For Immediate Release - July 03, 2012

Walmart and Target to Pay $232,000 for Allegedly Overcharging Municipalities for Prescription Drug Coverage

AG's Office has Recovered $8 Million to Date Through Investigations of Pharmacy Chains and Other Retailers

BOSTON – After allegedly overcharging public agencies for prescription drugs through the workers’ compensation insurance system, Walmart and Target Corporation have agreed to pay $232,000 to cities and towns across the Commonwealth, Attorney General Martha Coakley announced today. To date, the AG’s Office has recovered more than $8 million for the Commonwealth through similar investigations of pharmacy chains and lower-volume alternative retailers of pharmaceuticals.

“Cities and towns are under a great deal of economic pressure to provide much needed services to their residents,” AG Coakley said. “We are proud of our work to get money back for cities and towns and to prevent such overcharges from happening in the future.”

Under the terms of the settlements, filed in Suffolk Superior Court yesterday, the Commonwealth and cities and towns will receive $207,000 from Walmart and $25,000 from Target. The payments include double damages for violations of the state’s False Claims Act as well as restitution for alleged overcharges. The terms also require the chains to put procedures in place to guard against future overcharges. 

Cities and towns affected by the allegations against Walmart and Target include Amherst, Boston, Concord, Everett, Fall River, Framingham, Hingham, Lowell, Plymouth, Springfield and Worcester.

The settlements with Walmart and Target follow actions by the Attorney General against major pharmacy chains CVS, Rite-Aid, and Walgreens, which the Attorney General alleged also overcharged towns and cities for drugs under the workers’ compensation system.

The settlement announced today is part of the AG’s ongoing investigation into other entities with Massachusetts pharmacy licenses, such as supermarkets and general retailers. The AG’s Office has also obtained recoveries from both Shaw’s Supermarkets and Stop & Shop regarding their workers’ compensation municipal prescription businesses. 

Combining the major pharmacy chain cases and the settlements with lower-volume alternative retailers, the AG’s investigations have recovered over $8 million thus far. 

The investigation of prescription overcharges to municipalities under the workers’ compensation system is ongoing. The Walmart and Target matters were handled by Assistant Attorneys General Peter Leight and Glenn Kaplan, and by mathematician Burt Feinberg of Attorney General Coakley’s Insurance and Financial Services Division.

###########

Follow us on Twitter – View our Photos – Visit our Website