Walgreens Boots Alliance, the parent company of Boots UK, has agreed to pay $106.8m (£80.7m) to resolve allegations that American pharmacy chain Walgreens fraudulently charged the US government for prescriptions that were never dispensed.

In a statement on Friday September 13, the US Department of Justice (DoJ) said WBA had “received tens of millions of dollars” from federal healthcare programmes for prescriptions that were processed by branches of Walgreens but not handed over to “healthcare beneficiaries”.

The settlement between the federal government and WBA resolves three pending whistleblower cases in districts in New Mexico, Texas and Florida under the False Claims Act, which the DoJ explained “permits private parties to file suit for false claims on behalf of the United States and to share in any recovery”.

As a result, two whistleblowers are to receive substantial settlements. Steven Turck, a former Walgreens pharmacy manager, will receive just under $15m after filing a suit in the Eastern District of Texas in April 2019, while former pharmacy supervisor Andrew Bustos will receive $1.6m after filing his suit in New Mexico in September 2015.

The US government will receive $91.9m, with $14.9m to be returned to individual states that jointly fund public Medicaid programmes “through separate settlement agreements with the Medicaid participating states”. 

Walgreens will receive a credit of $66.3m as it previously refunded that amount to the government with regard to the settled claims.

Brian M. Boynton, head of the Justice Department’s civil division, said: “Federal healthcare programmes provide critical healthcare services to millions of Americans. We will hold accountable those who abuse these programmes by knowingly billing for goods or services they did not provide.”  

Alexander M.M. Uballez, attorney for the District of New Mexico, said: “Millions of Americans rely on the promise of federal healthcare through programmes like Medicare and Medicaid.

“Fraudulently billing for prescriptions which are never dispensed endangers the integrity of these critical programmes. We are committed to guarding the public’s investment in our health from private corporations.”  

Attorney Damien M. Diggs of the Eastern District of Texas said that while new technologies can benefit companies and patients as well as federal programmes “we will not allow companies to hide behind their implementation of ill-conceived technology and systems”. 

Walgreens, which in January 2020 reported issues with its billing systems and the resulting “substantial overpayment” to the US government, did not admit liability, stating: “Due to a software error, we inadvertently billed some government healthcare programmes for a relatively small number of prescriptions our patients submitted but never picked up. 

“We corrected the error, reported the issue to the government and voluntarily refunded all overpayments.”