Exhibit A

Case: 1:20-cv-01853 Document #: 289-1 Filed: 06/09/22 Page 1 of 68 PageID #:6404
IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

CAREFIRST OF MARYLAND, INC., GROUP ) 

HOSPITALIZATION AND MEDICAL SERVICES, ) 

INC., and CAREFIRST BLUECHOICE, INC., ) 

 ) 

 ) Civil No.: 

 Plaintiffs, ) 

 ) Jury Trial Demanded 

 v. ) 

 ) 

WALGREEN CO. AND WALGREENS BOOTS ) 

ALLIANCE, INC., ) 

 ) 

 Defendants. )

CAREFIRST OF MARYLAND, INC., GROUP HOSPITALIZATION AND MEDICAL 

SERVICES, INC., AND CAREFIRST BLUECHOICE, INC.’S 

FIRST AMENDED COMPLAINT 

Plaintiffs CareFirst of Maryland, Inc. (“CFMI”), Group Hospitalization and Medical 

Services, Inc. (“GHMSI”), and CareFirst BlueChoice, Inc. (“CareFirst BlueChoice”) hereby 

amend their Complaint, pursuant to Federal Rule of Civil Procedure 15, while adopting and 

incorporating the original Complaint and its assertions in their entirety, and bring this First 

Amended Complaint against Defendants Walgreen Co. and Walgreens Boots Alliance, Inc. 

(collectively, “Walgreens” or “Defendants”). Plaintiffs seek to recover damages from Defendants 

for for violations of the federal Racketeer Influenced and Corrupt Organizations (“RICO”) Act, 

fraud, fraudulent nondisclosure, unjust enrichment, and state statutory claims. In support of this 

action, Plaintiffs state and allege as follows: 

I. PRELIMINARY STATEMENT 

1. For more than a decade, Walgreens—one of the largest retail drugstore chains in 

the United States—has knowingly and intentionally engaged in an ongoing fraudulent scheme to 

overcharge Plaintiffs for prescription drugs by submitting claims for payment at artificially inflated 

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prices. To conceal its scheme, Walgreens has made false statements and omitted material facts in 

connection with its true usual and customary (“U&C”) prices—the payment ceiling generally 

defined as the cash price to a member of the general public paying for a prescription drug without 

insurance—for prescription drugs dispensed to individuals covered by Plaintiffs’ health plans. 

Walgreens fraudulently submitted inflated U&C prices on millions of claims reimbursed by 

Plaintiffs. Through its fraudulent scheme, Walgreens has overcharged Plaintiffs hundreds of 

millions of dollars for prescription drugs. 

2. Significantly, on January 15, 2019, Walgreens settled claims brought by the United 

States, 39 states, and the District of Columbia alleging that, from January 2008 through December 

2017, Walgreens violated the False Claims Act, 31 U.S.C. § 3729, et seq., by submitting false 

U&C prices that were higher than the prices it charged for the same drugs sold through its 

Prescription Savings Club cash discount program (“PSC Program”), thereby obtaining more 

money in reimbursements for Medicaid fee-for-service claims than it was entitled to receive.1

 

Walgreens has now admitted—for the first time—that “in submitting claims for reimbursement,” 

Walgreens “did not identify its PSC program prices as its U&C prices for drugs on the PSC 

program formulary,” despite being so required.2

 Walgreens further admitted—for the first time—

facts demonstrating that the PSC Program itself was a sham, including that it “offered a savings 

guarantee pursuant to which PSC program members could recoup (in the form of store credit) the 

difference between the amount they paid to enroll in the program in a given year and the amount 

1 U.S. ex rel. Baker v. Walgreens, Inc. and Walgreen Co., No. 12 Civ. 00300-JPO, Stipulation and Order 

of Settlement and Dismissal ¶ 2(e) (S.D.N.Y. docket filed Jan. 24, 2019) (ECF No. 53) (hereinafter 

“Walgreens’ DOJ Settlement”). 

2 Id. 

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they received in discounted savings under the program in that year.”3

 Plaintiffs similarly have 

been damaged by the same fraudulent course of conduct, as described and admitted to by 

Walgreens in the Walgreens’ DOJ Settlement. 

3. Plaintiffs are health care plans offering comprehensive health care services and 

coverage, including prescription drug coverage, to their members. When plan members fill 

prescriptions covered by Plaintiffs at a Walgreens pharmacy, Walgreens submits electronic claims 

to Plaintiffs for reimbursement for those prescriptions (through Plaintiffs’ contracted pharmacy 

benefit managers (“PBMs”)). In submitting electronic claims for payment, Walgreens is required 

to truthfully and accurately submit its U&C price for each dispensing event, in accordance with, 

inter alia, the National Council for Prescription Drug Program (“NCPDP”)4

 requirements. 

4. Plaintiffs calculate the drug price to be paid to the pharmacy based on whether the 

U&C reported by Walgreens for a particular drug is less than or greater than the price that has been 

otherwise negotiated for that drug. The U&C price functions as a reimbursement ceiling, ensuring 

that health plans do not pay Walgreens more than what Walgreens charges cash-paying customers 

paying without insurance. This payment methodology is consistent across government standards, 

PBM instructions manuals, and decades-long industry practice, which recognize that 

reimbursements are to be adjudicated under this formula. 

5. In 2006, “big box” retailers like Walmart, Target, and Costco disrupted the retail 

pharmacy market by offering deeply discounted generic drugs—$4 for 30-day supplies—to their 

customers while also giving third-party payors, including Plaintiffs, the benefit of that deal by 

reporting their discount prices as their U&C prices for the same drugs, consistent with NCPDP 

3 Id. 

4 NCPDP is an accredited, non-profit organization that maintains the industry standard for electronic 

transmission and adjudication of pharmacy claims. 

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and industry standards. Federal health regulators at the Centers for Medicare and Medicaid 

Services (“CMS”) also made clear that generic discount program prices were to be considered the 

pharmacy’s U&C prices for the purposes of billing government healthcare programs. 

6. Walgreens recognized the need to retain and attract new customers, but—unlike the 

“big box” retailers—decided not to absorb substantially reduced margins in connection with 

lowering its U&C prices submitted to third-party payors, including Plaintiffs. Concerned with 

maintaining its massive pharmacy revenue, which historically accounts for a vast majority of 

Walgreens’ total revenue, and at the same time competing with “big box” retailers and other 

pharmacies for in-store traffic and cash sales, Walgreens developed and carried out a massive fraud 

that resulted in substantial financial harm to Plaintiffs. 

7. In or around 2007, Walgreens created the PSC Program to maintain its margins on 

brand and generic drugs by systematically overcharging Plaintiffs for prescription drugs dispensed 

to their members. Walgreens created the PSC Program for two reasons: first, to maintain and 

increase its market share for cash customers by offering deep discounts on prescription drugs, and 

second—and more importantly—to obfuscate its true U&C prices from third-party payors, 

including Plaintiffs. Walgreens artificially divided its cash business, which formerly consisted 

solely of customers who pay cash, into two segments: customers who pay the high cash price 

(which it would include in its U&C price) and customers who pay the low cash price (i.e., the price 

offered by the PSC Program or other similar programs, which would be excluded from U&C). In 

short, Walgreens created the PSC Program in a covert attempt to insulate its high U&C prices by 

artificially dividing its customer base in a way that would undermine the central purpose of any 

health insurance company’s prescription drug benefit—that Plaintiffs do not pay more than what 

cash customers pay for the same drugs. 

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8. But unbeknownst to Plaintiffs, Walgreens submitted U&C prices that were 

regularly five, ten, or even twenty times higher than what Walgreens actually charged cash 

customers through its PSC Program (and other programs). Still, on its claims for reimbursement 

to Plaintiffs, Walgreens reported those artificially inflated “U&C” prices, which were neither usual 

nor customary, as its U&C prices. By submitting false and inflated U&C prices to Plaintiffs, 

Walgreens knowingly and wrongfully overcharged Plaintiffs on millions of claims. 

9. Walgreens knowingly and intentionally concealed from Plaintiffs the actual cash 

prices offered to members of the general public paying without insurance—i.e., Walgreens’ true 

U&C prices—on both brand and generic prescription drugs. To conceal its fraudulent scheme, 

Walgreens knowingly made false statements and omitted material facts in connection with its true 

U&C prices, including, but not limited to, the scope of PSC Program membership; PSC Program 

eligibility; the enrollment process; the enrollment “fee”; and frequency, share, number, and other 

key data points related to Walgreens’ cash sales under the PSC Program and other similar discount 

programs; and other discounts (not associated with a discount program) offered to the individuals 

paying without insurance for drugs also dispensed to Plaintiffs’ Members. 

10. For example, Walgreens also effectuated this fraud by offering a prescription 

savings club called “JustRx” (“JustRx Program”) to customers at more than 1,900 Walgreensowned Rite Aid-branded pharmacy locations and at Walgreens and Duane Reade pharmacy 

locations and failing to report these prices as U&C. Additionally, Walgreens further effectuated 

this fraud by charging third-party branded discount card prices to individuals who pay without 

insurance, e.g., RxSaver and GoodRx (“third-party discount card programs”) and, similarly, failing 

to report these prices as U&C. 

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11. In addition, Walgreens was able to accomplish this scheme through the knowing 

participation and facilitation of PBMs, including (as alleged herein) Caremark. These activities, as 

described herein, constitute to violations of the RICO Act. 

12. As a result of Walgreens’ fraudulent and unlawful scheme, Walgreens has 

substantially overcharged Plaintiffs for prescription drugs purchased by their Members at 

Walgreens’ pharmacies. Plaintiffs reimbursed Walgreens for their Members’ brand and generic 

prescription drugs based on Walgreens’ inflated U&C prices and, as a result, Plaintiffs were 

overcharged millions of dollars. 

II. THE PARTIES 

A. Plaintiffs 

13. Plaintiff CFMI is a not for profit corporation organized under the laws of Maryland 

with its principal place of business in Baltimore, Maryland. CFMI operates as a nonprofit health 

services plan in Maryland. 

14. Plaintiff GHMSI is a congressionally chartered corporation with its principal place 

of business in Washington, D.C. GHMSI operates as a not for profit health services plan in two 

counties of Maryland, Northern Virginia, and the District of Columbia. 

15. Plaintiff CareFirst BlueChoice is a corporation organized under the laws of the 

District of Columbia with its principal place of business in Washington, D.C. CareFirst 

BlueChoice operates as a health services plan in Maryland, Northern Virginia, and the District of 

Columbia. 

B. Defendants 

16. Defendant Walgreen Co. (“Walgreen Co.”) is an Illinois corporation that maintains 

its corporate headquarters at 200 Wilmot Road in Deerfield, Illinois 60015. Until December 31, 

2014, Walgreen Co. had no corporate parent. On December 31, 2014, Walgreen Co. became a 

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wholly-owned subsidiary of Defendant Walgreens Boots Alliance, Inc. pursuant to a merger to 

affect a reorganization of Walgreen Co. into a holding company structure (“Reorganization”), with 

Walgreens Boots Alliance, Inc. becoming the parent holding company.5

17. Defendant Walgreens Boots Alliance, Inc. (“WBA”) is a Delaware corporation 

with its principal place of business and corporate headquarters at 108 Wilmot Road in Deerfield, 

Illinois 60015. On December 31, 2014, WBA became the successor of Walgreen Co., pursuant to 

the Reorganization, with WBA becoming the direct parent holding company and Walgreen Co. 

becoming a wholly-owned subsidiary of WBA.6 

18. All WBA profits are derived from its wholly-owned operating subsidiaries, 

including Walgreen Co. Because of their integrated operations, Walgreen Co. and WBA are 

referred to herein as “Walgreens.” 

19. During the course of the events alleged in this action, Walgreens operated under 

the trade name Walgreens or through various Walgreens-affiliated store banners across the United 

States, including but not limited to: Duane Reade, Kerr Drug, Super D Drug, USA Drug, Happy 

Harry’s, Med-X Drug, May’s Drug, and Drug Warehouse (collectively, “Walgreens-affiliated 

banners”). 

20. Walgreens is one of the largest retail drugstore chains in the United States based on 

both revenues and number of stores. Walgreens operates 9,277 retail pharmacies in all fifty states, 

5

 Form 10-K for Fiscal Year ending 08/31/2018, WALGREENS BOOTS ALLIANCE, INC. (Oct. 11, 2018) 

(“WBA 2018 10-K”), at 1, available at 

https://www.sec.gov/Archives/edgar/data/1618921/000162828018012472/wba-2018831x10k.htm

(accessed Aug. 10, 2020). 

6 Id. 

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the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, including 154 drugstores in 

Maryland, 14 drugstores in Washington, D.C., and 204 drugstores in Virginia.7

21. In September 2017, Walgreens announced that it had secured regulatory clearance 

to purchase 1,932 Rite Aid pharmacy stores “located primarily in the Northeast and Southern U.S.” 

for approximately $4.2 billion.8 By March 27, 2018, Rite Aid completed the transfer of all 1,932 

stores to Walgreens,9 and Walgreens now publicly identifies those locations as “Walgreens-owned 

Rite Aid stores.”10 

22. In fiscal year 2019, Walgreens’ U.S. retail pharmacies filled 843.7 million 

prescriptions (including immunizations). In fiscal year 2019, Walgreens’ U.S. retail pharmacy 

sales revenue exceeded $104.5 billion.11 

7 Id. at 3; see also “Store Count by State,” WALGREENS (Aug. 31, 2020), available at

https://news.walgreens.com/fact-sheets/store-count-by-state.htm (accessed Feb. 2, 2020). 

8

 WBA 2018 10-K at 72; see also “Walgreens Boots Alliance Secures Regulatory Clearance for Purchase 

of Stores and Related Assets from Rite Aid,” WALGREENS BOOTS ALLIANCE, INC. (Sept. 17, 2017), 

available at https://www.walgreensbootsalliance.com/news-media/press-releases/2017/walgreens-bootsalliance-secures-regulatory-clearance-purchase (accessed Aug. 10, 2020). 

9

 “Rite Aid Completes Transfer of Stores to Walgreens Boots Alliance and Terminates Tax Benefits 

Preservation Plan,” RITE AID CORP. (Mar. 28, 2018), available at 

https://www.riteaid.com/corporate/news/-/pressreleases/news-room/2018/rite-aid-completes-transfer-ofstores-to-walgreens-boots-alliance-and-terminates-tax-benefits-preservation-plan (accessed Aug. 10, 

2020). 

10 See “Welcome Rite Aid Pharmacy Patients,” WALGREENS, available at 

https://www.walgreens.com/topic/pharmacy/welcome_rite_aid.jsp (accessed Aug. 10, 2020). 

