Walgreens recently agreed to pay $360 million to Humana to settle a lawsuit that claimed the company overcharged prescription drug reimbursements for years. The settlement stems from a 2022 lawsuit filed by Walgreens against Humana that sought to overturn a $642 million award that Humana won in a private arbitration between the two companies.
The arbitrator in the case found that Walgreens had breached pharmacy agreements between the two companies by failing to submit Prescription Savings Club prices at its usual and customary charge for drugs sold to Humana members. Therefore, he awarded Humana $572,690,662 in damages and $45,809,540 in prejudgment interest, as well as $22,792,205 in damages and $1,388,046 in prejudgment interest for damages incurred by Humana members. The damages and interest representing amounts incurred by Humana members was to be distributed to affected members within 180 days of the judgment confirming the Final Award.
Walgreens had previously referred to the $642 million award against it as a “miscarriage of justice” and argued that the arbitrator who issued the award “rewrote” its contracts with Humana and accused the arbitrator of “compound[ing] his errors by adopting” a flawed model to determine damages. Walgreens also alleged that the arbitrator was not impartial as he accepted six other appointments involving the law firm that represented Humana in the arbitration.
Related Ongoing Lawsuits
Walgreens also mentioned that it would resolve a related lawsuit in the District of Columbia Superior Court against Crowell and Moring, a law firm that represented Humana in the arbitration. Walgreens alleged that Crowell and Moring had a conflict of interest because the firm had previously represented Walgreens in connection with the drug-price reimbursement issue. A spokesperson for Crowell previously called Walgreens’ ethics claim “meritless” and said the firm was “confident that the arbitrator’s thorough and well-reasoned award will be affirmed.”
That being said, Walgreens is not entirely out of the woods with this settlement as other drug price overcharge claims in other courts still remain against Walgreens, and while some Blue Cross Blue Shield plaintiffs recently withdrew their claims in Chicago federal court, others remain and Walgreens said it will “vigorously defend” itself against those claims.