Pharmacy giant Walgreens has agreed to pay $2.8 million to settle allegations that it inflated generic drug prices submitted to Medicaid programs in Massachusetts and Georgia—a case that stemmed from whistleblower claims and a federal False Claims Act lawsuit.
Federal prosecutors announced the agreement Thursday, marking yet another legal challenge for the retail drugstore chain, which has faced increased scrutiny over pharmaceutical pricing practices and compliance issues.
Allegations of Inflated Medicaid Prices
The controversy revolves around how Walgreens reported drug prices to Medicaid. State reimbursement programs determine payments based on the lowest available pricing, including a pharmacy’s “usual and customary price”—the amount the store regularly charges customers.
According to federal prosecutors, between 2008 and 2023, Walgreens submitted artificially high pricing for certain generic drugs, leading to inflated reimbursements from Medicaid programs in Massachusetts and Georgia.
Despite the settlement, Walgreens declined to comment on the case.
