Walgreens to Pay $350 Million for Opioid Prescription Fraud and False Claims Violations

Government Alleges Invalid Prescriptions and Medicare Reimbursement Fraud

On Monday April 21, 2025, the Justice Department, Drug Enforcement Administration (DEA), and Department of Health and Human Services Office of Inspector General (HHS-OIG) entered into a $300 million settlement with Walgreens Co., Walgreens Boots Alliance, Inc., among eight other Walgreens subsidiaries of Walgreens Boots Alliance, Inc. (collectively “Walgreens”), to resolve allegations of opioid prescription fraud—specifically, that Walgreens unlawfully filled millions of prescriptions for excessive quantities of opioids and other controlled substances between August 2012 and March 2023. This makes this one of the largest pharmacy-related settlements to date. This article examines the details of the case, the growing scrutiny on pharmacies in the opioid epidemic, and how Miller Shah LLP helps clients pursue fraud claims involving healthcare and pharmaceutical misconduct.

DOJ Alleges Walgreens Violated the FCA and CSA

The U.S. Government filed the complaint on January 16th, 2025, in Illinois federal court, accusing Walgreens of opioid prescription fraud and violations of the False Claims Act (FCA) and the Controlled Substances Act (CSA). The prescriptions were deemed invalid as they did not have a clear, legitimate medical purpose or were not issued in the standard course of professional practice.

The complaint also asserts that Walgreens sought Medicare reimbursement of those invalid prescriptions and pressured pharmacists to fill prescriptions significantly early without first confirming the validity of the prescription. Walgreens compliance officials failed to properly attend to the evidence that its stores were actively filling invalid prescriptions. In failing to meet its obligations to customers, Walgreens not only violated the FCA and CSA, but also put millions of lives at risk from the unlawful distribution of these substances.

Walgreens Agrees to Federal Oversight and Operational Changes

The settlement agreement contains several mandatory operational changes Walgreens has agreed to implement and maintain over the next seven years to ensure adherence to compliance measures. As part of the settlement, Walgreens agreed to work with the U.S. Department of Health and Human Services to establish a compliance program to offer training, board oversight, and periodic reporting to the agency about the pharmacy’s controlled-substances distribution. It also must verify sufficient staffing to enable thorough review of prescriptions and maintain a system to block prescriptions from prescribers who are writing invalid controlled substance prescriptions. These measures arise in the context of existing compliance measures that, despite being implemented in 2019, have failed to produce sufficient outcomes.

Walgreens’ Public Programs and Risk Mitigation Failures

In 2019, Walgreens Boots Alliance, Inc. produced a Board Report on Oversight of Risk Related to Opioids that identifies their process to “promote ethical conduct and legal compliance and the Company’s compliance with applicable laws and regulations” (2). The Board formed additional standing committees that are responsible for overseeing specific risk assessment in their respective areas including the Audit Committee, the Compensation and Leadership Performance Committee, and the Nominating and Governance Committee. Despite these supposed safeguards in place and oversight responsibilities.

During the class period, Walgreens created the Safe Medication Disposal Program in 2016 that sought to install disposal kiosks at its retail pharmacies to promote safe and convenient disposal of unwanted, unused, or expired medication. By 2019, the program had installed 1,300 safe medication disposal kiosks at its retail pharmacies across 46 states.2 In 2019, Walgreens also began offering naloxone without a prescription at its pharmacies. Although on a surface level these operational changes, new committees, and risk mitigation efforts attempt to address the risks associated with dispensing opioids and controlled substances, in practice, Walgreens failed to meet its obligations regarding its dispensing of opioids and controlled substances.

