Walgreen Pays $7.9M to End Gov't Investigation


NEW YORK (AP) – The U.S. Department of Justice said Friday that Walgreen Co. will pay $7.9 million to resolve allegations it illegally tried to get federal health care beneficiaries to switch their prescriptions to Walgreen pharmacies.

The Justice Department says the Deerfield, Ill., company offered inducements to people who get their health care from government programs like Medicare, Medicaid, the Federal Employees Health Benefits Program, and the Defense Department's Tricare program. Walgreen offered $25 gift cards to people who transferred their prescriptions to Walgreen pharmacies.

Retail pharmacies are not allowed to try to win business from people whose prescriptions are paid for by the government.

The agency said Walgreen offered the rewards to anyone who transferred a prescription to one of its pharmacies. The company's ads acknowledged that the offer was not valid for government programs, but the Justice Department said Walgreen often ignored the exemption and handed gift cards to customers who are beneficiaries of government programs.

The government's action began as a whistleblower lawsuit brought by a former Walgreen pharmacy technician and an independent pharmacist. The federal government will get $7.3 million from the settlement, and $1.3 million from that total will go to whistleblowers. About $600,000 will go to the states that participated in the inquiry.

Walgreen is the biggest U.S. drugstore chain. It has 7,847 stores in all 50 states, Washington DC, and Puerto Rico.

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