Walgreens settles dispute over reimbursements

6/4/2008

DEERFIELD, Ill. Walgreens said it has resolved federal and state investigations related to disputes over Medicaid reimbursements for three drugs the company dispensed at its pharmacies. The company denied any wrongdoing in connection with the settlement.

Many generic drugs, including those at issue in the settlement agreement, are made as both tablets and capsules. Between 2001 and 2004, Walgreens dispensed one form of each of the generic drugs at issue instead of another form of the same drug. Federal and state regulators investigated to determine whether this practice resulted in higher Medicaid reimbursement to the company. Walgreens believes the reimbursements it received from Medicaid were consistent with applicable regulations. .

The company has agreed to pay the federal government, 42 states and Puerto Rico a total of $35 million, plus investigative costs of approximately $280,000. Walgreens has reserved for the settlement, which will have no impact on financial results.

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