11 Form 10-K for Fiscal Year ending 08/31/2019, WALGREENS BOOTS ALLIANCE, INC. (Oct. 28, 2019) 

(“WBA 2019 10-K”), at 4, available at

https://www.sec.gov/Archives/edgar/data/1618921/000161892119000069/wba-2019831x10k.htm

(accessed Aug. 10, 2020). 

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23. Walgreens refers to itself as “the largest retail pharmacy, health and daily living 

destination across the United States and Europe.”12 Approximately 78 percent of the U.S. 

population lives within five miles of a Walgreens retail pharmacy location.13 

24. At all relevant times, Walgreens is and has been a network pharmacy for Plaintiffs, 

meaning that Plaintiffs’ Members can use their prescription drug benefit to fill their prescriptions 

at Walgreens pharmacy locations at in-network pricing. When a Walgreens pharmacy dispenses 

a prescription to a Member, Walgreens causes an electronic claim for reimbursement to be sent to 

Plaintiffs’ PBM, which then submits a claim for payment to Plaintiffs. During the relevant time 

period, Plaintiffs have paid Walgreens through PBMs. 

25. Walgreens is a defendant in six related actions pending in this Court. On March 

23, 2017, a putative nationwide class of third-party payors and insured consumers filed a complaint 

in Forth, et al. v. Walgreen Co. and Walgreens Boots Alliance, Inc., Civ. No. 17-cv-02246, ECF 

No. 1 (N.D. Ill.) (Lee, J.). The allegations in the Forth complaint share a similar factual and legal 

nexus to Plaintiffs’ allegations here; for example, that Walgreens “used its PSC [Program] as a 

mechanism to knowingly and intentionally overcharge consumers and third-party payors . . . in 

excess of Walgreens’ actual U&C prices” for drugs discounted by Walgreens’ retail drug 

programs. Id. ¶ 6. On March 18, 2020, a complaint was filed in BCBSM, Inc. (d/b/a Blue Cross 

and Blue Shield of Minnesota), et al. v. Walgreen Co., et al., Civ. Case No. 1:20-cv-01853, ECF 

No. 1 (N.D. Ill.) (Kendall, J.). On June 5, 2020, a complaint was filed in Horizon Healthcare 

Services, Inc. (d/b/a Horizon Blue Cross Blue Shield of New Jersey), et al. v. Walgreen Co., et al., 

Civ. Case No. 1:20-cv-03332, ECF No. 1 (N.D. Ill.), (Kendall, J.). On June 15, 2020, an amended 

12 Id. at 1. 

13 Id. at 4. 

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complaint was filed in HealthNow New York Inc., et al. v. Walgreen Co., et al., Civ. Case No. 

1:20-cv-1929, ECF No. 33 (N.D. Ill.), (Kendall, J.). On August 12, 2020, a complaint was filed 

in Blue Cross and Blue Shield of Arizona, Inc. (d/b/a Blue Cross Blue Shield of Arizona and d/b/a 

AZBlue) v. Walgreen Co., et al., Civ. Case No. 1:20-cv-04738, ECF No. 1 (N.D. Ill.). On August 

21, a complaint was filed in Asuris Northwest Health et al. v. Walgreen Co. et al., Civ. Case No. 

1:20-cv-04940, ECF No. 1 (N.D. Ill.). On January 28, 2021, the Plaintiffs in the BCBSM, Horizon,

HealthNow, Blue Cross and Blue Shield of Arizona, and Asuris Northwest Health et al. actions 

filed a consolidated First Amended Complaint. The allegations in the First Amended Complaint 

shares a similar factual and legal nexus to Plaintiffs’ allegations here, including, inter alia, 

Defendants’ fraudulent misrepresentation of the usual and customary prices of prescription drugs 

dispensed by Defendants’ pharmacies. 

III. JURISDICTION AND VENUE 

A. Jurisdiction 

26. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because 

Plaintiffs’ claims arise under federal law and under 18 U.S.C. § 1964(c) because this action alleges 

violations of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1962 et seq. 

This Court also has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1367 because 

Plaintiffs are citizens of Maryland and Washington, D.C.; the Defendants are citizens of Delaware 

and Illinois; and the amount in controversy exceeds $75,000. 

27. This Court has general personal jurisdiction over Defendants because Defendants 

maintain their principal places of business at 108 Wilmot Road and 200 Wilmot Road, both in 

Deerfield, Illinois, which is located within the Northern District of Illinois. 

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B. Venue 

28. Venue is proper in the United States District Court for the Northern District of 

Illinois (Eastern Division) pursuant to 28 U.S.C. §§1391(b-d) because, inter alia, both Defendants 

reside in, and are subject to personal jurisdiction in, this District at the time Plaintiffs commenced 

this action and because Defendants’ contacts within this District are significant and sufficient to 

subject them to personal jurisdiction. Further, venue is appropriate in this District because a 

substantial part of the events or omissions giving rise to Plaintiffs’ claims occurred in this District. 

IV. FACTS APPLICABLE TO ALL CLAIMS 

A. U&C Is The Price Paid By Customers Without Insurance. 

29. U&C is the price customers without insurance pay a given pharmacy for 

prescription drugs, i.e., the cash or uninsured price. Per the “lesser of” reimbursement formulation, 

it also serves as a ceiling to how much a pharmacy can charge a health plan (like Plaintiffs) for the 

drug. 

30. Industry organizations endorse this definition. The Academy of Managed Care 

Pharmacy (“AMCP”)14 Guide to Pharmaceutical Payment Methods (October 2007) defines U&C 

as “the price for a given drug or service that a pharmacy or other provider would charge a cashpaying customer without the benefit of insurance provided through a payer or intermediary with a 

contract with the provider.” The NCPDP standards define the U&C price as the “[a]mount charged 

cash paying customers for the prescription exclusive of sales tax or other amounts claimed.”15 The 

U&C price, the NCPDP standards explain, “represents the value that a pharmacist is willing to 

14 AMCP is an industry-wide organization whose membership includes both health systems and PBMs. 

15 See NCPDP Reference Manual, Ch. 3 at 72 (rev. Oct. 2005), available at

https://www.cms.gov/Medicare/Billing/ElectronicBillingEDITrans/downloads/NCPDPflatfile.pdf

(accessed Aug. 10, 2020). 

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accept as their total reimbursement for dispensing the product/service to a cash-paying 

customer.”16 

31. For over a decade, federal health programs have consistently required the cash 

prices offered by pharmacy discount programs to be reported as a pharmacy’s U&C prices. These 

government rules, regulations, and guidance include:

a. CMS Guidance to Medicare Part D Sponsors. CMS published a memo 

in 2006 that explained: “Wal-Mart recently introduced a program offering a reduced price 

for certain generics to its customers. The low Wal-Mart price on these specific generic 

drugs is considered Wal-Mart’s ‘usual and customary’ price, and is not considered a onetime ‘lower cash’ price. Part D sponsors consider this lower amount to be ‘usual and 

customary’ and will reimburse Wal-Mart on the basis of this price.”17 

b. Medicare Part D Regulations. U&C price is defined as “the price that an 

out-of-network pharmacy or a physician’s office charges a customer who does not have 

any form of prescription drug coverage for a covered Part D drug.”18 

c. Medicare Prescription Drug Benefit Manual. U&C price is defined as 

“the price that an out-of-network pharmacy or a physician’s office charges a customer 

who does not have any form of prescription drug coverage for a covered Part D drug.”19 

16 See Telecommunications Version 5, NCPDP, at 38 (Feb. 2010), available at

https://ncpdp.org/members/pdf/Version_5_questions_v35.pdf (accessed Mar. 12, 2020). 

17 HPMS Q&A – Lower Cash Price Policy, Memorandum to All Part D Sponsors, Centers for Medicare & 

Medicaid Services, at 1 (Oct. 11, 2006). 

18 42 C.F.R. § 423.100 (emphasis added); see also 42 C.F.R. §423.160 (incorporating NCPDP standards 

into the Medicare Part D program). 

19 See ch. 5, § 10.2, Benefits and Beneficiary Protections (rev. 9/20/2011) (emphasis added). 

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d. TRICARE Pharmacy Manuals. The pharmacy manual for TRICARE, 

the health care program for uniformed service members, retirees, and their families, defines 

U&C price to include “loss leaders, frequent shopper or special customer discounts or 

programs, competitor’s matched price or any and all other discounts, special promotions, 

and programs causing a reduction in the price offered to that Member . . . Additionally, the 

Usual and Customary Retail Price must include any applicable discounts offered to attract 

customers . . . .”20 

e. Federal Employees Health Benefits Plan Pharmacy Manuals. The 

FEHBP pharmacy manual defines U&C as “the lowest price Provider would charge a 

particular patient if such patient were paying cash for an identical prescription on that 

particular day at that particular location. This price must include any applicable discounts 

offered to attract patients.”21 

f. Walgreens PBM—Walgreens Health Initiative. Walgreens Health 

Initiative (“WHI”) was a wholly-owned PBM subsidiary of Walgreen Co. until WHI was 

acquired by Catalyst Health Solutions in 2011. WHI’s Pharmacy Manual defines U&C as 

“the cash price including all applicable discounts, coupons or sale price which a cashpaying customer would pay at the pharmacy.”22 In addition, WHI directed its own network 

pharmacies to use the standard NCPDP form containing the “usual and customary” field 

discussed above. 

20 TRICARE Express Scripts Pharmacy Manual (2013). 

21 FEHBP CVS/Caremark Manual (2009) (emphasis added). 

22 Pharmacy Manual, WALGREENS HEALTH INITIATIVES, INC., 25 (Jan. 2011), available at

http://www.walgreenshealth.com/pdf/forms/Revised_Pharmacy_Manual_2010_Revised_04072010.pdf

(accessed Aug. 10, 2020). 

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32. State Medicaid programs likewise require cash prices offered by pharmacy discount 

programs to be reported as a pharmacy’s U&C prices. See, e.g., Walgreens’ DOJ Settlement. 

33. More specifically, Walgreens knew that the U&C prices for prescription drugs 

dispensed to Plaintiffs’ Members must include prices that Walgreens charged to cash customers 

paying without insurance, including “discount” prices. 

34. At all relevant times, Walgreens knew that Plaintiffs contracted to receive the 

benefit of the prices that Walgreens charged to its customers who paid without insurance, including 

“discount” prices, in their reported U&C prices. 

35. Plaintiffs’ contracts with their PBMs recognized and implemented the NCPDP 

requirements and industry standards for reporting U&C prices. 

36. Furthermore, under a Participating Pharmacy Agreement and Amendments thereto, 

between Prime Therapeutics and Walgreens (“Walgreens Prime PPA”), Walgreens agreed to 

report its U&C charge on all claims submitted to Prime Therapeutics for payment by Plaintiffs, 

who contracted with Prime as their PBM. 

37. The Walgreens Prime PPA required Walgreens to accept as payment the lesser of 

the U&C charge or a negotiated rate. 

38. On information and belief, the Walgreens Prime PPA23 and other contracts between 

Plaintiffs’ PBMs and Walgreens (in place at various times throughout the relevant time period) 

define U&C using the same or similar definition as the Plaintiffs’ PBM agreements, and consistent 

with NCPDP requirements and industry standards. The Walgreens Prime PPA and other PBM 

23 The Walgreens Prime PPA contains a confidentiality provision preventing disclosure without both 

parties’ consent. Prime Therapeutics consented to provide the Walgreens Prime PPA, and at Plaintiffs’ 

request, Prime Therapeutics sought Walgreens’ consent to provide the Walgreens Prime PPA to Plaintiffs. 

Walgreens, however, refused to consent. 

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contracts require Walgreens to submit claims electronically or in writing using the industry 

standard NCPDP Universal Claims Form. 

39. Additionally, the Prime Therapeutics Pharmacy Provider Manual instructs 

Walgreens to submit, as its U&C charge, “the lowest price [Walgreens] would charge to a 

particular customer if such customer were paying cash for the identical Prescription Drug Services 

on the date dispensed. This includes any applicable discounts including, but not limited to, senior 

discounts, frequent shopper discounts and other special discounts offered to attract customers.”24

40. The current OptumRx Pharmacy Provider Manual,25 which “includes the policies 

and procedures for pharmacies . . . which serve Members pursuant to [OptumRx’s] participating 

pharmacy provider network agreements,” contains this U&C guidance: 

Usual and Customary (U&C): 

Price charged by Network Pharmacy Provider to the general public at the time of 

dispensing for the same Drug Product including all applicable customer discounts, 

such as advertised or sale prices, special customer, senior citizen, frequent shopper, 

coupons or other discounts, a cash paying customer pays Network Pharmacy 

Provider for Drug Products, devices, products and/or supplies. Network Pharmacy 

Provider must supply proof of a cash Prescription (i.e. without any disclosure of 

PHI) when necessary to evaluate the appropriate adjudication of the Transaction. 

Alteration of the U&C price to attempt to increase Claim payment without a true 

change to the cash price being offered to the general public will be considered noncompliance and a violation of the Agreement. The Network Pharmacy Provider 

must be able to communicate the U&C price to Administrator upon inquiry, failure 

to disclose this information may be considered noncompliance. 

24 Pharmacy Provider Manual, PRIME THERAPEUTICS LLC, § 6, at 30 (Mar. 1, 2015) (emphasis added), 

available at

https://www.primetherapeutics.com/content/dam/corporate/Documents/Resources/Pharmacists/Pharmacy

ProviderResources/ProviderManual/March12015PharmacyProviderManualEffectiveMarch12015.pdf. 

 

25 2020 Pharmacy Provider Manual, OPTUMRX, available at https://learn.optumrx.com/content/dam/orxrxmicros/pharmacy-manual/OptumRxPharmacyProviderManual2020-Version%203.1.pdf (last accessed 

July 31, 2020). 

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41. The Catamaran Provider Manual published in 2013 told Cataraman’s pharmacy 

providers, including Walgreens, that U&C meant “the usual and customary price charged by the 

Provider to the general public at the time of dispensing, including any advertised or sale prices, 

discounts, coupons or other deductions.”26

42. Further, at the outset of Walgreens’ fraudulent scheme, its own Illinois-based 

subsidiary created and issued statements confirming – falsely – that discounted pricing would be 

treated as U&C. Walgreens’ wholly-owned PBM subsidiary until 2011, WHI, defined U&C 

consistent with NCPDP requirements and industry standards. WHI’s Pharmacy Manual defined 

U&C as “the cash price including all applicable discounts, coupons or sale price which a cashpaying customer would pay at the pharmacy.”27 In addition, WHI directed its own network 

pharmacies to use the standard NCPDP form containing the “usual and customary” field discussed 

above. WHI was based in and operated out of Illinois. 

43. These provisions all recognize and implement the NCPDP requirements and 

industry standards, which required Walgreens to report, as the U&C charge, any discount price 

offered to cash-paying or “private pay” uninsured customers on all claims submitted to Plaintiffs 

through their PBMs and to accept payment of that discount price as payment in full. 

