidemic.”
According to a Workers’ Compensation Insurance Research Institute study cited by the Attorney General, eighty-nine percent of the prescriptions paid for under the workers’ compensation system in Massachusetts are for pain medications. Seventy-three percent of those pain prescriptions are for opioids which translates to sixty-five percent of all prescription drugs dispensed for workers’ compensation injuries being opioids.
Attorney General Healey reached a previous settlement with Walgreens in 2017, requiring it to strengthen its policies and procedures relating to its opioid dispensing practices. This settlement required Walgreen’s. That settlements also provided funding for the Attorney General’s grant program designed to support school-based prevention education initiatives to address opioid dependence and addiction in Massachusetts.
Attorney General’s Office will monitor Walgreen’s ongoing compliance with the agreement
The assurance of discontinuance filed with the court also requires Walgreens to implement procedures that will prevent future overcharges on opioids and other drugs purchased for claimants under the workers’ compensation system.
To ensure Walgreens future billings and payments follow all relevant Massachusetts laws and regulations, the assurance of discontinuance requires Walgreens to execute a “Compliance Protocol Pricing” letter agreement within 60 days of the filing of the assurance of discontinuance. Once the Attorney General agrees to Walgreens’ pricing compliance agreement, Walgreens must “fully cooperate with the Attorney General in implementing [the assurance of discontinuance].” Walgreens’ cooperation also includes its supplying data and documents sufficient to permit the Attorney General’s Office, or any third-party auditor retained by the Attorney General’s Office to verify Walgreens’ implementation of the Compliance Protocol Pricing.”
Walgreens can only make changes to its Compliance Protocol Pricing as necessary to remain in compliance with applicable Massachusetts law and regulations concerning pricing for prescription drugs covered by workers’ compensation insurance. And, in that case, only after the acceptance of those changes by the Attorney General’s Office, or its third-party auditor.
Walgreens only latest company returning overcharges on workers’ compensation prescription drugs
Since, at least, 2010, the Attorney General has had an ongoing investigation into workers’ compensation prescription overcharging by pharmacies and other entities with Massachusetts pharmacy licenses, such as supermarkets and general retailers.
CVS and Rite-Aid settled with the Attorney General in 2010 and 2011 for $2.65 million and $2.1 million respectively, for workers’ compensation prescription overcharges to public employers such as cities and towns. In total, Combining the major pharmacy chain cases and the settlements with lower-volume alternative retailers, the Attorney recovered over $8 million without regard to Walgreens’ assurance of discontinuance and $5.6 million in payments.
Representatives of the Attorney General’s Office handling the Walgreens settlement
Peter Leight, Burt Feinberg, and Glenn Kaplan, all of Attorney General Healey’s Insurance and Financial Services Division handled the Walgreen investigation and the negotiations of the assurance of discontinuance.