In 2018, the International Brotherhood of Electrical Workers Local 38 Health and Welfare Fund and some consumers filed a proposed class action lawsuit against Walgreens Boots Alliance Inc (NASDAQ:WBA).
The plaintiffs alleged that the retail pharmacy engaged in deceptive pricing practices through its Prescription Savings Club (PSC)—a program offering discounted prices on generic drugs for customers who pay without insurance.
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Plaintiffs claim these practices led Walgreens to inflate the “usual and customary” (U&C) prices reported to health insurers and third-party payors, resulting in customers overpaying for generic drugs.
Reuters noted that Walgreens has agreed to pay $100 million to settle a proposed class action lawsuit.
Reuters cited a Walgreens spokesperson and noted that the company accepts no liability and maintains that these claims are without merit.
Walgreens introduced its Prescription Savings Club (PSC) in 2007, offering over 500 commonly prescribed generic medications at reduced prices: $5, $10, or $15 for 30-day supplies, and $10, $20, or $30 for 90-day supplies, depending on the drug’s tier. Enrollment in the PSC requires a yearly fee of $20 for individuals or $30 per family.
The complaint asserts that while Walgreens offered these lower PSC prices to cash-paying customers, it charged higher prices for the same drugs to customers using private insurance, Medicare, or Medicaid. According to the plaintiffs, Walgreens’ PSC prices should have been reported as its U&C prices.
Instead, by reporting higher-than-PSC prices as U&C prices on reimbursement claims, Walgreens allegedly engaged in a hidden dual-pricing scheme for drugs listed under the PSC.
Price Action: At last check Tuesday, WBA stock was up 0.21% at $9.35 during the premarket session.
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