44. In short, Walgreens was well aware of both the definition of “usual and customary” 

and how the “usual and customary” price of a particular prescription drug should be calculated. 

But Walgreens knowingly and intentionally submitted inflated U&C prices for brand and generic 

26 Provider Manual, CATAMARAN (2013), available at https://silo.tips/download/provider-manual-2013-4

(last accessed July 31, 2020). 

27 Pharmacy Manual, WALGREENS HEALTH INITIATIVES, INC., 25 (Jan. 2011), available at 

http://www.walgreenshealth.com/pdf/forms/Revised_Pharmacy_Manual_2010_Revised_04072010.pdf 

(accessed Aug. 10, 2020). 

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drugs purchased by Plaintiffs’ Members in a way that was antithetical to applicable law, 

requirements, and standards. 

45. At all relevant times, Walgreens knew that Plaintiffs contracted to receive the 

benefit of the prices that Walgreens charged to its customers who paid without insurance, including 

“discount” prices, in their reported U&C prices. Since 2014, CFMI, GHMSI, and CareFirst 

BlueChoice’s commercial contracts with CaremarkPCS Health have defined “usual and 

customary” prices as “the lowest price, including any Dispensing Fee, a pharmacy would charge 

a particular customer without any insurance coverage if such customer were paying cash for the 

identical Program Drug on the date Dispensed. This includes any applicable discounts, including 

but not limited to senior discounts, frequent shopper discounts, and other special discounts offered 

to customers.”28

B. The Pharmacy Claims Reimbursement Process. 

46. As a general matter, third-party payors, including private and government payors, 

reimburse pharmacies for the insured portion of prescription drugs at the lesser of a negotiated 

price (as reflected in the pricing terms of a governing agreement) and the subject pharmacy’s U&C 

price for both brand and generic prescription drugs. 

47. NCPDP establishes and maintains the industry standard for electronic transmission 

and adjudication of pharmacy claims. The NCPDP’s standard form contains a specific data field, 

designated as field 426-DQ, in which Walgreens represents its U&C charge for that prescription 

drug. 

28 Commercial Pharmacy Benefit Services Agreement between CareFirst and CaremarkPCS Health, LLC, 

Sch. A ¶ 158 (Jan. 1, 2014); Amended and Restated Commercial Pharmacy Benefit Services Agreement 

between CareFirst and CaremarkPCS Health, LLC, Sch. A ¶ 167 (Jan. 1, 2017); Pharmacy Benefit Services 

Agreement between CareFirst and CaremarkPCS Health, LLC, Sch. A ¶ 180 (Jan. 1. 2019).

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48. NCPDP defines the U&C price transmitted in the 426-DQ data field as the 

“[a]mount charged cash paying customers for the prescription exclusive of sales tax or other 

amounts claimed.”29 The U&C price that Walgreens enters into field 426-DQ on a payment claim, 

the NCPDP standards explain, must represent “the value that a pharmacist is willing to accept as 

their total reimbursement for dispensing the product/service to a cash-paying customer.”30 

49. Congress has adopted the NCPDP standards through federal legislation, including 

the Health Insurance Portability and Accountability Act (“HIPAA”), the Medicare Modernization 

Act (“MMA”), and the Health Information Technology for Economic and Clinical Health Act 

(“HITECH”). HIPAA, for example, requires uniform methods and codes for exchanging 

electronic information with health insurance plans. These standards are referred to as the NCPDP 

Telecommunication Standard. Pharmacies must report claims using NCPDP standards, inter alia, 

when prescribing drugs under Medicare Part D.31 

50. Whenever Walgreens fills a Member’s prescription, Walgreens submits its claim 

for Plaintiffs’ reimbursement on a standardized NCPDP electronic claim form. 

51. In the retail pharmacy industry, health plans and other third-party payors often use 

PBMs to adjudicate and administer prescription benefits with a network of pharmacies on their 

behalf. When a health plan employs the services of a PBM, instead of submitting claims directly 

to the health plan, the retail pharmacy submits claims for payment from the health plan to the 

29 See NCPDP Reference Manual, Ch. 3 at 72 (rev. Oct. 2005), available at

https://www.cms.gov/Medicare/Billing/ElectronicBillingEDITrans/downloads/NCPDPflatfile.pdf

(accessed Aug. 10, 2020). 

30 See Telecommunications Version 5, NCPDP, 38 (Feb. 2010), available at

https://ncpdp.org/members/pdf/Version_5_questions_v35.pdf (accessed Mar. 12, 2020). 

31 42 C.F.R. § 423.160. 

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health plan’s chosen PBM. PBMs directly pass on Walgreens’ reported U&C prices to Plaintiffs 

as a basis for payment. 

52. Walgreens submits its claims seeking Plaintiffs’ reimbursement payments to the 

PBMs that process Plaintiffs’ reimbursement claims. Since 2006, Plaintiffs have paid Walgreens 

through various PBMs, including Express Scripts and CVS/Caremark. 

53. The claims-processing and payment mechanics between Plaintiffs, Plaintiffs’ 

various PBMs, and Walgreens work as follows: 

a. A Member presents a prescription at a Walgreens pharmacy (or Walgreensaffiliated banner location) and purchases the corresponding prescription drug, less the share 

of the purchase price covered by the Member’s prescription drug benefit. 

b. Walgreens then reports to Plaintiff’s PBM the data associated with the sale, 

including the U&C charge for the drug it dispensed to the Member, which Walgreens 

reports in NCPDP field 426-DQ. 

c. Using Walgreens’ reported information, Plaintiff’s PBM adjudicates the 

claim on Plaintiff’s behalf using the “lesser of” logic that incorporates the reported U&C 

price term.32 If Walgreens’ reported U&C price for the drug at issue is greater than the 

parties’ other negotiated prices, Plaintiff pays, through its PBM, the negotiated price to 

Walgreens. If, on the other hand, Walgreens’ reported U&C price for the drug at issue is 

less than the parties’ other negotiated prices, then Plaintiff pays, through its PBM, the 

reported U&C price to Walgreens. 

32 As described above, third-party payors reimburse pharmacies for the insured portion of prescription drugs 

at the lesser of a negotiated price (as reflected in the pricing terms of a governing agreement) or the subject 

pharmacy’s U&C charge for prescription drugs. 

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d. As part of the claims adjudication process, Plaintiff’s PBM transmits to 

Plaintiffs the numerous fields of claims data in the prescribed NCPDP format, including 

field 426-DQ, which indicates the U&C charges Walgreens reported for the drug at issue. 

54. At all relevant times, for each and every claim submitted by Walgreens to one of 

Plaintiffs’ PBMs, Walgreens knew that the PBM at issue in turn either transmits Walgreens’ 

reported U&C price (as represented in NCPDP field 426-DQ) to Plaintiffs, uses the reported U&C 

price when calculating a reimbursement amount per the contractual “lesser of” reimbursement 

formula, or both. 

55. At all relevant times, Walgreens knew that Plaintiffs directly relied upon 

Walgreens’ reported U&C prices in reimbursing Walgreens through their PBMs, as described 

above for prescription claims submitted by Walgreens to Plaintiffs via Plaintiffs’ PBMs. 

56. At all relevant times, Walgreens knew that the electronic claims adjudication 

process used the NCPDP field 426-DQ data as a necessary input. Walgreens also knew that 

Plaintiffs’ PBMs and Plaintiffs relied on the NCPDP field 426-DQ data as necessary business 

information in calculating and paying Members’ prescription reimbursements on both brand and 

generic claims submitted by Walgreens. 

C. Walgreens Developed its Prescription Savings Club to Compete with “Big 

Box” Retailers While Maintaining Fraudulently Inflated Reimbursements 

from Plaintiffs. 

57. In 2006, “big box” retailers like Walmart began to launch prescription drug 

programs that offered steeply discounted prices for hundreds of popular prescription drugs to cash 

customers. For example, in September 2006, Walmart began offering $4 for 30-day supplies and 

$10 for 90-day supplies of the most commonly prescribed generic drugs. Walmart’s formulary of 

low-priced generics initially included approximately 140 drugs (totaling more than 300 

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formulations). Walmart’s competitors, including Target and Costco, responded with similar 

prescription discount programs. Many retailers whose primary line of business was not operating 

a pharmacy, which were able to absorb lower margins on generic drug sales because pharmacy 

sales represent such a low percentage of total sales, followed suit. Walmart, Target, and Costco 

submit their discounted prices as their U&C prices to third-party payors, including Plaintiffs. 

58. Walgreens executives labeled these competitor programs as “limited promotions” 

that provided “no significant savings for the vast majority” of cash customers, concluding that 

programs like Walmart’s generics program were “not positive for healthcare.”33 

59. Walgreens was unwilling to price match Walmart and other “big box” retailers on 

generic drug prices. In response to those competitor programs, however, Walgreens launched its 

PSC Program in 2007 to target cash customers and other price-sensitive customers. By 2008, 

Walgreens offered PSC Program prices at all of its U.S. retail pharmacy locations.34 

60. But unlike the “big box” retailers, Walgreens did not submit its discount prices as 

U&C. Instead, it submitted prices that were often substantially higher than the discount prices as 

the U&C. 

61. Initially, Walgreens’ PSC Program offered between 300 and 400 generic 

medications at $12.99 for a 90-day supply. For those medications, Walgreens advertised a 

discount price list with some basic information about the eligible medications (e.g., the drug name, 

strength, and quantity). 

33 See Jeffrey A. Rein, Walgreens President & CEO, “Letter to Shareholders,” 2006 Annual Report, 

WALGREEN CO., at 4. 

34 Walgreens’ DOJ Settlement at ¶ 2(a). 

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62. Walgreens’ price lists provided limited information that was insufficient to identify 

specific drugs eligible for discounted PSC Program prices. For example, Walgreens did not 

provide the National Drug Code (“NDC”), a 10-digit universal product identifier for prescription 

drugs dispensed in the United States. As a specific illustration of this, the Walgreens PSC Program 

price list advertised 90 tabs of Lisinopril 10mg for $12.99.35 According to the U.S. Food & Drug 

Administration’s NDC Directory, there are at least 24 different products sold by at least 15 

different companies that meet this description.36 Nor did Walgreens provide other industrystandard drug identifiers on its PSC Program price list, like the Generic Product Identifier (“GPI”), 

Generic Sequence Number (“GSN”), or Generic Code Number (“GCN”). 

63. The PSC Program was not limited to so-called “value-priced generics” listed on 

advertised formularies. In addition to these steeply discounted “value-priced” drugs, the PSC 

Program offered discounted prices on approximately 5,000 to 8,000 other brand and generic 

prescription drugs to Walgreens’ cash-paying customers. Walgreens did not advertise lists or 

pricing information for the “other name brand and generic prescription medications” eligible for 

PSC Program prices. Further, Walgreens did not provide lists of the “other name brand and generic 

prescription medications” eligible for PSC Program prices to Plaintiffs or, on information and 

belief, to any of the PBMs that processed Plaintiffs’ reimbursement claims. 

35 “Walgreens Prescription Savings Club” (Dec. 13, 2007) (attached hereto as Exhibit 1). 

36 The NDCs include: 53217-303-90, 52427-440-90, 43353-113-60, 50090-1737-5, 71335-0536-4, 70934-

200-90, 55700-479-90, 55700-513-90, 49999-182-90, 68180-980-09, 68180-514-09, 63739-349-43, 0006-

0106-54, 66267-577-90, 68788-8912-9, 68788-6407-9, 68788-9823-9, 68788-6782-9, 68788-9912-9, 

63187-098-90, 63187-821-90, 70518-0530-3, and 50436-0353-3. The manufacturers include: Aidarex 

Pharmaceuticals LLC; Almatica Pharma Inc.; Aphena Pharma Solutions - Tennessee, LLC; A-S Medication 

Solutions; Bryant Ranch Prepack; Denton Pharma, Inc. DBA Northwind Pharmaceuticals; Lake Erie 

Medical DBA Quality Care Products LLC; Lupin Pharmaceuticals, Inc.; McKesson Corporation; Merck 

Sharp & Dohme Corp.; NuCare Pharmaceuticals, Inc.; Preferred Pharmaceuticals Inc.; Proficient Rx LP; 

REMEDYREPACK INC.; and Unit Dose Services. 

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64. Walgreens claimed that these discount prices were only available to cash-paying 

customers who paid an enrollment fee. But Walgreens’ statements to that effect were illusory and 

intentionally misleading. Contrary to Walgreens’ assertions that the PSC was a fee-based 

membership program, the “enrollment fee” (which was nominal at best) was a sham. In its recent 

settlement with the U.S. Department of Justice, for example, Walgreens admitted that it regularly 

returned “enrollment fees” to its PSC Program enrollees through, e.g., store credits.37 

65. But whether Walgreens charged a nominal enrollment fee in certain instances does 

not alter the fact that—unbeknownst to Plaintiffs—Walgreens offered the PSC to anyone who 

wanted to join and made its discounted drug prices under the PSC widely and consistently available 

to the general public, and thus they cannot be excluded from Walgreens’ U&C price. Significantly, 

in United States ex rel. Garbe v. Kmart Corp., the Seventh Circuit stated that “[a]llowing Kmart 

to insulate high ‘usual and customary’ prices by artificially dividing its customer base would 

undermine a central purpose of the statutory and regulatory structure. The ‘usual and customary’ 

price requirement should not be frustrated by so flimsy a device as Kmart’s ‘discount 

programs.’ Because Kmart offered the terms of its ‘discount programs’ to the general public and 

made them the lowest prices for which its drugs were widely and consistently available, the Kmart 

‘discount’ prices at issue represented the ‘usual and customary’ charges for the drugs.” 824 F.3d 

632, 645 (7th Cir. 2016), cert. denied, 137 S.Ct. 627 (Jan. 9, 2017). 

66. The drugs discounted by the PSC Program were not static. Walgreens regularly 

revised the brand and generic drugs eligible for PSC Program discounts, the price points at which 

the drugs were eligible, and the quantum of discounts offered on those drugs. When it revised its 

37 Walgreens’ DOJ Settlement ¶ 2(b). 

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PSC Program drug lists, Walgreens did not provide notice to Plaintiffs or, on information and 

belief, to any of the PBMs that processed Plaintiffs’ reimbursement claims. 

67. Walgreens’ PSC Program continues today. In its current form, which was launched 

on or about May 1, 2012, Walgreens’ PSC Program allows cash-paying customers to purchase 

hundreds of prescription drugs on its formulary list for $5.00, $10.00, or $15.00 for 30-day supplies 

and $10.00, $20.00, and $30.00 for 90-day supplies. The discount price depends on Walgreens’ 

“tier” classification of the particular drug. Many of the drugs discounted on the formulary are 

among the most widely-prescribed drugs in the United States. Walgreens has also represented that 

even for brand and generic drugs not listed on this formulary, Walgreens offers reduced PSC 

Program pricing in other denominations to cash-paying customers. 

