Walgreens will pay the federal and state governments $7.9 million in a settlement arising out of allegations the drugstore chain illegally paid kickbacks so that prescriptions would be transferred to its pharmacies. Investigators had been looking into whether Walgreens had given people enrolled in government-run health programs — such as Medicare, Medicaid and Tricare (for military families) — $25 gift cards if they moved their prescriptions over to Walgreens’ pharmacies. These inducements violate federal law.

The drugstore chain’s advertisements typically noted that such offers didn’t apply to those insured via Medicaid, Medicare and similar programs. But the government claimed “Walgreens employees frequently ignored the stated exemptions on the face of the coupons and handed gift cards to customers who were beneficiaries of government health programs.” The government learned of the allegations in lawsuits filed by two whistle-blowers: Cassie Bass, a pharmacy technician who worked at Walgreens in Detroit, and Jack Chin, an independent pharmacist in Florida.

Federal prosecutors from California and Michigan, the U.S. Justice Department’s commercial litigation branch, the National Association of Medicaid Fraud Control Units and the U.S. Health and Human Service Department’s inspector general participated in the joint investigation. Bass and Chin will receive about $1.28 million from the United States for their actions under parts of federal and state False Claims Acts statutes. The federal government will receive just under $7.3 million from Walgreens as part of the settlement, with participating states also receiving some payment from the drugstore chain.

Source: CNN