Update:
- Walgreens agreed to pay $100 million to resolve claims the drug store chain artificially inflated the price of generic drugs.
- The Walgreens settlement resolves a class action lawsuit a group of consumers filed against the company in 2017.
- The consumers argued Walgreens engaged in an unlawful practice of charging insured consumers a higher price for prescription generic medications.
- In 2018, a federal judge ruled Walgreens could not escape the claims, determining the company failed on most of its dismissal arguments.
- The judge trimmed claims of negligent misrepresentation and those brought under the Missouri Merchandising Practices Act.
(March 13, 2018)
A federal judge ruled that Walgreens must face a class action lawsuit alleging the drug store chain artificially inflates the prices of generic drugs, resulting in insured consumers paying more than uninsured consumers.
Lead plaintiffs allege in their class action lawsuit that they and others with employer provided health insurance ended up paying much more for generic drugs at Walgreens due to fraudulent inflation of drug prices.
The plaintiffs claim Walgreens charged them and others more than the usual and customary price for generic drugs that resulted in them paying more than uninsured customers in violation of state consumer protection laws.
Walgreens tried to dodge the class action lawsuit, arguing it should be dismissed, but failed on most of its arguments. Although U.S. District Court Judge John Z. Lee trimmed the plaintiffs’ claims under the Missouri Merchandising Practices Act and for negligent misrepresentation, he left the remainder of the class action lawsuit’s claims intact.
Judge Lee noted that the plaintiffs supported their claims that drug prices were fraudulently inflated by pointing out that Walgreens itself reported higher than usual prices charged to insurance companies for generics than compared to the prices charged to Walgreens’ drug club members. Under the terms of the drug club, consumers paid a fee every year to be charged a flat rate for certain prescription drugs.
“Here, plaintiffs have plausibly alleged that the [Prescription Savings Club] prices qualified as [usual & customary] prices and that Walgreens made false statements of fact every time it reported higher-than-PSC prices as U&C prices to insurance providers,” noted the order.
The Walgreens class action lawsuit alleges that the plaintiffs, members of a union with a prescription benefits plan, as well as other consumers were unable to participate in Walgreens’ Prescription Savings Club because of their membership in their employer provided plans.
They allege that Walgreens artificially inflated prices of generic drugs for those with insurance and benefit plans in a way that required them to pay more than if they were members of the Prescription Savings Club.
Walgreens also could not convince the judge to trim most of the class action lawsuit claims under state consumer protections laws; however, Judge Lee pointed out that the plaintiffs’ claims established the necessary elements of those state laws – deceit, fraud, and negligent misrepresentation.
“In sum, the Court denies Walgreens’ motion to dismiss IBEW’s claims under the ICFA (Count IV) and the GFBPA (Count XIII), but grants its motion to dismiss IBEW’s claims under the MMPA (Count XX),” concluded the judge.
The plaintiffs are represented by Susan M. Coler, Melissa Wolchansky and Amy E. Boyle of Halunen Law; Erin Green Comite and Joseph P. Guglielmo of Scott+Scott Attorneys at Law LLP; Andrew A. Lemmon of Lemmon Law Firm LLC; Daniel K. Bryson and Jeremy R. Williams of Whitfield Bryson & Mason LLP; Michael S. Brandner Jr. of Brandner Law Firm LLC; and Joseph S. Tusa of Tusa PC Attorneys and Counselors at Law.
The Walgreens Generic Drug Pricing Class Action Lawsuit is Dorothy Forth, et al. v. Walgreen Co., et al., Case No. 1:17-cv-02246, in the U.S. District Court for the Northern District of Illinois, Eastern Division.
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