On January 16, 2025, the U.S. Department of Justice (DOJ) filed a lawsuit against Walgreens, alleging that the pharmacy chain knowingly filled millions of medically unnecessary prescriptions for controlled substances, contributing to the ongoing opioid crisis in the United States. This action highlights the increasing scrutiny of pharmacies and other healthcare stakeholders regarding compliance with federal laws related to the distribution of controlled substances.
Allegations of Improper Dispensing
The complaint alleges that Walgreens filled prescriptions for controlled substances, including opioids, that it knew, or should have known, were medically unnecessary and/or prescribed inappropriately. The Federal Controlled Substances Act (CSA) imposes a “corresponding responsibility” on pharmacists to verify whether prescriptions are issued for a legitimate medical purpose. Walgreens allegedly encouraged pharmacists to fill prescriptions quickly, disregarding the need to confirm the validity of each prescription, thereby causing CSA violations. Additionally, Walgreens also allegedly deprived its pharmacists of crucial information, including by preventing pharmacists from warning one another about certain prescribers. Walgreens is alleged to have further violated the CSA by failing to implement adequate controls to detect and prevent the filling of these suspicious prescriptions. By failing to act on these warning signs, the complaint alleges that Walgreens directly contributed to a public health crisis by enabling the widespread and inappropriate distribution of opioids.
Implicating the False Claims Act
Walgreens also allegedly violated the False Claims Act (FCA) by seeking reimbursement from federal healthcare programs for unlawful prescriptions for controlled substances. Despite knowing that these prescriptions were medically unnecessary, or acting with reckless disregard to this fact, Walgreens submitted claims to Medicare, Medicaid, and other government healthcare programs, resulting in alleged false claims. Violations of the FCA can lead to severe penalties, including civil penalties of up to $80,840 for each unlawful prescription and potential exclusion from participating in government programs.
The overall matter stems from four different whistleblower actions filed by former Walgreens workers in different parts of the country. Through these qui tam actions, filed pursuant to the FCA, the whistleblowers are each entitled to a share of the government’s recovery resulting from the false claims.
The Role of Red Flags in Pharmacy Compliance
A critical aspect of pharmacists’ “corresponding responsibility” is recognizing, investigating, and resolving signs that a controlled substance prescription is invalid––i.e., evaluating and adequately responding to the “red flags.” The DEA has emphasized the importance of recognizing and acting upon these red flags to prevent the diversion and abuse of controlled substances.
Red flags refer to warning signs that a prescription may not be legitimate, including:
- Prescriptions for large quantities of controlled substances: Prescriptions for unusually high doses or quantities, particularly for opioids or other addictive substances, can indicate misuse.
- Multiple prescriptions for similar drugs: Multiple prescriptions from different physicians for the same or similar drugs may suggest “doctor shopping” or other illicit behavior.
- Frequent early fills: Regular attempts to refill prescriptions early may indicate that patients are misusing the controlled substances.
- Geographical or demographic patterns: Prescriptions that appear to originate from known “pill mill” locations with high rates of drug diversion may trigger concern, as can patients who travel far distances to have their prescriptions filled.
The DEA’s Pharmacist’s Manual emphasizes that pharmacists are responsible for identifying these red flags and refusing to fill suspicious prescriptions. After evaluating potential red flags through an analysis of the totality of the circumstances, pharmacists must apply their professional judgment as they investigate any reasonable suspicions about the legitimacy of a prescription. As demonstrated by the Walgreens lawsuit, failing to conduct such due diligence prior to dispensing can result in significant consequences.
History of Red Flag Policies and Enforcement
The DEA’s focus on red flag policies has evolved over time, particularly in the context of the opioid crisis. While red flag guidelines have existed in certain forms for decades, enforcement has become increasingly rigorous in recent years. The action against Walgreens is part of a broader trend in which federal and state agencies are holding healthcare providers, especially pharmacies, accountable for failing to prevent the unlawful distribution of controlled substances.
The red flags that alert pharmacists to potentially problematic prescriptions for controlled substances constantly change. Pharmacists must, therefore, use their professional judgment to evaluate each prescription based on their clinical experience. Failure to recognize or act on these indicators may expose pharmacists and pharmacies to significant legal liability, including civil and criminal penalties.
How Frier Levitt Can Help
Pharmacies and other healthcare stakeholders must take proactive steps to reduce the risk of liability associated with dispensing in circumstances where red flags are identified. Competent healthcare counsel can play a key role in helping pharmacies:
- Develop Red Flag Policies: Legal counsel can assist pharmacies in creating or updating internal red flag policies to ensure compliance with DEA guidance and enforcement activity, and to establish clear procedures for identifying and handling suspicious prescriptions.
- Conduct Internal Audits: Regular internal audits can help pharmacies detect potential compliance issues before they lead to adverse action. These audits can identify gaps in red flag detection systems and ensure that proper due diligence is conducted. Counsel can assist your pharmacy in creating these audit systems.
- Train Pharmacy Staff: Legal counsel can help develop training and monitoring programs for pharmacy staff on red flag identification, DEA regulations, and the legal implications of filling suspicious prescriptions.
The DOJ’s lawsuit against Walgreens serves as a stark reminder of the importance of compliance with the CSA and the DEA’s red flag guidelines. As pharmacies face increased legal scrutiny, it is crucial for stakeholders to understand and implement effective policies to detect and prevent the diversion of controlled substances. Frier Levitt’s experienced attorneys can provide essential guidance in developing comprehensive compliance programs, conducting internal audits, and ensuring that pharmacy staff are properly trained to handle red flag situations. Contact us for assistance.
