N.Y. BlueCross BlueShield Sues Walgreens for “Systematic Prescription Overcharging”

A group of New York BlueCross BlueShield health plans have filed suit against Walgreens, the largest community pharmacy chain, in U.S. District Court for the Northern District of Illinois alleging Walgreens inflated usual and customary (U&C) charges and obfuscated cash pricing information for most of the drugs eligible for its discount program. The lawsuit follows a $269 million settlement on January 19, 2019 for claims brought by the U. S., 39 states, and the District of Columbia alleging that, from January 2008 through December 2017, Walgreens violated the False Claims Act, by submitting false U&C prices that were higher than the prices it charged for the same drugs sold through its Prescription Savings Club cash discount program (“PSC Program”).

At the center of this lawsuit is the generic discount program prices which were to be considered the pharmacy’s U&C prices for the purposes of billing healthcare plans. Certain Walgreens admissions made during the DOJ case were cited in present complaint as resulting in the same damages to the Plaintiffs. Specifically, Walgreens “did not identify its PSC program prices as its U&C prices for drugs on the PSC program formulary,” despite being so required. Walgreens further admitted that it “offered a savings guarantee pursuant to which PSC program members could recoup (in the form of store credit) the difference between the amount they paid to enroll in the program in a given year and the amount they received in discounted savings under the program in that year.” It is further alleged that Walgreens knowingly and fraudulently concealed its true U&C prices every time it reported prices higher than its PSC Program, JustRx Program, and third party discount card program prices to Plaintiffs, through Plaintiffs’ PBM, in the NCPDP 426-DQ data field.” Additionally, on March 18, 2020, a complaint was filed in BCBSM, Inc. (d/b/a BlueCross and BlueShield of Minnesota), et al. v. Walgreen Co., et al. The allegations in BCBSM complaint share a similar factual and legal nexus to Plaintiffs’ allegations here.

How Frier Levitt Can Help

These actions signal a growing awareness by health plans and other plan sponsors regarding pharmacy claims submission practices that are often not reviewed or acted upon by PBMs. They also signal a growing focus on pharmacies U&C claims submission practices. If you have questions about U&C pricing and prescription discount programs, we urge you to contact Frier Levitt today.

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