Walgreens “Usual & Customary” Generic Drug Prices Class Action

This class action alleges that Walgreens artificially inflates its “usual and customary” prices on certain generic prescription drugs. The complaint claims that Walgreens charges lower prices for the drugs to its cash-paying customers who do not have health insurance, if they enroll in something it calls its Prescription Savings Club (PSC).

The plaintiffs in this case are a number of individual consumers and third-party payors, including the International Brotherhood of Electrical Workers Local 38 Health and Welfare Fund, the International Union of Operating Engineers Local 295-295c Welfare Fund, and Steamfitters Fund Local 439.

According to the complaint, “[a] pharmacy cannot charge to a consumer or report to a third-party payor a higher price for prescription drugs than the pharmacy’s ‘usual and customary’ (‘U&C’) price. The U&C price is referred to by Walgreens and known throughout the pharmacy industry as the price that the pharmacy charges the cash-paying public.”

But Walgreens does not do this, the complaint claims; instead, the complaint alleges that it “maintains an undisclosed, dual pricing scheme for the generic prescription drugs available through the PSC.” Thousands of generics are on the PSC formulary drug list, and Walgreens provides discounts off their prices as long as the customer is paying in cash. The complaint thus claims that these prices are Walgreens U&C prices for these drugs.

The complaint alleges that the prices that Walgreens usually gives third-party payors for these drugs are therefore inflated, and consumers are also overcharged because of their copayments, coinsurance, and deductibles. It shows comparisons of the prices charged to the plaintiffs in this case as opposed to those charged to cash-paying individuals.

Page 6, for example, shows a chart of sample prescriptions obtained by one of the individual plaintiffs, Dorothy Forth, where, for example, she paid $40 for a prescription while the PSC price was $15. The complaint states, “Ms. Forth reasonably believed that because she pays premiums for health insurance with prescription benefits coverage that she would pay at least the same as and not more than a cash-paying customer for her prescriptions filled at Walgreens.”

Other large retailers like Walmart and Target have been offering generic prescription drugs to customers at very low prices. However, the complaint claims they report these prices as their U&C prices for those with insurance as well.

The Nationwide Class for this action is all persons or entities in the US and its territories who, during the class period, bought or paid for some or all of the price of generics that Walgreens includes in its Prescription Savings Club formulary, for consumption by themselves and their families, or by their members, employees, insureds, participants, or beneficiaries.

In the alternative, a Multi-State Class has been proposed, involving those in Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Iowa, Illinois, Louisiana, Massachusetts, Minnesota, Nevada, New Mexico, New York, North Carolina, Ohio, Pennsylvania South Carolina, Texas, and Wisconsin.

Article Type: Lawsuit
Topic: Consumer
No case events.
Tags: Different Price for Same Products, Inflated Drug Prices, Pharmaceuticals