Growing Enforcement Actions Against Pharmacies Signals Shift in Drug Litigation

This settlement comes amid an increase over the past decade of pharmacies and drug makers agreeing to pay settlements with the government regarding their role in the opioid crisis. For example, “CVS and Walgreens agreed to pay more than $10 billion in a multi-state settlement of lawsuits brought against them over the toll of the opioid crisis” in just 2022 alone. In 2023, CA Attorney General Rob Bonta entered into settlements with CVS and Walgreens and drug manufacturers Allergan and Teva totaling up to $17.3 billion as a result of their role in the opioid crisis.

Other recent opioid related settlements against pharmacies include a 2024 $83 million Texas statewide settlement with Kroger. Early lawsuits relating to the opioid crisis revolved around overdose cases, untruthful marketing and misrepresenting risk, and unjust enrichment. Many of these suits were against pharmaceutical manufacturers and distributors. Only recently has the target of opioid legal action been pharmacy chains like CVS, Walgreens, Rite-Aid, etc., which signals a shift in opioid litigation to include a broader array of actors involved in the misconduct. This is also significant because it indicates greater judicial oversight of pharmacy business practices.

Traditionally, pharmacy chains are less willing to negotiate than larger pharmaceutical manufacturers, with many pharmacy chains believing that liability for overprescribing opioids should fall to physicians.In a 2021 jury trial two Ohio counties that sued CVS Health, Giant Eagle, Walgreens, and Walmart for failing to properly monitor opioid prescriptions, Walgreens claimed that they never manufactured or marketed the opioids. Similarly, CVS Health stated that licensed doctors are the ones writing the scripts, not their pharmacists.”

Pharmacy chains are concerned that an increase in settlements for prescription fraud could set a precedent for a greater scope of liability in areas that would result in them paying for damages like emergency room costs and opioid-related crime. The suits against pharmacies are resulting in store closures. In October 2024, Walgreens announced it was closing 1,200 stores. Similarly, Rite Aid filed for bankruptcy in October 2023 and attempted to restructure amid dealing with losses from opioid lawsuit settlements. Adding pharmacy chains as named defendants alongside manufacturers as well as lawsuits increasingly being brought by the federal government are just a few of the ways increased scrutiny of pharmacies and their role in the opioid crisis manifests in litigation.

Pharmacies’ Role in Creating and Maintaining the Opioid Crisis

The first wave of the opioid crisis emerged in the late 1990s with an increase of OxyContin prescription after Purdue Pharma began aggressively promoting the substance. Its growing availability combined with its targeted marketing contributed to overall increase in abuse and addiction. Between 1996 and 2000, OxyContin sales grew from $48 million to approximately $1.1 billion. While drug manufacturers like Teva, Johnson & Johnson, and Purdue played a large role in contributing to opioid related overdoses, pharmacy chains are also responsible for distributing unlawful prescriptions and failing to employ safeguards like rushing to fill the prescriptions prior to sufficient review.

Walgreens played a large role in creating and maintaining the opioid crisis. A 2023 study from the Drug and Alcohol Dependence Reports assessed pharmaceutical documents released from litigation between 1997-2020 and found that “Walgreens contributed to the early prescription opioid epidemic through improper opioid dispensing.” Specifically, the researchers point to Walgreens dispensing practices of filling orders “without resolving red flags, management pressur[ing] pharmacists to fill more opioid prescriptions, distribution centers fail[ing] to investigate high volume orders, and pharmaceutical companies sponsor[ing] pharmacist continuing education advocating for opioid pain management.”

Their data show that between 2006 and 2014, Walgreens pharmacies dispensed abnormally large amounts of opioids compared to their counterparts. The time period in which they had these abnormal dispense rates directly corresponded with a national upward trend of fatal opioid overdoses. Although the study was released two years prior to when the Justice Department, the DEA, and the HHS-OIG filed the 2025 suit against Walgreens, it still reinforces the allegations revealed in their complaint.

Pharmacies have a responsibility to ensure the drugs they prescribe are within the standard practices and regulations of the industry. The $350 million Walgreens settlement sets a precedent for the increased scrutiny and enforcement actions of the federal government over pharmacy chains.