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WALGREEN CO. PAYS $7.6 MILLION TO SETTLE FALSE CLAIMS CASE

WASHINGTON, D.C. -- The Department of Justice announced today that Walgreen Co., an Illinois-based national retail pharmacy chain operating as Walgreens, has paid the United States and participating states $7.6 million to resolve allegations of falsely submitting prescription claims to state Medicaid programs, Tricare Management Activity, and the Federal Employee Health Benefits Program.

The case, which was filed in U.S. District Court in Tampa under the qui tam provisions of the False Claims Act, is the first False Claims Act settlement to address a practice common to many retail pharmacies of billing health insurance programs for the full amount of prescriptions when those prescriptions have been only partially filled. As a part of the resolution of the federal and state investigation of its billing practices, the Walgreen Co. has also agreed to make fundamental changes to its retail pharmacy operations, including agreeing to modify its computer system as a part of a Corporate Integrity Agreement with the United States Department of Health and Human Services Office of Inspector General.

Puerto Rico and the following 25 states are participating in the agreement: Arkansas, California, Colorado, Connecticut, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Hampshire, New York, Ohio, Oklahoma, Rhode Island, Tennessee, Texas, Washington, and Wisconsin. Louis Mueller, the whistle blower, will receive $678,584 as the relator's share of the federal portion of the settlement.

"We will continue to pursue pharmacies for billing for prescription drugs that are not provided to customers," said Acting Assistant Attorney General for the Civil Division David W. Ogden. "This is a practice common to other retail pharmacies, and this first case should serve as a warning that it won't be tolerated."

Donna A. Bucella, United States Attorney for the Middle District of Florida, said the case is a good example of the cooperation between law enforcement agencies that participate in these types of investigations. The matter was investigated by the United States Department of Justice, the U.S. Attorney's Office for the Middle District of Florida, the Florida Attorney General's Office, the National Association of Medicaid Fraud Control Units, the Defense Criminal Investigative Service, and the Office of the Inspector General for the Office of Personnel Management.

The case is filed in the Middle District of Florida as United States ex rel. Mueller v Walgreen, Civil No. 96-84-CIV-T-23E.

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