Amid CT Closings This Week, Walgreens Facing Hefty Federal Settlement

CONNECTICUT — During a week in which three Walgrerens stores closed in Connecticut, the pharmacy giant has paid up on a nine-figure settlement with federal officials amid a Small Claims Act violation accusation.

The Justice Department this week, together with the Drug Enforcement Administration and Department of Health and Human Services Office of Inspector General announced a $300 million settlement with parent company Walgreens Boots Alliance, along with Walgreen Co. and various subsidiaries (collectively meaning Walgreens) to resolve allegations that the national chain pharmacy illegally filled millions of invalid prescriptions for opioids and other controlled substances in violation of the Controlled Substances Act and then sought payment for many of those invalid prescriptions by Medicare and other federal healthcare programs in violation of the False Claims Act.

The settlement amount is based on Walgreens’s ability to pay, according to the Justice Department.

Walgreens will owe the United States an additional $50 million if the company is sold, merged, or transferred prior to fiscal year 2032.

The government’s complaint, filed on Jan. 16 and amended April 18 in the U.S. District Court for the Northern District of Illinois, charges that, from approximately August 2012 through March 1, 2023, Walgreens, one of the nation’s largest pharmacy chains, knowingly filled millions of unlawful controlled substance prescriptions.

The prescriptions included excessive quantities of opioids, opioid prescriptions filled significantly early, and prescriptions for the especially dangerous and abused combination of three drugs known as a "trinity, according to the Justice Department.

Walgreens pharmacists are accused of filling the prescriptions despite clear "red flags" indicating a high likelihood that the prescriptions were invalid because they lacked a legitimate medical purpose or were not issued in the usual course of professional practice, according to the Justice Department..

The complaint further charges that Walgreens pressured its pharmacists to fill prescriptions quickly and without taking the time needed to confirm that each prescription was lawful.

Walgreens’s compliance officials are accused of ignoring "substantial evidence" that its stores were dispensing unlawful prescriptions and even intentionally depriving its own pharmacists of crucial information, including a refusal to share internal data regarding prescribers with pharmacists and preventing pharmacists from warning one another about certain problematic prescribers, according to the Justice Department..

In light of the settlement, the United States has moved to dismiss its complaint, according to the Justice Department.

Walgreens will also move to dismiss a related declaratory judgment action filed in U.S. District Court for the Eastern District of Texas, according to the Justice Department.

In addition to the monetary payments announced today, Walgreens has entered into agreements with DEA and HHS-OIG to address its future obligations in dispensing controlled substances, according to the Justice Department.

This week, Walgreens stores closed in Middletown at 311 East Main St. (Wednesday), in Waterbury at 11 Meriden Road (Tuesday) and in Milford at 1083 Boston Post Road (Monday).

The next stores be shuttered are:

• The Walgreens in East Hartford at 922 Silver Lane is slated to close on May 20. Customers will have an option of using the Walgreens at 20 Connecticut Boulevard.
• The Walgreens at 1350 Stanley Street in New Britain is scheduled to close on May 19. A store at 102 Washington St. will remain.
• In East Haven, the store at 157 Main Street is slated for a May 22 closure. The closest store would be in Branford, a store staffer said.

The rash of closings come in the wake of Illinois-based Walgreens Boots Alliance third-quarter earnings report. In that report, Walgreens executives said the company is "launching a U.S. retail pharmacy action plan to invest in and deliver an improved customer and patient experience across channels" while "simplifying and focusing the U.S. Healthcare portfolio."

The company also lowered its fiscal 2024 adjusted earnings per share guidance to $2.80 to $2.95 to reflect "challenging pharmacy industry trends and a worse-than-expected U.S. consumer environment."

Click here to see Walgreens' Connecticut lineup.