68. Moreover, Walgreens continues to “offer” a similar “Rx savings program”—the 

JustRx Program—to customers who pay without using insurance at more than 1,900 Walgreensowned Rite Aid stores,38 as well as Walgreens- and Duane Reade-branded Walgreens 

pharmacies.39 The JustRx Program is “simple and free; there is no annual or up-front membership 

fee to participate.”40 Like the PSC Program, the JustRx Program provides cash-paying customers 

with discounts on “all” prescription drugs (and not just those listed on program formularies), with 

38 See “Welcome Rite Aid Pharmacy Patients,” (“Walgreens is pleased to offer existing Rite Aid patients a 

new Rx savings program called ‘JustRx.’ JustRx is simple and free; there is no annual or up-front 

membership fee to participate. JustRx offers eligible patients cost savings on over 300 commonly 

prescribed generic medications, prices starting at $9.99 for a 30 day supply. It also includes an average of 

40% savings on value priced brand drugs that were not previously available.”). 

39 “Value Priced Generics,” JUSTRX (“Value-Priced Generics . . . [a]vailable at Walgreens, Duane Reade 

and Rite Aid Pharmacies Operated by Walgreens.”), available at https://justrx.com/generics (accessed Mar. 

10, 2020). 

40 Id. 

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significant discounts available on drugs listed on advertised “value-priced medication” 

formularies.41

D. Walgreens Reported False U&C Charges. 

69. Instead of submitting its discounted PSC Program prices, JustRx Program prices, 

third-party discount card program prices, or other discounted cash prices as U&C, Walgreens 

inflated the U&C prices that it reported to Plaintiffs and their PBMs by pegging Walgreens’ 

reported U&C prices to higher prices that did not reflect the cash prices offered to PSC Program 

enrollees, JustRx Program participants, third-party discount program cardholders, or other 

discounted prices. 

70. There is no dispute that Walgreens did not in fact report its PSC Program prices, 

JustRx Program prices, third-party discount card program prices, or other discounted prices for 

prescription drugs made available to those paying without insurance as its U&C price. For 

example, with respect to PSC Program prices specifically, Walgreens “admit[ted], 

acknowledge[d], and accept[ed] responsibility for” failing to do so in its January 2019 settlement 

stipulation with the U.S. Department of Justice, stating that “Walgreens did not identify its PSC 

program prices as its U&C prices for the drugs on the PSC formulary” on Medicaid fee-for-service 

claims.42 

71. For many millions of transactions, Walgreens caused Plaintiffs to pay Walgreens 

the negotiated price because the negotiated price was lower than the reported inflated U&C price. 

For those many millions of transactions, Walgreens should have reported the true U&C price (i.e., 

the lowest prices for which its drugs were widely and consistently available). Had it done so, the 

41 “Frequently Asked Questions,” JUSTRX, available at https://justrx.com/faq (accessed Aug. 10, 2020). 

42 Walgreens’ DOJ Settlement at ¶ 2. 

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adjudicated price—ultimately the price paid by Plaintiffs for the claim—would have, in many 

cases, been lower than what Plaintiffs paid based on Walgreens reporting a false and inflated U&C 

price. 

72. How Walgreens overcharged Plaintiffs on millions of claims is exemplified by the 

examples of apparent overcharges detailed in the attached Exhibit 2 to this Complaint.43

73. Walgreens’ false and misleading U&C reporting caused Plaintiffs to significantly 

overpay Walgreens on many millions of Walgreens claims for brand and generic drugs. 

74. Walgreens’ fraudulent scheme took place primarily and substantially in Illinois. 

Walgreens has administered, and continues to administer, its PSC Program from Walgreens’ 

corporate headquarters in Deerfield, Illinois, where Walgreens developed the PSC Program. The 

PSC Program’s Terms & Conditions state that the “PSC is administered by WAGDCO, LLC, a 

wholly-owned subsidiary of Walgreen Co.,” whose offices are located at 104 Wilmot Road in 

Deerfield, Illinois. Publicly-available state and federal regulatory and court filings made by 

Walgreens indicate that WAGDCO has administered the PSC Program since at least 2015, and in 

so doing has had full responsibility for obtaining and holding the licenses required to operate the 

PSC in various states, setting and reporting to state regulatory bodies the discount amounts 

provided through the PSC, negotiating and maintaining PPAs with local pharmacies offering the 

PSC Program, and securing the discount rates offered through the PSC. These filings also indicate 

that WAGDCO’s own day-to-day operations are subcontracted to another of Walgreens’ wholly43 These exemplar overcharges are based on assumptions Plaintiffs have made as a result of the limited 

information available to them regarding Walgreens PSC Program and will be confirmed through review 

and analysis of Walgreens’ cash transaction data. As described above in, inter alia, paragraph 67, the PSC 

Program’s advertised price lists did not provide all of the information that Plaintiffs need to identify specific 

drugs eligible for discounted PSC Program prices. Chiefly, the PSC Program price lists omitted NDCs, 

GPIs, GCNs, GSNs, and other industry-standard drug identifiers, which are necessary to determine whether 

an overcharge has indeed occurred. 

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owned subsidiaries headquartered in Illinois, Walgreens Business Services, LLC, which manages 

the PSC Program’s member enrollment, fee collection, advertising and marketing, discount 

adjudication process, and maintenance of the PSC Program’s participating provider network. 

Since at least 2008, Walgreen Co.’s Illinois-based investor relations division has recognized the 

success of these Illinois-based subsidiaries and the PSC Program as its own, reporting in multiple 

Deerfield, Illinois press releases that Walgreen Co.’s financial well-being was buoyed by the PSC 

Program. These public statements omitted disclosures that the PSC pricing discounts were not 

being provided to health plans, including Plaintiffs, as U&C. 

75. Walgreens admitted in a U&C fraud settlement with the Department of Justice that 

“[i]n submitting claims for reimbursement” Walgreens “did not identify its PSC program prices as 

its U&C prices for the drugs on the PSC program formulary, which resulted in the States paying 

more in reimbursement than they would have paid if WALGREENS had identified its PSC 

program prices.” The remedial actions required of Walgreens by the U.S. Government reflect the 

senior level involvement of Walgreens’ Illinois-based management. The Corporate Integrity 

Agreement that Walgreens was required to execute with the U.S. Department of Health and Human 

Services requires certifications from “the Senior Vice President, Pharmacy; Senior Vice President, 

Pharmacy and Retail Operations; Senior Vice President, Operations; Senior Vice President, Chief 

Financial Officer Retail Pharmacy; and Senior Vice President, Chief Human Resources Officer,” 

(all located in Illinois); the appointment of a Compliance and Ethics Officer (also located in 

Illinois); and periodic reports to the Audit Committee of the Board of Directors of Walgreens 

Boots Alliance, Inc. (located in Illinois). 

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IV. Defendants’ Violations of the RICO Act. 

A. RICO 

76. In 1970, Congress enacted RICO to combat the influence of organized crime on 

interstate commerce. “But Congress for cogent reasons chose to enact a more general statute, one 

which, although it had organized crime as its focus, was not limited in application to organized 

crime.” H.J. Inc v. Nw. Bell Telephone Co., 492 U.S. 229, 248 (1989). Thus, a plaintiff may allege 

RICO claims against any defendant businesses and individuals that engage “in a pattern of criminal 

acts” absent “an allegation and proof of an organized crime nexus.” Id. at 249. 

77. Congress expressly stated that RICO is to “be liberally construed to effectuate its 

remedial purposes.” Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 498 (1985) (quoting Pub. 

L. No. 91–452, § 904(a), 84 Stat. 947). 

78. Congress included a “civil cause of action” under RICO for a plaintiff to recover 

damages from a defendant who injured the plaintiff’s business or property by violating the statute. 

RJR Nabisco Inc. v. European Cmty., 579 U.S. 325, 329 (2016) (citing 18 U.S.C. § 1964(c)); see 

also 18 U.S.C. § 1961(a) (defining “racketeering activity”). 

79. Plaintiffs successfully have brought civil RICO claims against defendants in a 

variety of circumstances outside of organized crime and beyond traditional mob-related activities 

like murder, kidnapping, gambling, arson, robbery, bribery, and extortion. 

B. The Cash Discount Enterprise. 

80. Under 18 U.S.C. § 1961(4), a RICO “enterprise” may be an association-in-fact that, 

although it has no formal legal structure, has (i) a common purpose, (ii) relationships among those 

associated with the enterprise, and (iii) longevity sufficient to pursue the enterprise’s purpose. 

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81. Defendants formed just such an association-in-fact enterprise— sometimes referred 

to in this complaint as the Cash Discount Enterprise. As it pertains to Plaintiffs, the Cash Discount 

Enterprise consists of (a) Walgreens Co., including its employees and agents; (b) the Walgreens 

Boots Alliance, Inc. including its employees and agents; (c) WHI, Walgreen Co.’s wholly-owned 

subsidiary PBM, including its agents and employees; and (d) the PBM Caremark, L.L.C, including 

its employees and agents. 

82. The Cash Discount Enterprise is an ongoing and continuing business organization 

consisting of “persons” within the meaning of 18 U.S.C. § 1961(3) that created and maintained 

systematic links for a common purpose: to ensure that Walgreens could report inflated U&C prices 

to Plaintiffs and their members without its fraud being detected. 

83. To accomplish this purpose, the Cash Discount Enterprise periodically and 

systematically inflated Walgreens’ U&C prices and represented—either affirmatively or through 

half- truths and omissions—to health plans, including Plaintiffs and their members, that 

Walgreens’ U&C prices were “the amount charged cash customers for the prescription exclusive 

of sales tax or other amounts charged.” The Enterprise concealed from health plans, like Plaintiffs, 

that the cash discount prices were not reported as Walgreens’ U&C price. This scheme translated 

into higher sales (and therefore profits) for Walgreens and larger profits for PBMs, such as WHI, 

as an administrator of Walgreens’ program, and Caremark, the PBM that has administered 

prescription drug insurance benefits for the CareFirst Plaintifffs since 2014. 

84. The persons engaged in the Cash Discount Enterprise are systematically linked 

through contractual relationships, financial ties, and continuing coordination of activities, as 

spearheaded by Walgreens. There is regular communication between Walgreens, Caremark, and 

other PBMs, in which information is shared. Typically, this communication occurred, and 

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continues to occur, through the use of the wires and the mail in which Walgreens and Caremark 

share information regarding various cash discount programs, the structure of those programs, and 

whether they are reporting those prices as U&C prices. Walgreens and Caremark functioned as a 

continuing unit for the purposes of implementing the cash discount scheme and, as set forth above, 

when issues arose during the scheme, each agreed to take actions to hide the scheme and continue 

its existence. 

85. At all relevant times, Caremark was aware of Walgreens’ conduct, was a knowing 

and willing participant in that conduct, and reaped profits from that conduct. Caremark concealed 

Walgreens’ true U&C prices and adopted policies that allowed Walgreens to submit a fraudulent 

U&C price. Caremark represented to its clients that it was acting to save them (including Plaintiffs 

and their members) money on their prescription needs. But it knew that Walgreens’ conduct was 

inflating the price its clients were paying for generic prescription drugs, because Walgreens’ U&C 

price was falsely inflated. Caremark was also incentivized to tolerate Walgreens’ overpricing, and 

to misrepresent and conceal this misconduct, because Caremark’s related company, CVS 

Pharmacy, also falsely inflated its own U&C prices through conduct similar to Walgreens’—

excluding CVS’s own cash discount prices from its submitted U&C prices. 

86. Caremark also knew, but did not disclose, that WHI, which was administering the 

cash discount programs, likewise would not disclose the fraud. But for the Cash Discount 

Enterprise’s unlawful fraud, Caremark would have had the incentive to disclose the deceit by 

Walgreens. By failing to disclose this information, Caremark perpetuated the Cash Discount 

Enterprise’s scheme, and reaped substantial profits. 

87. During the time that it was administering the cash discount programs, WHI was 

aware of Walgreens’ conduct, was a knowing and willing participant in that conduct, and reaped 

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profits from that conduct. WHI concealed Walgreens’ true U&C prices and adopted policies that 

allowed Walgreens to submit a fraudulent U&C price. WHI knew that Walgreens’ conduct was 

inflating the price health plans were paying for generic prescription prices, because Walgreens’ 

U&C price was falsely inflated. WHI also knew, but did not disclose, that Caremark was also 

allowing Walgreens to engage in this fraud to the detriment of their health plan customers. But for 

the Cash Discount Enterprise’s unlawful fraud, WHI would have had the incentive to disclose the 

deceit by Walgreens. By failing to disclose this information, WHI perpetuated the Cash Discount 

Enterprise’s scheme, and reaped substantial profits. 

88. Furthermore, neither Caremark nor WHI challenged Walgreens’ reported U&C 

prices, terminated their role in the Cash Discount Enterprise, nor disclosed publicly that 

Walgreens’ U&C prices were artificially inflated. 

89. Caremark and WHI participated in the conduct of Walgreens in the Cash Discount 

Enterprise, sharing the common purpose of inflating Walgreens’ U&C prices, through a pattern of 

racketeering activity within the meaning of 18 U.S.C. §§ 1961(1) and (5), which includes multiple 

instances of mail fraud in violation of 18 U.S.C. § 1341, and multiple instances of wire fraud in 

violation of 18 U.S.C. § 1343. Caremark and WHI knowingly made material misstatements to 

Plaintiffs in furtherance of the fraudulent scheme regarding: 

a. Walgreens’ actual U&C prices; 

b. The extent to which Walgreens was reporting its cash discount prices as its 

U&C price; 

c. Whether Walgreens’ practice of failing to report its cash discount prices as 

its U&C price caused health plans to pay more money for generic prescription drugs; and 

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d. Whether and how the PBMs benefited from Walgreens’ practice of failing 

to report its cash discount prices as its U&C price. 

90. Walgreens alone could not have accomplished the purpose of the Cash Discount 

Enterprise without the assistance of Caremark and WHI. For Walgreens to profit from the scheme, 

Caremark and WHI needed to allow Walgreens to report inflated U&C prices. And Caremark and 

WHI did so. They then, through misrepresentations and failures to disclose material information, 

failed to tell Plaintiffs and their members that they were paying higher prices for generic 

prescription drugs, and that Caremark and WHI were benefitting from those higher prices. Without 

these misrepresentations, the Cash Discount Enterprise could not have achieved its common 

purpose. 

91. The Cash Discount Enterprise engaged in and affected interstate commerce 

because, inter alia, it set the price of drugs that were paid for by million of prescription insurance 

customers, including those of Plaintiffs. 

