Investing.com -- Shares of Walgreens Boots Alliance (NASDAQ:WBA) fell by 6% following allegations by the U.S. Justice Department that the pharmacy chain dispensed millions of unlawful prescriptions in violation of the Controlled Substances Act (CSA) and the False Claims Act (FCA).
The civil complaint, filed in the U.S. District Court for the Northern District of Illinois, claims that from August 2012 to the present, Walgreens knowingly filled prescriptions that lacked a legitimate medical purpose, were not valid, or were not issued in the usual course of professional practice.
The government's complaint details that Walgreens pharmacists dispensed controlled substances including opioids, despite clear red flags indicating the likelihood of the prescriptions being unlawful. The complaint also alleges that Walgreens pressured its pharmacists to fill prescriptions quickly without confirming their validity and deprived them of crucial information to prevent such practices.
The lawsuit, which seeks to hold Walgreens accountable for its role in the opioid crisis, could result in civil penalties of up to $80,850 for each unlawful prescription filled under the CSA and treble damages plus penalties for each prescription reimbursed by federal health programs under the FCA. This legal action has raised concerns among investors, as the potential financial implications could be significant.
Leering Partners analysts commented on the situation, stating: "We still have a lot of time to unpack this given the typical time for a suit to progress, a potential trial, and then any further appeal processes, so there is no immediate financial consideration. But it does unfortunately bring further questions that will be subject to public posturing, likely constraining an already depressed multiple given ongoing operational concerns (despite the FY1Q'25 beat)."
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