Walgreens Must Pay $300 Million In Opioid Case, Additional $50 Million If Sold Or Merged Before 2032

Walgreens Boots Alliance Inc WBA on Monday said it will pay $300 million to resolve federal allegations that the company filled millions of invalid prescriptions for opioids and other controlled substances.

Earlier this year, the U.S. Department of Justice filed a civil complaint against Walgreens and its subsidiaries, alleging widespread violations of the Controlled Substances Act (CSA) and False Claims Act (FCA).

The settlement, announced by the Justice Department, Drug Enforcement Administration (DEA), and the Department of Health and Human Services Office of Inspector General (HHS-OIG), addresses violations of the Controlled Substances Act and False Claims Act.

An additional $50 million will be owed if Walgreens is sold or merged before fiscal year 2032.

Sycamore Partners agreed to acquire Walgreens for $11.45 per share in March.

Federal authorities alleged that from August 2012 to March 2023, Walgreens knowingly dispensed millions of controlled substance prescriptions that raised serious red flags.

These included excessive opioid quantities, early refills, and combinations known as the "trinity," a high-risk cocktail of drugs often linked to abuse. Despite clear signs these prescriptions lacked legitimate medical purposes, Walgreens pharmacists were allegedly pressured to prioritize speed over due diligence.

Also Read: Walgreens Boots Alliance Q2 Profit Falls 47.5%, Suspends Guidance On Pending Private Equity Deal

According to the complaint, Walgreens’ internal practices further contributed to the misconduct. Compliance officials reportedly failed to act on substantial evidence of unlawful dispensing. The company allegedly withheld critical information from pharmacists, including internal prescriber data, and blocked efforts to warn colleagues about potentially problematic prescribers.

The Justice Department accused Walgreens of creating an environment that discouraged pharmacists from taking necessary steps to ensure valid prescriptions.

Alongside the financial settlement, Walgreens has agreed to implement long-term compliance measures. For example, it will require pharmacists to verify the legitimacy of controlled substance prescriptions. It will also conduct annual training, and ensure staffing levels support legal compliance.

Walgreens must also block prescriptions from prescribers known to issue illegitimate prescriptions.

Separately, Walgreens entered into a five-year Corporate Integrity Agreement with HHS-OIG, which establishes a comprehensive compliance program. The process includes employee training, oversight by the company's board, and regular reporting to HHS-OIG regarding controlled substances.

Following the settlement, the U.S. government moved to dismiss its complaint. Walgreens will seek to dismiss a related declaratory judgment case filed in Texas.

In November, Walgreens agreed to pay $100 million to settle a proposed class action lawsuit over its Prescription Savings Club.

Price Action: Walgreens stock is down 0.46% at $10.84 at the last check Monday.

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