92. The foregoing evidences that Walgreens and WHI were each willing participants 

in the Cash Discount Enterprise, had a common purpose and interest in the object of the scheme, 

and functioned within a structure designed to effectuate the Enterprise’s purpose, i.e., through 

Walgreens’ inflation of its U&C prices, coupled with Caremark and WHI’s failures to disclose 

that inflation and misstatements to Plaintiffs regarding that inflation. 

C. Conduct of the Cash Discount Enterprise. 

93. From 2007 to date, Walgreens exerted control over the Cash Discount Enterprise 

and participated in the operation or management of the affairs of the Cash Discount Enterprise, 

directly or indirectly, in the following ways: 

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a. Walgreens published its U&C prices, which did not include its cash 

discount prices; 

b. Caremark charged their clients U&C prices, which they knew did not 

include Walgreens’ cash discount prices and were therefore inflated; 

c. Caremark and WHI concealed that Walgreens’ U&C price was inflated in 

order to allow themselves to charge health plans that inflated price; and 

d. Walgreens expected and intended that Caremark and WHI would (and did) 

distribute through the U.S. Mail and interstate wire facilities, communications that failed 

to disclose that Walgreens’ U&C prices were artificially inflated. 

94. The scheme had a hierarchical decision-making structure that was headed by 

Walgreens. Walgreens controlled the publication of its U&C price, and stood silent as Caremark 

charged its clients inflated prices for generic prescription prices based on the publication of that 

price and WHI administered the cash discount program such that those inflated prices would be 

submitted to Plaintiffs. 

95. Caremark and WHI also participated in the conduct of the affairs of the Cash 

Discount Enterprise, directly or indirectly, in the following ways: 

a. Caremark and WHI promised to, and did, keep secret that Walgreens was not 

reporting its cash discount prices as its U&C; 

b. Caremark and WHI distributed through the U.S. Mail and interstate wire facilities 

communications which concealed the existence of the Cash Discount Enterprise; 

and 

c. Caremark and WHI concealed the existence of Walgreens’ inflated U&C prices to 

further the fraudulent pricing scheme. 

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96. The scheme devised and implemented by Walgreens, as well as other members of 

the Cash Discount Enterprise, amounted to a common course of conduct intended to (a) allow 

Walgreens to charge inflated prices for generic prescription drugs; (b) allow Caremark to charge 

inflated prices for generic prescription drugs; and thereby (c) secure from health plans, such as 

Plaintiffs, payment for generic prescription drugs at inflated prices. 

D. Walgreens’ Pattern of Racketeering Activity. 

97. Walgreens conducted and participated in the conduct of the affairs of the Cash 

Discount Enterprise through a pattern of racketeering activity, including acts that are indictable 

under 18 U.S.C. § 1341, relating to mail fraud, and 18 U.S.C. § 1343, relating to wire fraud. The 

pattern of racketeering activity by the Cash Discount Enterprise likely involved millions of 

separate instances of use of the U.S. Mail or interstate wire facilities in furtherance of the unlawful 

cash discount pricing scheme. Each of these fraudulent mailings and interstate wire transmissions 

constitutes “racketeering activity” within the meaning of 18 U.S.C. § 1961(1)(B). Collectively, 

these violations constitute a “pattern of racketeering activity,” within the meaning of 18 U.S.C. § 

1961(5), through which Walgreens intended to defraud Plaintiffs, their members, and other 

intended victims. 

98. Each instance of racketeering activity alleged herein was related, had similar 

purposes, involved the same or similar participants and methods of commission, and had similar 

results affecting similar victims, including Plaintiffs and their members. Walgreens and Caremark 

calculated and intentionally crafted the cash discount scheme to ensure their own profits remained 

high, without regard to the effect such pricing behavior had on Plaintiffs and their members who 

would be over-billed for generic prescription drugs. In designing and implementing the scheme, 

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at all times Walgreens was cognizant of the fact that those to whom it reports U&C prices rely on 

the integrity of those reporting those prices consistent with NDPDP standards. 

99. By intentionally and artificially inflating its U&C prices, and then subsequently 

failing to disclose such practices to the health plans, Walgreens, Caremark, and WHI engaged in 

a fraudulent and unlawful course of conduct constituting a pattern of racketeering activity. 

100. Walgreens’, Caremark’s, and WHI’s racketeering activities amounted to a common 

course of conduct, with a similar pattern and purpose, intended to deceive Plaintiffs and their 

members. Each separate use of the U.S. Mail and/or interstate wire facilities employed by 

Walgreens was related, had similar intended purposes, involved similar participants and methods 

of execution, and had the same results affecting the same victims, including Plaintiffs and their 

members. Walgreens has engaged in the pattern of racketeering activity for the purpose of 

conducting the ongoing business affairs of its Cash Discount Enterprise. 

101. The pattern of racketeering activity alleged herein and the Cash Discount Enterprise 

are separate and distinct from each other. Likewise, Walgreens is distinct from the Cash Discount 

Enterprise. 

102. The pattern of racketeering activity alleged herein continues to date. 

E. Walgreens’ Use of the U.S. Mail and Interstate Wire Facilities 

103. Cash Discount Enterprise engaged in and affected interstate commerce because it 

engaged in the following activities across state boundaries: the transmission and publication of 

false and misleading information concerning Walgreens’ U&C prices; the benefits Caremark 

received from Walgreens’ inflated U&C prices; and transmission of false or incomplete statements 

intended to mislead health plans like Plaintiffs regarding the publication of Walgreens’ inflated 

U&C prices. 

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104. Since its inception on or about 2007, the Cash Discount Enterprise’s unlawful 

conduct and wrongful practices were carried out by an array of employees, working across state 

boundaries, who necessarily relied upon frequent transfers of documents, information, products, 

and funds by the U.S. Mail and interstate wire facilities. 

105. The nature and pervasiveness of the cash discount fraud scheme, which was 

orchestrated out of the corporate headquarters of Walgreens, Caremark, and WHI, necessarily 

required those headquarters to communicate directly and frequently by U.S. Mail and interstate 

wire facilities. 

106. Many of the precise dates of the Cash Discount Enterprise’s uses of the U.S. Mail 

and interstate wire facilities (and corresponding RICO predicate acts of mail and wire fraud) have 

been hidden and cannot be alleged without access to Walgreens’ or Caremark’s or WHI’s books 

and records. Indeed, an essential part of the successful operation of the Enterprise alleged herein 

depended upon secrecy. However, Plaintiffs can generally describe the occasions on which the 

RICO predicate acts of mail fraud and wire fraud occurred, and how those acts were in furtherance 

of the scheme; Plaintiffs describe this below. 

107. Walgreens’ use of the U.S. Mail and interstate wire facilities to perpetrate the cash 

discount fraud scheme involved millions of communications since its inception on or about 2007 

through to today, including, inter alia: 

a. Communications of Walgreens’ U&C price to health plans, which occurred 

on a regular basis as health plans’ members purchased generic prescription drugs;

b. Written representations and telephone calls between Walgreens and 

Caremark regarding the cash discount program and Walgreens’ inflated U&C prices; 

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c. Written representations and telephone calls between Walgreens and WHI 

regarding the cash discount program and Walgreens’ inflated U&C prices; 

d. Written and oral communications directed to health plans that fraudulently 

misrepresented Walgreens’ U&C price that were designed to conceal the scheme and deter 

investigations into Walgreens’ U&C pricing; and 

e. Receipts of increased profits sent through the U.S. Mail and interstate wire 

facilities—the wrongful proceeds of the scheme. 

108. In addition to the above-referenced RICO predicate acts, it was foreseeable to 

Walgreens that Caremark and WHI would distribute publications through the U.S. Mail and by 

interstate wire facilities, and in those publications, conceal that Walgreens’ U&C price was 

fraudulently inflated. 

F. Motive and Common Purpose.

109. Walgreens’ motive and purpose in creating and conducting the scheme and the 

Enterprise was to compete in the cash payor business while not damaging its substantial health 

plan business by using a lower U&C price that could cost Walgreens billions. Caremark joined in 

that common purpose because it made more money the higher the drug cost to health plans, either 

in the form of rebates from the manufacturers or from the difference between the spread, the 

amount charged the health plan and the cost to Caremark. Although PBMs typically agree to share 

rebates in some form with clients, they link the rebates to formulary savings in such a manner that 

the PBM often is able to secretly retain all of the rebates. Furthermore, PBMs refuse to disclose 

specific rebate amounts to clients in any fashion other than in the aggregate compared to 

performance standards, thereby preventing the client from learning the true amount of rebates that 

the PBM has received in connection with the health plan client. 

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G. Damages Caused by Walgreens’ Cash Discount Fraud. 

110. Walgreens’ violations of federal law and its pattern of racketeering activity have 

directly and proximately caused Plaintiffs and their members to be injured in their business or 

property because Plaintiffs and their members have paid inflated out-of-pocket expenses for 

generic prescription drugs. 

111. As described above, when a health plan pays for prescription drugs, its payment is 

based on the lower of AWP, MAC or U&C. When U&C is artificially inflated, the health plan 

overpays due to a fraudulent price. 

112. Plaintiffs’ injuries, and those of their members, were proximately caused by 

Walgreens’ racketeering activity. But for the misstatements made by Walgreens, Caremark, and 

WHI, and the pricing scheme employed by the Cash Discount Enterprise, Plaintiffs would have 

paid less for generic prescription drugs for their members. 

113. Plaintiffs’ injuries were directly caused by Walgreens’ racketeering activity. 

Walgreens’ racketeering activity inflated the U&C price, the price upon which Plaintiffs’ payments 

for generic prescription drugs were based. 

114. And, although the Cash Discount Enterprise was effectuated to give Walgreens a 

wrongfully-obtained advantage over certain its competitors, the harm this suit seeks to remedy was 

not suffered by Walgreens’ competitors. Indeed, Walgreens’ competitors such as CVS and Rite 

Aid have engaged in similar misconduct. The United States District Court for the District of Rhode 

Island granted leave to amend to add, and rejected dismissal-like futility arguments against, 

substantially similar RICO allegations targeting CVS Pharmacy and PBMs including Caremark. 

See Sheet Metal Workers Local No. 20 v. CVS Pharmacy, Inc., 305 F. Supp. 3d 337 (D.R.I. 2018). 

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V. Tolling of the Statute of Limitations. 

115. As alleged herein, Walgreens affirmatively presented claims for reimbursement to 

Plaintiffs, through Plaintiffs’ PBMs, that contained false and inflated U&C prices and further acted 

to conceal the true U&C prices being charged to its cash customers. 

116. Furthermore, Walgreens used its marketing of the PSC Program to conceal the 

fraudulent scheme it had implemented. Walgreens marketed the PSC Program as being a “club” 

that required “membership” in order to obtain the discount pricing. Walgreens’ marketing effort 

was meant to present the PSC Program as an “exclusive” program, not available to the general 

public. In reality, however, the PSC Program was not exclusive and was available to the general 

public. Walgreens used its marketing to conceal the true nature of the PSC Program and the fact 

that cash-paying customers were paying U&C prices that were lower than the U&C prices 

Walgreens reported to Plaintiffs. 

117. Walgreens does not provide Plaintiffs with records of transactions involving 

Walgreens’ cash customers, including cash customers paying PSC Program prices, JustRx 

Program prices, third-party discount card program prices, or other discounted cash prices. 

118. Plaintiffs had no information regarding how many of Walgreens’ customers were 

in the PSC Program or JustRx Program, used third-party discount card programs, or received other 

discounts. Plaintiffs further had no information regarding the actual cash prices charged to 

customers, or any other information regarding Walgreens’ cash transactions for prescription drugs. 

119. Plaintiffs could not have discovered the truth regarding Walgreens’ fraudulent 

scheme because Walgreens actively concealed information and data from Plaintiffs that was 

necessary to understand the facts underlying Walgreens’ scheme. 

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120. Walgreens knew that Plaintiffs would ultimately rely upon the claims data, 

including the reported U&C charge, that Walgreens submitted to them to pay the claims, and 

Plaintiffs relied on Walgreens to report its U&C charges truthfully and consistent with industry 

practice, government regulations, and contract definitions. 

121. Walgreens repeatedly has refused requests made by third-party payors like 

Plaintiffs to produce relevant cash pricing transaction data necessary to validate Walgreens’ 

reported U&C prices like those submitted to Plaintiffs, i.e., records of transactions involving 

Walgreens’ cash-paying and uninsured customers. 

122. Walgreens never notified Plaintiffs that it excluded the prices charged on millions 

of its steeply discounted PSC Program, JustRx Program, third-party discount card programs, and 

other discount sales to cash customers from the U&C prices that it reported to Plaintiffs, through 

Plaintiffs’ PBMs, on claims submitted for payment. 

123. Instead, Walgreens established a covert two-track U&C pricing system: one price 

reported as U&C on claims for those customers that used an insurance benefit provided by 

Plaintiffs; and a different—and almost universally lower—price actually charged to customers 

who did not use an insurance benefit (i.e., cash-paying customers). 

124. Under this two-track U&C pricing system, Walgreens knowingly and intentionally 

submitted inflated prices to Plaintiffs, through Plaintiffs’ PBMs, as U&C. 

125. By knowingly and intentionally reporting inaccurate U&C charges to Plaintiffs, 

through Plaintiffs’ PBMs, in order to obtain inflated reimbursements for millions of brand and 

generic prescriptions filled for and sold to Members at Walgreens pharmacies across the country, 

knowing at all times that Plaintiffs would rely upon the NCPDP field 426-DQ data in making 

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payment decisions, Walgreens misled Plaintiffs and caused Plaintiffs to overpay many millions of 

dollars. 

126. Walgreens submitted millions of claims for payment to Plaintiffs, through 

Plaintiffs’ PBMs—almost all of which included inflated (false) U&C charges. 

127. Walgreens took other active steps to hide its scheme from Plaintiffs. For example, 

Walgreens frequently, and without providing any notice to Plaintiffs, changed its PSC Program’s 

scope and prices. Walgreens also used its marketing terminology as subterfuge to make it look 

like the PSC Program provided exclusive, limited “club” prices instead of discount cash prices 

available to the general public. 

128. Walgreens’ systematic reporting of inflated U&C charges and its deliberate 

obfuscation of the cash pricing information for most of the drugs eligible for PSC Program 

discounts, inter alia, prevented Plaintiffs from recognizing Walgreens’ misleading and fraudulent 

pricing scheme. 

129. Walgreens knowingly and fraudulently concealed its true U&C prices every time it 

reported prices higher than its PSC Program, JustRx Program, third-party discount card program 

prices, and other discounted cash prices to Plaintiffs, through Plaintiffs’ PBMs, in the NCPDP 

426-DQ data field—for many millions of prescriptions that it submitted for payment to Plaintiffs. 

130. As a result of Walgreens’ fraudulent concealment, the running of any statute of 

limitations has been tolled with respect to any claims that Plaintiffs have as a result of the unlawful 

conduct alleged in this Complaint. 

