Walgreens Agrees to $100 Million Settlement in Generic Drug Pricing Lawsuit

Case Overview: Walgreens has agreed to pay $100 million to settle a class action lawsuit accusing it of overcharging customers for generic drugs.

Consumers Affected: Insured customers who purchased generic drugs from Walgreens since 2007.

Court: U.S. District Court for the Eastern District of Illinois

Walgreens, the national pharmacy chain, has agreed to pay $100 million to settle a class action lawsuit accusing it of overcharging customers for generic drugs. The settlement resolves claims that Walgreens defrauded customers with private insurance, Medicare, or Medicaid by charging them higher prices for generic drugs than it charged to members of its Prescription Savings Club.

If approved, the settlement, filed in federal court in Chicago, will resolve a lawsuit that originated in 2017 and alleged that Walgreens engaged in deceptive pricing practices for over a decade.

Walgreens Accused of Overcharging Insured Customers for Generic Drugs

The lawsuit claimed that Walgreens misled insured customers by requiring them to pay more for generic drugs than uninsured customers who were members of the company's Prescription Savings Club. The Prescription Savings Club offered significant discounts on over 500 generic drugs, with 30-day prescriptions costing $5, $10, or $15 and 90-day prescriptions costing $10, $20, or $30.

The plaintiffs alleged that the prices Walgreens charged to its savings club members were its "usual and customary" prices, but the company reported inflated prices to insurance companies for reimbursement purposes. This resulted in insured customers paying more for their generic drugs through higher copays and deductibles.

This practice, the plaintiffs argued, violated state consumer protection laws and constituted a breach of contract, as insured customers reasonably expected to pay the same or lower prices than uninsured customers.

$100 Million Settlement Reached in Generic Drug Pricing Lawsuit

The $100 million settlement will be distributed among the class members, which includes insured customers who purchased generic drugs from Walgreens since 2007, when the Prescription Savings Club was launched.

As part of the settlement, Walgreens has also agreed to terminate its Prescription Savings Club, which it did in August 2024.

While Walgreens admits no liability and maintains that the claims were without merit, the company stated that the settlement allows it to focus on its turnaround strategy and benefit its patients, customers, and shareholders.

Walgreens Faces Other Legal Challenges Related to Billing Practices

This settlement is not the first time Walgreens has faced legal challenges related to its pricing practices. In September 2024, the company agreed to pay $106.8 million to settle claims that it fraudulently billed U.S. government health programs for prescriptions that were never dispensed. The Department of Justice (DOJ) alleged that between 2009 and 2020, Walgreens submitted payment requests to Medicare, Medicaid, and other healthcare programs for prescriptions that were processed but never picked up by patients.

Walgreens attributed the issue to a software error that led to accidental overbilling, but the DOJ claimed that these actions resulted in the company receiving millions of dollars in improper payments. 

Case Details

• Lawsuit: Russo et al v. Walgreen Co.
• Case Number: 1:17-cv-02246
• Court: U.S. District Court for the Eastern District of Illinois

Plaintiffs' Attorneys

• Paul Geller (Robbins Geller Rudman & Dowd)
• Joseph Guglielmo (Scott + Scott Attorneys at Law LLP)

Have you purchased generic drugs from Walgreens? Share your thoughts on the settlement in the comments below.