DOJ Announces Settlement with Rite Aid Over Opioid Prescriptions

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The United States Department of Justice (DOJ) announced a settlement with Rite Aid Corporation and ten of its subsidiaries and affiliates under the False Claims Act (FCA) and Controlled Substances Act (CSA). The settlement includes a $7.5 million payment to the United States government and an allowed, unsubordinated, general unsecured claim of $401,868,524 in Rite Aid’s pending bankruptcy case.

According to the DOJ, from May 2014 through June 2019, Rite Aid knowingly dispensed hundreds of thousands of unlawful prescriptions for controlled substances that either lacked a legitimate medical purpose and were not issued in the usual course of professional practice and/or were not valid prescriptions/were not for a medically accepted indication/were medically unnecessary.

The DOJ notes that the unlawful prescriptions included prescriptions for excessive quantities of opioids (including oxycodone and fentanyl) and prescriptions that were issued by prescribers who Rite Aid pharmacists repeatedly identified as suspicious and writing unlawful and unnecessary prescriptions. The government alleged that Rite Aid filled the prescriptions despite clear “red flags” that indicated the prescriptions were likely to be unlawful. Rite Aid further allegedly ignored substantial evidence that its stores were dispensing unlawful prescriptions, including ignoring specific concerns raised by pharmacists, and intentionally deleted internal notes about suspicious prescribers written by Rite Aid pharmacists (i.e., “writing excessive dose[s] for oxycodone,” and “DO NOT FILL CONTROLS.”)

The government alleges that by knowingly dispensing unlawful prescriptions for controlled substances, Rite Aid violated the CSA. In instances where Rite Aid sought reimbursement from federal healthcare programs, the company also violated the FCA.

The settlement also resolved claims that certain Washington State Rite Aid pharmacies violated the CSA by filing prescriptions written by prescribers who lacked proper controlled substance prescribing authority. Additionally, some of the claims were brought forth by former Rite Aid pharmacies under the qui tam provisions of the FCA.

The amount that the government will be able to collect under the bankruptcy unsecured claim will depend on the final amount of assets available to the bankruptcy estate for distribution to unsecured creditors. The Total Settlement Amount of $409,368,524 includes: CSA penalties of $236,090,058 (no restitution); FCA damages of $167,973,926 (including $80,236,964); and additional CSA penalties from the Washington investigation of $5,304,539 (no restitution).

Additional Agreements

On top of the civil settlement, Rite Aid also entered into agreements with the Drug Enforcement Administration (DEA) and the Department of Health and Human Services Office of Inspector General (HHS OIG) to address future obligations. Rite Aid and the DEA entered a Memorandum of Agreement that intends to increase communication between the company, retailers, and the DEA. Employees will also receive additional training to help them identify illegitimate prescriptions and minimize the risk of drug diversion. Rite Aid will also implement and manage an anonymous hotline for employees, patients, and the public to report suspected illegal dispensing of highly diverted controlled substances and suspected violations of the CSA.

Rite Aid entered into a Corporate Integrity Agreement (CIA) with HHS OIG. The CIA includes an Independent Review Organization requirement to determine whether prescription drugs are properly prescribed, dispensed, and billed.

“Pharmacies and pharmacists have an affirmative legal duty to ensure that the prescriptions they fill are legitimate,” said U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio. “When they disregard this responsibility and instead ignore red flags indicating that prescriptions for addictive painkillers are invalid, they violate the public’s trust and harm the community they are supposed to serve — all to make a buck. Our settlement with Rite Aid reinforces the Northern District of Ohio’s continued commitment to combatting the opioid crisis. My office and our law enforcement partners will continue to battle this epidemic by ensuring that corporate actors comply with their legal obligations, which help to restrict unwarranted public access to highly addictive medications, and thereby fight to keep vulnerable members of our communities from becoming addicted to opioids.”

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