131. Plaintiffs discovered the bases for the causes of action set forth in this Complaint 

not earlier than January 2019. 

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132. Since Plaintiffs were unable to know the truth regarding Walgreens’ fraudulent 

conduct until, at the earliest, January 2019, the discovery rule applies to delay the commencement 

of any statute of limitations that may be applicable to Plaintiffs’ claims resulting from the unlawful 

conduct alleged in this Complaint. 

133. As of the date of the filing of this Complaint, Walgreens continues to submit 

inflated U&C prices for payment by Plaintiffs, via Plaintiffs’ PBMs, on claims for generic and 

brand-name prescription drugs. Walgreens’ inflated U&C prices are in excess of the prices that it 

charges millions of cash-paying customers enrolled in the PSC Program, JustRx Program, or other 

third-party discount card programs, and other discounted prices for the very same drugs. On 

millions of payment claims, Walgreens continues to collect higher payment amounts from 

Plaintiffs than that to which it is entitled. 

134. Moreover, to the extent that any statute of limitations applies to any of Plaintiffs’ 

claims, the running of that limitations period has been tolled by the class action tolling doctrine 

pursuant to the United States Supreme Court’s decision in American Pipe & Construction Co. v. 

Utah, 414 U.S. 538 (1974), and subsequent decisions. 

FIRST CLAIM FOR RELIEF (COUNT I) 

VIOLATION OF THE RACKETEER INFLUENCED AND CORRUPT 

ORGANIZATIONS ACT (RICO), 18 U.S.C. § 1962(c) 

(BROUGHT BY CFMI, GHMSI AND CAREFIRST BLUECHOICE) 

135. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

136. Under RICO, it is unlawful for (1) any culpable person to (2) conduct an 

“enterprise” (3) affecting interstate commerce (4) through a “pattern” (5) of “racketeering 

activity.” 18 U.S.C. § 1962(c). 

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137. RICO defines a culpable “person” as an “individual or entity capable of holding a 

legal or beneficial interest in property.” 18 U.S.C. § 1961(3). Defendants satisfy this statutory 

definition as each defendant already has, or can hold, legal interests in property. 

138. The statutory term “‘enterprise’ includes any individual, partnership, corporation, 

association, or other legal entity, and any union or group of individuals associated in fact although 

not a legal entity.” 18 U.S.C. § 1861(4). Defendant Walgreen Co. (a legal entity company), and 

Defendant Walgreens Boots Alliance, Inc. (another legal entity corporation) associated together 

with Caremark and WHI, formed a Cash Discount Enterprise wherein they worked together for a 

common purpose of engaging in a cash discount fraud scheme. United States v. Turkette, 452 U.S. 

576, 583 (1981).  

139. The Cash Discount Enterprise engages in and affects interstate commerce. A RICO 

enterprise is involved in “interstate commerce” when it is itself “directly engaged in the 

production, distribution, or acquisition of goods and services in interstate commerce.” United 

States v. Robertson, 514 U.S. 669, 672 (1995). Defendants’ pattern of racketeering affected 

interstate commerce because they engaged in the following activities across state boundaries: the 

transmission and publication of false and misleading information concerning Walgreens’ U&C 

prices; the benefits PBMs received from Walgreens’ inflated U&C prices; and transmission of 

false or incomplete statements intended to mislead health plans like Plaintiffs regarding the 

publication of Walgreens’ inflated U&C prices. 

140. Defendants’ Cash Discount Enterprise perpetrated, and continues to perpetrate, its 

cash discount scheme through widespread and daily wire and mail fraud, which constitutes a 

pattern of racketeering pursuant to 18 U.S.C. § 1961(5). RICO defines a “pattern of racketeering 

activity” as “at least two acts of racketeering activity.” 18 U.S.C. § 1961(5). The “heart of any 

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RICO complaint is the allegation of a pattern of racketeering.” Agency Holding Corp. v. MalleyDuff & Associates, Inc., 483 U.S. 143, 154 (1987) (Court’s emphasis). Rather than “a sporadic or 

isolated event,” a pattern of racketeering under RICO is continuous such that “a factfinder could 

find that these practices occurred over a period a several years, involved separate transactions, and 

injured a great number of individuals, thus posing a threat of continued criminal activity.” 

Bermudez v. First of Am. Bank Champion, N.A., 860 F. Supp. 580, 597 (N.D. Ill. 1994), withdrawn 

pursuant to settlement, 886 F. Supp. 643 (N.D. Ill. 1995). 

141. Defendants’ Cash Discount Enterprise engaged in a continuous series of fraud that 

has operated in some form from 2007 to the present. To perpetrate this fraud, Defendants 

communicated directly and frequently with Caremark and WHI by U.S. Mail and interstate wire 

facilities, in writing, telephonically, and by e-mail, committing the predicate RICO acts of mail 

and wire fraud. RICO defines “racketeering activity” to include any act that is indictable under the 

provisions of title 18 of the United States Code. 18 U.S.C. § 1961(1)(B). That includes any act in 

violation of “section 1956 (relating to the laundering of monetary instruments)” and “section 1957 

(relating to engaging in monetary transactions in property derived from specified unlawful 

activity).” Id. 

142. Defendants also received of increased profits sent through the U.S. Mail and 

interstate wire facilities—the wrongful proceeds of the scheme. 

143. In addition to the above-referenced RICO predicate acts, it was foreseeable to 

Walgreens that Caremark and WHI would distribute publications through the U.S. Mail and by 

interstate wire facilities, and in those publications, conceal that Walgreens’ U&C price was 

fraudulently inflated. 

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144. Defendants are employed by or otherwise associated with this Enterprise. 

Defendants agreed to and did conduct and participate in the conduct of the enterprise’s affairs 

through a pattern of racketeering activity, namely mail and wire fraud, and for the unlawful 

purpose of intentionally defrauding Plaintiffs, in violation of 18 U.S.C. § 1962(c). 

145. Pursuant to and in furtherance of their fraudulent cash discount scheme, Defendants 

committed multiple related acts of wire and mail fraud. In fact, every health insurance claim 

submitted to Plaintiffs which did not reflect the cash discount price as the U&C price, all of which 

were and are submitted by Defendants through mail or wire, constitutes an independent act of mail 

or wire fraud, which Defendants have engaged in millions of times since 2007. 

146. Many of the precise dates of the Cash Discount Enterprise’s uses of the U.S. Mail 

and interstate wire facilities (and corresponding RICO predicate acts of mail and wire fraud) have 

been hidden and cannot be alleged without access to Walgreens’ or Caremark’s or WHI’s books 

and records. Indeed, an essential part of the successful operation of the Enterprise alleged herein 

depended upon secrecy. However, Plaintiffs have generally described herein the occasions on 

which the RICO predicate acts of mail fraud and wire fraud occurred, and how those acts were in 

furtherance of the scheme. 

147. As a direct and proximate result of Defendants’ racketeering activities and 

violations of 18 U.S.C. § 1962(b), Plaintiffs have been injured in their business and property. 

Defendants’ scheme has generated hundreds of millions of dollars in illicit cash proceeds, and 

continues to generate more daily. But for the misstatements made by Walgreens and Caremark and 

the pricing scheme employed by the Cash Discount Enterprise, Plaintiffs would have paid less for 

generic prescription drugs for their members. 

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148. By virtue of these violations of 18 U.S.C. § 1962(c), Walgreens is liable to Plaintiffs 

for three times the damages they have sustained, plus the cost of this suit, including reasonable 

attorneys’ fees. 

SECOND CLAIM FOR RELIEF (COUNT II) 

VIOLATION OF THE RACKETEER INFLUENCED AND CORRUPT 

ORGANIZATIONS ACT (RICO), 18 U.S.C. § 1962(d), ET SEQ. 

(BROUGHT BY CFMI, GHMSI AND CAREFIRST BLUECHOICE) 

149. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

150. Defendants have intentionally conspired and agreed to, along with Caremark and 

WHI, violate 18 U.S.C. § 1962 (c), as described in Count I, which Plaintiffs adopt and incorporate 

by reference as if fully set forth herein. 

151. Defendants have intentionally conspired and agreed to, along with Caremark and 

WHI, conduct, facilitate, and otherwise participate in the conduct of the affairs of the enterprise 

through a pattern of racketeering activity. Defendants knew that their predicate acts of mail and 

wire fraud were part of a pattern of racketeering activity and agreed to the commission of those 

acts to facilitate their cash discount fraud scheme. That conduct constitutes a conspiracy to violate 

18 U.S.C. § 1962 (c), in violation of 18 U.S.C. § 1962 (d), 

152. As a direct and proximate result of Defendants’ agreement to facilitate the 

conspiracy, the contemplated racketeering acts in furtherance of that conspiracy, and violations 

of 18 U.S.C. § 1962 (d), Plaintiffs have been injured in their business and property. Defendants’ 

scheme has generated hundreds of millions of dollars in illicit cash proceeds, and continues to 

generate more daily. But for the misstatements made by Walgreens, Caremark, WHI, and the 

pricing scheme facilitated by the Cash Discount Enterprise, Plaintiffs would have paid less for 

generic prescription drugs for their members. 

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153. By virtue of these violations of 18 U.S.C. § 1962(d), Walgreens is liable to 

Plaintiffs for three times the damages they have sustained, plus the cost of this suit, including 

reasonable attorneys’ fees. 

THIRD CLAIM FOR RELIEF (COUNT III) 

FRAUD 

154. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

155. On millions of claims for payment, Walgreens deliberately submitted to Plaintiffs, 

through Plaintiffs’ PBMs, inflated U&C prices in the NCPDP field 426-DQ that were significantly 

higher than the prices available to individuals who paid without insurance for prescription drugs. 

Walgreens made misrepresentations to Plaintiffs’ PBMs and Plaintiffs each time it reported prices 

higher than the prices available to individuals who paid without insurance as its U&C charges in 

the 426-DQ data field on the standardized NCPDP price form. 

156. Walgreens’ misrepresentations to Plaintiffs’ PBMs and Plaintiffs began in 2007 and 

are ongoing. Walgreens made misrepresentations to Plaintiffs via Plaintiffs’ PBMs, knowing that 

the fraudulently inflated U&C charges it submitted in field 426-DQ of the NCPDP form would 

materially impact the adjudication process and be communicated to Plaintiffs as the ultimate payor. 

157. Because the U&C price was a payment term necessary for determining Plaintiffs’ 

payment price, the U&C prices Walgreens reported to Plaintiffs’ PBMs and Plaintiffs were 

material. 

158. Walgreens knew that the cash prices that it charged PSC Program customers, 

JustRx Program customers, and third-party discount card customers, and other discounted prices 

for prescriptions were lower than the inflated U&C charges that Walgreens reported electronically 

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to Plaintiffs’ PBMs and Plaintiffs on the NCPDP form for the same drugs. Walgreens thus knew 

that the U&C charges it represented were false and misleading. 

159. Walgreens submitted inflated U&C prices on claims for payment by Plaintiffs with 

the knowledge and intent that those false U&C prices would be relied upon to adjudicate Plaintiffs’ 

payments, to the benefit of Walgreens. Specifically, through this fraudulent scheme, Walgreens 

intended to gain reimbursement payments in amounts far greater than it was entitled. 

160. Plaintiffs lacked the ability to discover Walgreens’ fraud. Plaintiffs had no means 

to identify how many Walgreens customers were actually paying PSC Program prices, JustRx 

Program prices, third-party discount card program prices, or other discount prices; or to identify 

the precise list of drugs discounted by those programs; or to identify the prices at which all of those 

discounted drugs were offered to Walgreens’ cash customers. 

161. Plaintiffs justifiably relied on the accuracy of the pricing information that 

Walgreens reported in NCPDP field 426-DQ. 

162. As a result of Walgreens’ fraudulent conduct and Plaintiffs’ justifiable reliance, 

Plaintiffs have sustained immense damage. Plaintiffs have overpaid millions of dollars to 

Walgreens. In addition, Walgreens’ fraudulent conduct has prevented Plaintiffs from obtaining 

more favorable prescription drug prices for their Members. 

163. Walgreens’ false and misleading conduct is ongoing: Walgreens continues to 

report inflated U&C prices in NCPDP field 426-DQ for claims submitted for payment by Plaintiffs. 

164. Plaintiffs are entitled to recover damages against Walgreens based on fraud in an 

amount to be determined at trial.

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FOURTH CLAIM FOR RELIEF (COUNT IV) 

FRAUDULENT NONDISCLOSURE 

165. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

166. Walgreens had special knowledge of material facts, i.e., the accurate, non-inflated 

U&C prices, which the Plaintiffs do not have. 

167. Walgreens concealed material facts, i.e., the accurate, non-inflated U&C prices, 

from Plaintiffs’ PBMs and Plaintiffs. 

168. Walgreens knew what the accurate, non-inflated U&C prices were for the 

prescription drugs for which it submitted claims for reimbursement from Plaintiffs’ PBMs and 

Plaintiffs. These prices were the same or similar prices Walgreens was charging its customers 

using the PSC Program, JustRx Program, third-party discount programs, or through other discounts 

to purchase the same prescription drugs. 

169. Walgreens knew that it was not submitting the accurate, non-inflated U&C prices 

for reimbursement from Plaintiffs’ PBMs and Plaintiffs. 

170. Walgreens knew or should have known that Plaintiffs’ PBMs and Plaintiffs would 

rely upon Walgreens’ concealment of the accurate, non-inflated U&C prices to adjudicate 

Walgreens’ claims for reimbursement. 

171. Walgreens had a duty to disclose the accurate, non-inflated, true U&C prices. 

Walgreens had special knowledge of the complete list of drugs, drug prices, discounts, and cash 

transaction data necessary to determine the accurate, non-inflated, true U&C prices. Plaintiffs 

could not determine the true U&C price because this information was hidden by Walgreens and 

not available to Plaintiffs. 

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172. As a result of Walgreens’ fraudulent nondisclosure, Plaintiffs have sustained 

immense damage in the form of overpayments to Walgreens totaling millions of dollars. In 

addition, Walgreens’ fraudulent conduct has prevented Plaintiffs from obtaining more favorable 

prescription drug prices for their members. 

173. Walgreens’ fraudulent conduct is ongoing: Walgreens continues to report inflated 

U&C prices in NCPDP field 426-DQ for claims submitted for payment by Plaintiffs. 

174. Plaintiffs are entitled to recover damages against Walgreens based on its fraudulent 

nondisclosures in an amount to be determined at trial.

FIFTH CLAIM FOR RELIEF (COUNT V) 

UNJUST ENRICHMENT 

175. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein 

176. Under the circumstances described herein, Walgreens has owed—and continues to 

owe—a duty to Plaintiffs to provide Plaintiffs with accurate U&C prices on reimbursement claims. 

