Walgreens, Stephen L. LaFrance Holdings Co. and Other USA Drug Chain Pharmacies Pay $16 Million to Resolve False Claims Act Overbilling Case
August 24, 2023. Vogel, Slade & Goldstein, LLP (VSG) announced today that Walgreens, Stephen L. LaFrance Holdings Co. and several companies that were part of USA Drug, a regional pharmacy chain acquired by Walgreens, have agreed to pay $16 million to settle a whistleblower lawsuit brought by VSG’s client, Doug Strauser.
The False Claims Act complaint alleged that the pharmacies knowingly overbilled Medicare Part D, Medicaid and other government health programs by millions of dollars. Mr. Strauser, a former USA Drug pharmacist, alleged that USA Drug charged the government much more for generic drugs—in some cases, as much as 38 times more—than what it charged its uninsured customers in violation of rules requiring pharmacies to bill these government-funded health programs no more than their “usual and customary” price to uninsured customers.
Mr. Strauser filed his lawsuit in 2013 under the qui tam provisions of the federal False Claims Act and the false claims laws of New Jersey, Oklahoma and Tennessee. After the government plaintiffs declined to join the lawsuit in 2018, Mr. Strauser and his counsel pursued the case for five more years on their own. This work culminated in this year’s $16 million settlement.
Mr. Strauser will receive 29% of the federal government’s recovery and 28% of Tennessee’s recovery as a reward for bringing the information forward, with reward discussions with Oklahoma underway as well.