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Walgreens customer sues company over prescription drug 'clawbacks'

A California man is suing Walgreens Boots Alliance Inc., alleging that the retail pharmacy overcharges customers with insurance and has "secret, undisclosed contracts" with benefit managers, according to a lawsuit filed in a district court Aug. 9.

The lawsuit, filed in the U.S. District Court for the Northern District of Illinois, claims that Walgreens uses "secret contracts" with pharmacy benefit managers to charge insured customers more for some generic drugs than they would pay without insurance.

The lawsuit also charges that Walgreens sends "a significant portion" of co-payments it collects from customers to pharmacy benefit managers, a payment known as a "clawback," according to the complaint.

A Walgreens spokesman told S&P Global Market Intelligence in an email that the lawsuit "lacks merit," adding that the company "will vigorously defend against the allegations."

The lawsuit, filed by law firm Hagens Berman Sobol Shapiro LLP, lists David Grabstald, a San Francisco resident and Walgreens customer, as a plaintiff.

The complaint cites a May 2017 prescription drug purchase Grabstald made at the retail pharmacy. The lawsuit alleges that Grabstald paid $21.80 for the prescription using his insurance policy but later found out that he could have paid $10 in cash for the same drug.

"At no point did Walgreens ever advise [Grabstald] that the cash price was less than his insurance price" or disclose its alleged contracts with the pharmacy managers, the complaint states.

The lawsuit does not specify how much Grabstald or others in the class-action suit are seeking in damages.

The complaint comes one day after the same law firm filed a lawsuit making similar allegations against CVS Health Corp., in district court Aug. 7.

In an email to S&P Global, a CVS spokesman said CVS Caremark, the retailers' pharmacy benefits manager, "does not engage in the practice of co-pay clawbacks," adding that the company will defend itself "against these baseless allegations."