177. Because Walgreens fraudulently inflated the U&C prices it reported on millions of 

claims submitted for Plaintiffs’ reimbursement, Plaintiffs were overcharged, and thus overpaid 

millions of dollars to Walgreens. 

178. Walgreens knowingly and voluntarily accepted these millions of dollars in 

overpayments from Plaintiffs. 

179. Plaintiffs’ overpayments should not have been paid to Walgreens. Those millions 

of dollars in overpayments should have been retained by Plaintiffs. 

180. Walgreens’ retention of these overpayment amounts violates fundamental 

principles of justice, equity, and good conscience. 

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181. Under the circumstances described herein, it would be inequitable for Walgreens 

to retain these overpayments. 

182. As a result of Walgreens’ wrongful conduct as described herein, Walgreens has 

been unjustly enriched at the expense of, and to the detriment of, Plaintiffs. 

183. Walgreens is therefore liable to Plaintiffs for restitution in the amount of 

Walgreens’ wrongfully obtained monies. 

SIXTH CLAIM FOR RELIEF (COUNT VI) 

VIOLATION OF THE ILLINOIS UNIFORM 

DECEPTIVE TRADE PRACTICES ACT (815 ILCS 510, et seq.) 

184. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

185. Walgreens’ business acts and practices alleged herein constitute deceptive trade 

practices under the Illinois Uniform Deceptive Trade Practices Act (“IUDTPA”). 

186. Each Plaintiff and each Defendant is, and at all relevant or material times was, a 

“person” as defined in IUDTPA.44 

187. Walgreens’ deceptive trade practices included, but were not limited to: (i) making 

false and misleading statements of fact concerning the reasons for, existence of, or amounts of 

price reductions; and (ii) engaging in conduct which similarly created a likelihood of confusion or 

misunderstanding. 

188. At all material and relevant times, Walgreens’ wrongful acts occurred in the course 

of its “business, vocation, or occupation” as described in IUDTPA.45 

44 See 815 ILCS 510/1(2) (“‘[P]erson’ means an individual, corporation, government or governmental 

subdivision or agency, business trust, estate, trust, partnership, unincorporated association, 2 or more of 

any of the foregoing having a joint or common interest or any other legal or commercial entity.”). 

45 815 ILCS 510/2. 

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189. At all material and relevant times, the circumstances related to Walgreens’ 

wrongful acts occurred primarily and substantially in Illinois. Walgreens has administered, and 

continues to administer, its PSC Program from Walgreens’ corporate headquarters in Deerfield, 

Illinois. The decisions to not report its discounted prices as U&C to Plaintiffs and to conceal that 

decision from Plaintiffs were made by Walgreens’ senior management in and implemented out of 

Illinois. Walgreens has also issued statements from senior officials and made other representations 

about the PSC Program from and in the course of its Illinois operation which contributed to the 

fraud, concealment, and deception. Further, WHI, which was Walgreen Co.’s wholly-owned 

subsidiary PBM during the initial years of Walgreens’ fraudulent scheme, was at that time based 

in and operated out of Illinois. In Illinois, WHI created and published a false policy regarding 

Walgreens’ reporting of discounted prices through its Pharmacy Manual, which contained a U&C 

definition consistent with the NCPDP requirements and industry standards, and disseminated that 

false policy from Illinois. Through its scheme, Walgreens secured hundreds of millions of dollars 

in payments from Plaintiffs, and these payments were sent to Walgreens’ headquarters in Illinois. 

Walgreens’ PBM agreements were negotiated by Walgreens in Illinois. And members of each of 

Plaintiffs’ health plans have purchased prescription drugs from Walgreens in Illinois. 

190. Walgreens represented that the prices it reported in NCPDP field 426-DQ were 

Walgreens’ true and accurate U&C prices. Walgreens’ representations were false, and Walgreens’ 

true and accurate U&C prices for the prescription drugs for which it sought reimbursement from 

Plaintiffs’ PBMs and Plaintiffs were lower than the prices quoted by Walgreens. 

191. The true and accurate U&C prices for the prescription drugs for which Walgreens 

sought reimbursement were the actual prices at which the prescription drugs were regularly and 

customarily sold at retail by Walgreens, inclusive of any prices offered to customers paying 

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without insurance who participated in the PSC Program, JustRx Program, third-party discount card 

programs, or received other discounts. 

192. Walgreens actions are ongoing: Walgreens continues to report inflated U&C prices 

in NCPDP field 426-DQ for claims submitted for payment by Plaintiffs. As a result, Plaintiffs 

face the threat of future harm. 

193. Walgreens’ deceptive practices regarding its true U&C prices of drugs discounted 

by the PSC Program (and other similar programs) injured both Plaintiffs and their Members, 

including those based in Illinois. Walgreens’ misconduct was and continues to be directed at and 

impacts the market generally and otherwise implicates consumer protection concerns, and 

remedying Walgreens’ wrongdoing through the relief requested herein would serve the interests 

of consumers. 

194. Because Walgreens continues its U&C overcharging conduct described in this 

Complaint, Plaintiffs are likely to be damaged by Walgreens’ continued deceptive trade practices. 

Consequently, Plaintiffs seek injunctive relief, pursuant to 815 ILCS 510/3, to enjoin Walgreens 

from excluding PSC Program prices, JustRx Program prices, third-party discount card program 

prices, and other discounts from the U&C prices it reports on claims for Plaintiffs’ reimbursement. 

195. Because Walgreens has willfully engaged in the deceptive trade practices described 

in this complaint, Plaintiffs are entitled to recover attorneys’ fees and costs of suit. 

SEVENTH CLAIM FOR RELIEF (COUNT VII) 

VIOLATION OF THE ILLINOIS CONSUMER FRAUD AND 

DECEPTIVE BUSINESS PRACTICES ACT (815 ILCS 505, et seq.) 

196. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

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197. Walgreens’ business acts and practices alleged herein constitute unfair, 

unconscionable, deceptive, and fraudulent acts or practices under the Illinois Consumer Fraud and 

Deceptive Business Practices Act (“ICFA”). 

198. Each Plaintiff and each Defendant is, and at all relevant or material times was, a 

“person” as defined in ICFA.46 

199. At all material and relevant times, the circumstances related to Walgreens’ 

wrongful acts occurred primarily and substantially in Illinois. Walgreens has administered, and 

continues to administer, its PSC Program from Walgreens’ corporate headquarters in Deerfield, 

Illinois. The decisions to not report its discounted prices as U&C to Plaintiffs and to conceal that 

decision from Plaintiffs were made by Walgreens’ senior management in and implemented out of 

Illinois. Walgreens has also issued statements from senior officials and made other representations 

about the PSC Program from and in the course of its Illinois operation which contributed to the 

fraud, concealment, and deception. Further, WHI, which was Walgreen Co.’s wholly-owned 

subsidiary PBM during the initial years of Walgreens’ fraudulent scheme, was at that time based 

in and operated out of Illinois. In Illinois, WHI created and published a false policy regarding 

Walgreens’ reporting of discounted prices through its Pharmacy Manual, which contained a U&C 

definition consistent with the NCPDP requirements and industry standards, and disseminated that 

false policy from Illinois. Through its scheme, Walgreens secured hundreds of millions of dollars 

in payments from Plaintiffs, and these payments were sent to Walgreens’ headquarters in Illinois. 

Walgreens’ PBM agreements were negotiated by Walgreens in Illinois. And members of each of 

Plaintiffs’ health plans have purchased prescription drugs from Walgreens in Illinois. 

46 See 815 ILCS 505/1(c) (“The term ‘person’ includes[, inter alia,] any natural person or his legal 

representative, partnership, corporation (domestic and foreign), company, trust, business entity or 

association.”). 

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200. Because Plaintiffs suffered actual damage as a result of Walgreens’ ICFA 

violations, Plaintiffs are statutorily authorized to bring a private action to recover actual economic 

damages, reasonable attorney’s fees, and litigation costs, and to secure injunctive relief against 

Defendants. 

201. Defendants engaged in unfair, deceptive, and unlawful acts and practices, including 

the employment of deception, fraud, false pretenses, misrepresentations to Plaintiffs, and the 

concealment, suppression and omission of material facts from Plaintiffs, with the specific intent 

that the Plaintiffs would rely upon those deceptive acts and practices to reimburse claims to 

Walgreens. 

202. At all material and relevant times, Walgreens’ wrongful acts occurred in the course 

of its business and in the conduct of trade and commerce, as defined by ICFA.47 Walgreens’ unfair, 

unlawful, and deceptive acts and practices alleged herein regarding its true U&C prices occurred 

during and related directly to the routine purchase, sale, and reimbursement of prescription drugs 

at Walgreens pharmacies. 

203. Further, Walgreens marketed, promoted, advertised, and distributed the PSC 

Program cards, JustRx Program cards, other third-party discount program cards, and marketing 

materials in conjunction with PSC Program, JustRx Program, and third-party discount program 

cards, that “purport[ed] to offer discounts or access to discounts from health care providers in 

health related purchases,” but the “the discounts or access to discounts offered or the range of 

discounts or access to the range of discounts offered,” and Walgreens’ intent for offering those 

discounts, were misleading, deceptive, and fraudulent.48 

47 815 ILCS 505/2. 

48 815 ILCS 505/2B.3. 

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204. Walgreens displayed price quotations through submission of claims for 

reimbursement for prescription drugs to Plaintiffs’ PBMs and Plaintiffs. Walgreens’ price 

quotations were included in NCPDP field 426-DQ of its claims for reimbursement. 

205. Walgreens represented that its price quotations included in NCPDP field 426-DQ 

were U&C prices. Walgreens’ representations were false, and Walgreens’ true and accurate U&C 

prices for the prescription drugs for which it sought reimbursement from Plaintiffs’ PBMs and 

Plaintiffs were lower than the prices quoted by Walgreens. 

206. The true and accurate U&C prices for the prescription drugs for which Walgreens 

sought reimbursement were the actual prices at which the prescription drugs were regularly and 

customarily sold at retail by Walgreens, inclusive of any prices offered to customers paying 

without insurance who participated in the PSC Program, JustRx Program, third-party discount card 

programs, or received other discounts. 

207. In addition to Plaintiffs, Walgreens’ fraudulent conduct impacted consumers 

purchasing prescription drugs from Walgreens pharmacies using insurance through increased 

copay, coinsurance, and deductible obligations, as well as increased premiums resulting from 

increased costs to Plaintiffs. The requested relief will also serve the interests of these consumers. 

208. Walgreens actions are ongoing: Walgreens continues to report inflated U&C prices 

in NCPDP field 426-DQ for claims submitted for payment by Plaintiffs. As a result, Plaintiffs 

face the threat of future harm. 

209. Walgreens’ deceptive practices regarding its true U&C prices of drugs discounted 

by the PSC Program (and other similar programs) injured both Plaintiffs and their Members, 

including those based in Illinois. Walgreens’ misconduct was and continues to be directed at and 

impacts the market generally and otherwise implicates consumer protection concerns, and 

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remedying Walgreens’ wrongdoing through the relief requested herein would serve the interests 

of consumers. 

210. Walgreens’ acts, omissions, and practices, as described herein, proximately caused 

Plaintiffs to suffer actual damages in the form of, inter alia, overpaying reimbursements on at least 

millions of prescription claims. Pursuant to 815 ILCS 505/10a, Plaintiffs are entitled to the amount 

of the actual economic damages resulting from Walgreens’ unlawful trade practices. 

211. Plaintiffs also seek injunctive relief, pursuant to 815 ILCS 505/10a(c), to enjoin 

Walgreens from excluding PSC Program prices, JustRx Program prices, third-party discount card 

program prices, and other discounted prices from the U&C prices it reports on claims for Plaintiffs’ 

reimbursement. 

EIGHTH CLAIM FOR RELIEF (COUNT VIII) 

VIOLATION OF MARYLAND CONSUMER PROTECTION ACT, 

MD. COM. LAW CODE § 13-101 et seq. 

(BROUGHT BY CFMI, GHMSI AND CAREFIRST BLUECHOICE) 

212. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

213. CFMI, GHMSI and CareFirst BlueChoice are consumers within the meaning of the 

Maryland Consumer Protection Act, Md. Code Ann., Com. Law § 13-101 et seq. (“MCPA”) who 

transacted with Walgreens through CFMI’s, GHMSI’s and CareFirst BlueChoice’s insured 

members’ purchase of generic prescription drugs. 

214. Defendants are persons and merchants within the meaning of MCPA § 13-101(g), 

(h). 

215. The MCPA was “intended to provide minimum standards for the protection of 

consumers in the State.” § 13-101. 

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216. Among other things, the MCPA prohibits unfair and deceptive trade practices “in 

the sale, lease, rental, loan, or bailment of any consumer goods, consumer realty, consumer 

services... .” MCPA § 13-303(1). 

217. Deceptive trade practices include “[d]eception, fraud, false pretense, false premise, 

misrepresentation, or knowing concealment, suppression, or omission of any material fact with the 

intent that the consumer relies on the same in connection with... the promotion or sale of any 

consumer goods... or consumer service[.]” MCPA § 13-301. 

218. Walgreens has engaged in unfair, abusive or deceptive trade practices against 

CFMI, GHMSI and CareFirst BlueChoice within the meaning of, and in violation of, the MCPA 

by engaging in deception, fraud, false pretense, false premise, misrepresentation, knowing 

concealment, suppression, and omission regarding the true U&C price for prescription drugs. 

219. Defendants violated MCPA § 13-301(3) by failing to state a material fact, a failure 

which deceives to tends to deceive. As alleged herein, Walgreens’ conduct and nondisclosures 

were false, misleading and likely to deceive CFMI, GHMSI and CareFirst BlueChoice in violation 

of the MCPA. 

220. Walgreens engaged in these unfair and deceptive trade practices in connection with 

the offering for sale of consumer goods in violation of MCPA § 13-303. 

221. Walgreens’ representations or omissions were material because they were likely to, 

and in fact did, deceive CFMI. GHMSI and CareFirst BlueChoice. 

222. Walgreens intended to mislead CFMI, GHMSI and CareFirst BlueChoice and 

induce CFMI, GHMSI and CareFirst BlueChoice to rely on Walgreens’ representations and 

omissions. 

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223. CFMI, GHMSI and CareFirst BlueChoice would not have paid Walgreens’ inflated 

prices for prescription drugs if nor for Walgreens’ deception, fraud, false premise, 

misrepresentation, knowing concealment, suppression, and/or omission regarding the true U&C 

price. 

224. As a direct and proximate result of Walgreens’ unlawful, unfair, deceptive and 

fraudulent conduct in violation of the MCPA, CFMI, GHMSI and CareFirst BlueChoice suffered 

injury in fact in the form of paying Walgreens’ inflated prices. 

225. CFMI, GHMSI and CareFirst BlueChoice seek all monetary and non-monetary 

relief allowed by law, including damages, disgorgement, and attorneys’ fees and costs. 

