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DOJ Files Complaint in Intervention in Baron & Budd Whistleblower Lawsuit Against Walgreens

1. DOJ filed a complaint against Walgreens for opioid dispensing practices. 2. Walgreens allegedly filled unlawful prescriptions, violating the CSA and FCA. 3. Lawsuit claims Walgreens prioritized profits over patient safety and public health. 4. DOJ's action follows $409 million settlement in a similar case against Rite Aid. 5. Federal scrutiny of Walgreens could boost regulatory actions in the pharmacy sector.

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FAQ

Why Very Bearish?

The DOJ's intervention indicates serious legal challenges ahead, similar to Rite Aid.

How important is it?

The DOJ involvement could lead to significant financial penalties and operational changes for Walgreens.

Why Long Term?

Ongoing investigations and lawsuits can take years to resolve, impacting stock performance.

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WASHINGTON--(BUSINESS WIRE)--Yesterday, the United States Department of Justice (DOJ) filed a complaint in intervention in four separate whistleblower lawsuits brought by whistleblowers under the Controlled Substances Act (CSA) and the False Claims Act (FCA) against Walgreens. One of those suits, brought by Baron & Budd, alleges that Walgreens engaged in harmful opioid dispensing practices that contributed to the ongoing opioid epidemic. The DOJ complaint alleges that Walgreens knowingly filled millions of unlawful prescriptions for controlled substances that lacked a legitimate medical purpose, were not for a medically accepted indication, or were prescribed outside the usual course of professional practice. Due to this alleged conduct, taxpayer-funded healthcare programs like Medicare, Medicaid, and Tricare ended up covering the cost of these illegitimate prescriptions, violating the FCA and wasting federal taxpayer dollars. The complaint details how Walgreens allegedly prioritized profits over patients and flaunted its obligations under the CSA. It also contains harrowing allegations about Walgreens repeatedly filling prescriptions for known pill mill doctors and about Walgreens customers who overdosed shortly after receiving opioids from Walgreens. DOJ’s intervention follows the Baron & Budd suit, originally filed in 2019. That complaint, filed by a former Walgreens pharmacist whistleblower, alleged similar violations of the CSA and FCA. The former Walgreens pharmacist accused Walgreens of pressuring pharmacists to rush and fill prescriptions without conducting research for red flags, like a doctor writing unusually large amounts of opioid prescriptions or customers with prescriptions for unusually high dosages or dangerous combinations. In fact, the lawsuit alleges that when the whistleblower pharmacist raised concerns – including after a customer overdosed in the Walgreens restroom, when customers directly used opioids in stores, or when customers were engaged in transactions selling their opioids in the Walgreens parking lots – either nothing was done, or it was made clear to him that raising concerns like this would result in having his hours reduced to punish him for causing problems. After the federal government investigated the whistleblowers’ claims, the DOJ filed its complaint in intervention yesterday, signaling a heightened federal response to the opioid crisis and healthcare fraud. This move follows a $409 million settlement in a similar whistleblower case against Rite Aid, also filed by Baron & Budd. “We are encouraged by the DOJ’s decision to intervene and pursue claims against Walgreens for its role in fueling the opioid crisis,” said Scott Simmer, Shareholder at Baron & Budd. “Major retail pharmacies, like Walgreens, have failed in their duty to responsibly and safely dispense dangerous drugs, contributing to the largest public health crisis our country has faced. The cost of their greed has been measured in lives lost, rampant addiction, and billions of wasted taxpayer dollars.” Pharmacies’ failure to recognize and act on red flags in opioid prescriptions has been a critical factor in the widespread abuse and diversion of these dangerous drugs. By ignoring these warning signs for financial gain, Walgreens and other pharmacies contributed to the rise of addiction, overdose deaths, and extensive harm to public health and government healthcare programs. “The Department of Justice’s intervention in this case is a crucial step in holding large corporations accountable for their role in the opioid epidemic,” said Baron & Budd Shareholder Will Powers. “Walgreens, by prioritizing profits over patient safety and public health, not only violated federal law but also contributed to a devastating public health crisis that continues to impact communities across the country. This action sends a clear message that those who enable opioid abuse and fraud will be held responsible.” About Baron & Budd, P.C. With more than 40 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of public entities and tens of thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse and significant as dangerous and highly addictive pharmaceuticals, defective medical devices, asbestos and mesothelioma, wildfires, environmental contamination, fraudulent banking practices, e-cigarettes, motor vehicles, federal whistleblower cases, and other consumer fraud issues.

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