Walgreens Agrees to $100 Mn Settlement Over Generic Drug Pricing Allegations

The lawsuit alleged Walgreens charged higher prices to customers using insurance compared to those paying out of pocket under its Prescription Savings Club.

Walgreens has agreed to pay $100 million to settle a proposed class action lawsuit claiming it overcharged insured customers for generic drugs for over a decade. 

The lawsuit alleged Walgreens charged higher prices to customers using insurance compared to those paying out of pocket under its Prescription Savings Club.

The class action lawsuit, filed in the US District Court for the Eastern District of Illinois, argued that Walgreens’ pricing structure resulted in higher costs for insured customers purchasing generic medications. 

According to the plaintiffs, Walgreens’ Prescription Savings Club allowed customers, for a nominal annual fee, to purchase widely-used generic drugs at discounted rates—$5, $10, or $15 for 30-day supplies and $10, $20, or $30 for 90-day supplies. 

In contrast, insured customers allegedly paid higher prices through copays and deductibles.

The plaintiffs asserted that Walgreens’ savings club prices should have been the “usual and customary” prices reported to insurers, who were billed at inflated rates instead. 

This, the lawsuit argued, led insured customers to believe their costs would not exceed those paying out of pocket, but instead, they often paid more.

Settlement & Walgreens’ Response

The settlement, filed on Friday in a federal court in Chicago, seeks court approval for what plaintiffs’ lawyers have termed an “excellent result” for the affected class. 

The lawsuit covers damages for insured customers nationwide dating back to 2007, the year Walgreens introduced the Prescription Savings Club.

A Walgreens spokesperson said, “We admit no liability and believe these claims never had any merit. This resolution allows us to focus on our turnaround strategy that will benefit our patients, customers, team members and shareholders.” 

Walgreens ended the Prescription Savings Club in August as a condition of the settlement.

The case, Russo et al v. Walgreen Co., highlights ongoing scrutiny over pharmacy pricing practices and brings attention to how such pricing impacts patients relying on insurance for necessary medications.