Walgreens agrees to pay $100 million to settle lawsuit over generic drug prices

Walgreens has agreed to pay $100 million to settle a proposed class action lawsuit accusing the company of fraudulently overcharging customers for a decade when they purchased generic drugs through private insurance, Medicare or Medicaid.

Walgreens has been accused of falsely charging insured customers higher payments than members of its Prescription Savings Club, which, for a low annual fee, was able to purchase more than 500 commonly prescribed generic drugs at $5, $10 and $15 for 30-day and 10-day prescriptions and could buy $20 and $30 for 90-day prescriptions without purchasing insurance.

In a lawsuit filed Friday in federal court in Chicago, attorneys for the plaintiffs' group suing the drugstore chain sought approval of the settlement, calling it an “excellent outcome” for the group.

“We assume no liability and believe these claims were never substantiated,” a Walgreens spokesman said in a statement. “This resolution allows us to focus on our turnaround strategy that benefits our patients, customers, team members and shareholders.”

The lawsuit alleged that the prices Walgreens charged its savings club members were the “usual and customary” prices and that the prices it reported to insurers for reimbursement were inflated. It says that insured customers had a reasonable expectation that they would pay no more than customers who paid out of pocket, but ended up paying more in the form of co-payments and deductibles.

The lawsuit sought damages for insured customers across the country since 2007, when Prescription Savings Club was founded.

One condition of the settlement was that Walgreens dissolve the savings club, which it did in August.

The case is Russo et al v. Walgreen Co., U.S. District Court for the Eastern District of Illinois, No. 1:17-cv-02246.

For Plaintiffs: Paul Geller of Robbins Geller Rudman & Dowd, Joseph Guglielmo of Scott + Scott, and others

For Walgreens: Selina Coleman and Michael Scott Leib of Reed Smith