Walgreens Boots Alliance (WBA, Financials) saw its stock decline on Friday following the announcement of a U.S. Department of Justice lawsuit accusing the company of knowingly filling millions of unlawful prescriptions for controlled substances. Shares closed at $12.52, down 3.17%, and extended losses in after-hours trading, falling an additional 5.03% to $11.89.
Alleging that Walgreens violated the Controlled Substances Act and the False Claims Act, the DOJ filed the complaint in the U.S. District Court for the Northern District of Illinois The lawsuit claims that while evident signs indicated they lacked a genuine medical use, the drugstore chain completed prescriptions for opioids and other banned drugs.
Walgreens pharmacists reportedly handled early refills, distributed too many opioids, and completed prescriptions for combinations of medicines often misused together from August 2012 forward. Federal investigators assert that Walgreens put efficiency before compliance, so pharmacists were under pressure to fast fill prescriptions without sufficiently confirming their validity. The complaint also claims that the firm violated the FCA by seeking compensation for these prescriptions via government healthcare programs.
For each illegal prescription dispensed under the CSA, Walgreens might be subject to civil fines ranging from $80,850; moreover, triple damages for FCA breaches. The case highlights even more the company’s allegedly responsibility in aggravating the opioid epidemic, which has resulted in major public health effects like overdoses.
Under the FCA’s qui tam rules, which let private citizens sue on behalf of the government and share in any financial recovery, the Justice Department’s case aggregates whistleblower complaints submitted. Federal authorities underlined how important pharmacies are in guaranteeing responsible dispensing of regulated drugs.
The market response on Friday highlights investor worries about the financial consequences of the case, which may lead to significant fines and more government inspection. Though Walgreens has more than 8,000 stores all throughout the country, it has not made a public comment on the matter.