Ahold Delhaize Settles for $40 Million Over Prescription Pricing Dispute
A notable grocery chain has decided to fork over $40 million to resolve a lawsuit centering around prescription price reporting that allegedly caused the government to pay more in reimbursements than necessary.
The Department of Justice has identified Ahold Delhaize USA Inc., based in Quincy, Massachusetts, as the operator of several grocery brands like Stop & Shop, Giant, Hannaford, and Food Lion. These stores include in-store pharmacies that provide savings programs to shoppers.
Federal authorities state that pharmacies running these savings programs must report discounted prices as “usual and customary” on invoices sent to federal health care programs.
However, it appears that Ahold Delhaize’s pharmacies submitted higher, undiscounted prices while billing programs like Medicare Part D, Medicaid, and Tricare. This inflated reporting led to increased reimbursement amounts from the government, as alleged by the Justice Department.
According to Assistant Attorney General Brett A. Shumate, “Federal health care programs rely heavily on pharmacies to provide accurate pricing information for their payment methods.” He went on to explain that when pharmacies inflate these “normal and customary” prices in their claims, it causes the federal programs to pay unnecessarily high amounts.
As for the settlement distribution, about $32.9 million will benefit the federal government, while the remaining funds will be allocated to the states involved in the lawsuit. Interestingly, Laurence Labenne, a former pharmacist at an Ahold Delhaize store in Pennsylvania who blew the whistle on this issue, is set to receive over $6 million from the federal portion of the settlement.
Troy Rivetti, the U.S. Attorney for the Western District of Pennsylvania, stressed that pharmacies have a responsibility to charge the proper contracted prices for Medicare and Medicaid and should not exploit the system for gain. “This settlement demonstrates our commitment to holding dishonest pharmacies accountable,” he remarked.
The settlement is the result of a collaborative effort involving various divisions of the Department of Justice, along with backing from the Department of Health, the Defense Health Agency, and state Medicaid programs.