NINTH CLAIM FOR RELIEF (COUNT IX) 

VIOLATION OF VIRGINIA CONSUMER PROTECTION ACT, 

VA. CODE §§ 59.1-200 

(BROUGHT BY GHMSI AND CAREFIRST BLUECHOICE) 

226. Plaintiffs restate and incorporate herein by reference the preceding paragraphs as if 

fully set forth herein. 

227. The transactions for prescription drugs made by GHMSI and CareFirst BlueChoice 

on behalf of their Members were “consumer transactions” within the meaning of the Virginia 

Consumer Protection Act (“VCPA”), Va. Code § 59.1-198. 

228. Defendants are “suppliers” within the meaning of VCPA § 59.1-198. 

229. GHMSI and CareFirst BlueChoice are each a “person” within the meaning of 

VCPA § 59.1-198. 

230. Walgreens used deception, fraud, false pretense, false promise, and 

misrepresentation in connection with consumer transactions by, in the course of selling generic 

prescription drugs, misrepresenting the true prices paid by cash customers and inflating the U&C 

price for those prescription drugs, in violation of VCPA § 59.1-200. 

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231. Walgreens’ deceptions and misrepresentations were material because they were 

intended to, and in fact did, deceive GHMSI and CareFirst BlueChoice in connection with 

consumer transactions. 

232. Walgreens intended to deceive GHMSI and CareFirst BlueChoice, and to 

misrepresent the true U&C prices for prescription drugs. 

233. Walgreens knew, or should have known, that GHMSI and CareFirst BlueChoice 

would rely on these misrepresentations and, as a result, would pay inflated reimbursements above 

Walgreens’ true U&C prices. 

234. As a result of Walgreens’ deception and misrepresentations, GHMSI and CareFirst 

BlueChoice did pay the artificially inflated reimbursements to Defendants. 

235. Each of Walgreens’ violations of the VCPA were done willfully, entitling GHMSI 

and CareFirst BlueChoice to their actual damages, statutory damages, and exemplary damages 

under VCPA § 59.1-204. 

NOTICE TO STATE ATTORNEY GENERAL 

Pursuant to applicable statutory provisions, a copy of this Complaint has been mailed to 

the Offices of the Attorney General of Illinois with the filing of this Complaint. Upon entry or 

judgment or order in this action, a copy of such judgment or order will also be mailed to the Office 

of the Attorney General of Illinois. 

PRAYER FOR RELIEF 

WHEREFORE, Plaintiffs seek judgment in an amount to be determined at trial, as 

follows: 

a) That Plaintiffs are owed at least the amount that Plaintiffs were overcharged on 

reimbursement claims where Plaintiffs paid Walgreens based on Walgreens’ reported U&C prices 

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that were higher than the true U&C price offered to Walgreens’ customers who paid without using 

insurance; 

b) That the Court grant permanent injunctive relief to prohibit Walgreens from 

continuing to engage in the unlawful practices, acts, and omissions described herein; 

c) That the Court award compensatory, consequential, and general damages in an 

amount to be determined at trial; 

d) That the Court order disgorgement and restitution of all earnings, profits, 

compensation, and benefits received by Walgreens as a result of its unlawful practices, acts, and 

omissions; 

e) That the Court award statutory double or treble damages, and other exemplary or 

punitive damages, to the extent the relevant law permits; 

f) That the Court adjudge and decree that the unlawful acts and omissions alleged in 

this Complaint are unfair and deceptive business acts and practices in violation of the consumer 

protection statutes alleged herein; 

g) That the Court award to Plaintiffs the costs and disbursements of the action, along 

with reasonable attorneys’ fees; 

h) That the Court award pre- and post-judgment interest at the maximum rate 

permitted by applicable laws; 

i) That the Court grant all such other relief as it deems just and proper. 

JURY DEMAND

Plaintiffs hereby demand a jury trial on all claims so triable. 

Dated: June 9, 2022 Respectfully submitted, 

/ss/ Samera Syeda Ludwig 

 Samera Syeda Ludwig 

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Samera Syeda Ludwig 

L&G LAW GROUP LLP 

175 West Jackson Blvd, Suite 950 

Chicago, Illinois 60604 

Tel: (312) 364-2500 

Fax: (312) 364-1003 

sludwig@lgcounsel.com 

Robert B. Gilmore (admitted pro hac vice) 

Michael A. Petrino (admitted pro hac vice) 

Kevin J. Attridge (pro hac vice forthcoming) 

Susie Kim (admitted pro hac vice) 

Megan Benevento (pro hac vice forthcoming) 

STEIN MITCHELL BEATO & MISSNER LLP 

901 15th Street, N.W., Suite 700 

Washington, D.C. 20005 

Tel: (202) 737-7777 

Fax: (202) 296-8312 

rgilmore@steinmitchell.com 

mpetrino@steinmitchell.com 

kattridge@steinmitchell.com 

susie.kim@steinmitchell.com 

mbenevento@steinmitchell.com 

Attorneys for Plaintiffs 

 

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Eye Care (Cont.)

Drug Name Qty.

PILOCARPINE 1%, 2% OPHTH SOLN 15ML 45

POLYMYXIN-B/TRIMETHOPRIMOPHTH SOLN 30

SULFACETAMIDE NA 10% OPH SOLN 15ML 45

TIMOLOL MALEATE .25% OPHTH SOLN 5ML 15

TIMOLOL MALEATE .5% OPHTH SOLN 5ML 15

TOBRAMYCIN 0.3% OPH SOL 5ML 15

Gastrointestinal Health

Drug Name Qty.

BELLADONNA ALKALOIDS W/PB TABS 180

CIMETIDINE 300MG, 400MG, 800MG TABS 180

DICYCLOMINE 10MG CAPS 270

DICYCLOMINE 20MG TABS 180

ENULOSE SYRUP (10GM/15ML) 711

FAMOTIDINE 20MG TABS 180

FAMOTIDINE 40MG TABS 90

HYOSCYAMINE 0.125MG ORAL DIS TABS 180

HYOSCYAMINE 0.125MG SUBLINGUAL TABS 180

HYOSCYAMINE 0.375MG ER CAPS 180

HYOSCYAMINE SULFATE 0.125MG TABS 180

HYOSCYAMINE SULFATE 0.375MG TABS 180

HYOSCYAMINE SULFATE ORAL DROP 15ML 45

METOCLOPRAMIDE 10MG TABS 180

METOCLOPRAMIDE HCL 5MG/5ML SYRUP 180

RANITIDINE 150MG TABS 180

RANITIDINE 300MG TABS 90

Infectious Treatments

Drug Name Qty. 

AMOXICILLIN 125MG/5ML SUSP 150ML 450

AMOXICILLIN 200MG/5ML SUSP 100ML 150

AMOXICILLIN 250MG, 500MG CAPS 90

AMOXICILLIN 250MG/5ML SUSP 150ML 450

AMOXICILLIN 400MG/5ML SUSP 100ML 300

AMOXICILLIN 400MG/5ML SUSP 50ML 150

CEPHALEXIN 250MG CAPS 84

CEPHALEXIN 250MG/5ML SUSP 100ML 300

CEPHALEXIN 500MG CAPS 90

CIPROFLOXACIN 250MG TABS 42

CIPROFLOXACIN 500MG TABS 60

DOXYCYCLINE HYCLATE 50MG CAPS 90

DOXYCYCLINE HYCLATE 100MG CAPS 60

DOXYCYCLINE HYCLATE 100MG TABS 60

ERYTHROMYCIN 250MG TABS 84

METRONIDAZOLE 250MG TABS 84

METRONIDAZOLE 500MG TABS 42

PENICILLIN VK 125MG/5ML SOLN 200ML 600

PENICILLIN VK 250MG TABS 90

PENICILLIN VK 250MG/5ML SOLN 100ML 300

PENICILLIN VK 500MG TABS 60

SMZ/TMP REGULAR STRENGTH TABS 84

SULFAMETH/TRIMETHOPRIM 800/160 TABS 60

SULFAMETH-TRIMETH SUSP(GRAPE) 450

TETRACYCLINE 250MG, 500MG CAPS 180

Mental Health

Drug Name Qty.

AMITRIPTYLINE 10MG, 25MG TABS 90

AMITRIPTYLINE 50MG, 75MG TABS 90

AMITRIPTYLINE 100MG, 150MG TABS 90

BENZTROPINE 0.5MG TABS 90

BENZTROPINE 1MG TABS 180

BENZTROPINE 2MG TABS 90

BUSPIRONE 5MG, 10MG, 15MG TABS 180

CARBAMAZEPINE 100MG CHEWABLE TABS 360

CARBAMAZEPINE 200MG TABS 300

CITALOPRAM 10MG, 20MG, 40MG TABS 90

CLOMIPRAMINE 25MG CAPS 180

DOXEPIN 10MG, 25MG CAPS 90

DOXEPIN 50MG, 75MG, 100MG CAPS 90

FLUOXETINE 10MG, 20MG CAPS OR TABS 90

FLUOXETINE 40MG CAPS OR TABS 90

FLUPHENAZINE 1MG TABS 180

HALOPERIDOL 0.5MG TABS 180

HALOPERIDOL 1MG, 2MG, 5MG TABS 90

HYDROXYZINE 10MG/5ML SYRUP 540

HYDROXYZINE HCL 10MG, 50MG TABS 90

HYDROXYZINE PAMOATE 25MG, 50MG CAPS 270

IMIPRAMINE 10MG, 25MG, 50MG TABS 90

LITHIUM CARBONATE 300MG CAPS 270

NORTRIPTYLINE 10MG, 25MG CAPS 90

NORTRIPTYLINE 50MG CAPS 180

PAROXETINE 10MG, 20MG TABS 90

PRIMIDONE 50MG TABS 180

PROCHLORPERAZINE 10MG TABS 90

SERTRALINE 25MG TABS 90

THIORIDAZINE 10MG TABS 180

THIORIDAZINE 25MG TABS 90

THIOTHIXENE 2MG CAPS 180

TRAZODONE 50MG, 100MG, 150MG TABS 90

TRIHEXYPHENIDYL 2MG TABS 180

Skin Conditions

Drug Name Qty.

BETAMETHASONE DIP 0.05%, 0.1% CRM 45

BETAMETHASONE VAL. 0.1% OINT 135

ERYTHROMYCIN 2% TOPICAL SOLN 180

FLUOCINOLONE ACET 0.01% SOLN 180

FLUOCINONIDE 0.05% CREAM 90

GENTAMICIN 0.1% CREAM OR OINT 45

HYDROCORTISONE 1%, 2.5% CREAM 90

NYSTATIN CREAM OR OINT 90

NYSTATIN/TRIAMCINOLONE CREAM 45

NYSTATIN/TRIAMCINOLONE CREAM 90

SELENIUM SULFIDE 2.5% SHAMPOO 354

TRIAMCINOLONE 0.025% CREAM 45

TRIAMCINOLONE 0.025% CREAM 240

TRIAMCINOLONE 0.1% CREAM OR OINT 270

TRIAMCINOLONE 0.5% CREAM 45

Thyroid Conditions

Drug Name Qty.

LEVOTHYROXINE TABS ALL STRENGTH 90

METHIMAZOLE 5MG TABS 90

Persons receiving prescription benefits from a publicly funded health care program are ineligible. Membership may be cancelled within 30 days of issue date. For complete 

terms and conditions, call 1-866-WCARD-12 (1-866-922-7312) or visit www.walgreens.com/wcard. Walgreen Co., 200 Wilmot Rd., Deerfield, IL 60015. $12.99 prescriptions are for a 90-day supply of a covered drug at a commonly prescribed dosage. The list of covered drugs is subject to change. Not all prescription drugs are covered by this 

program. State law may prohibit the advertising of controlled substances. If you have a prescription for a controlled substance, please talk to your local pharmacist to see if 

your medication is included in the Prescription Savings Club Formulary. Only prescriptions initially filled in person at a participating pharmacy are eligible for the $12.99 rate; 

refills must also be picked up in-store, but may be ordered in person, online or by phone. This program is not available for prescriptions filled by mail order. See your Walgreens 

pharmacist for more information.

08PM0083

Vitamins and Nutritional Health

Drug Name Qty.

ETHEDENT 0.25MG CHEW TABS 360

ETHEDENT 0.5MG CHEW TABS 90

KLOR-CON 10MEQ TABS 90

KLOR-CON 8MEQ SUST-RELEASE TABS 180

KLOR-CON M10 ER TABS 90

MULTI-VITA-F 0.25MG CHEW TABS 90

MULTI-VITA-F 0.5MG , 1MG CHEW TABS 90

MULTIVITS W/FL 1MG & IRON CHEW TAB 90

NATALCARE GT TABS 90

NATALCARE PLUS TAB(1MG FOLIC ACID) 90

NATATAB FA TABS 90

POTASSIUM CHLORIDE 10% LIQ 1,419

PRENATAL RX TABS 90

VITAMIN D 50000IU CAPS 12

Women’s Health

Drug Name Qty.

CLOMIPHENE CITRATE 50MG TABS 15

ESTRADIOL 0.5MG, 1MG, 2MG TABS 90

ESTROPIPATE 0.625MG (0.75MG) TABS 90

ESTROPIPATE 1.5MG (1.25MG) TABS 90

MEDROXYPROGESTERONE 2.5MG, 5MG TABS 90

MEDROXYPROGESTERONE 10MG TABS 30

Other

Drug Name Qty.

ANUCORT-HC 25MG RECTAL SUPPOS. 12’S 36

CHLORHEXIDINE ORAL RINSE 473ML 1,419

CYTRA-2 SOLN 540

DEXAMETHASONE 0.5MG TABS 180

DEXAMETHASONE 0.75MG TABS 36

MEGESTROL ACETATE 20MG TABS 90

METHYLPREDNISOLONE 4MG DOSPAK 21’S 63

METHYLPREDNISOLONE 4MG TABS 63

OXYBUTYNIN 5MG TABS 180

PHENAZOPYRIDINE 200MG TABS 90

PREDNISOLONE SOD PHOS 15MG/5ML SOL 90

PREDNISONE 10 MG, 20MG, 50MG TABS 90

PREDNISONE 5MG TABS PACK 21’S 63

PREDNISONE 10MG TABS PACK 48’S 144

As of 12/13/07.

Case: 1:20-cv-01853 Document #: 289-1 Filed: 06/09/22 Page 66 of 68 PageID #:6469
EXHIBIT 2

Case: 1:20-cv-01853 Document #: 289-1 Filed: 06/09/22 Page 67 of 68 PageID #:6470
Sample Walgreens Overcharges 

CareFirst BCBS 

Fill Date Drug Name Quantity 

Days 

Supply 

Reported 

U&C 

Total 

Amount Due 

PSC List 

Price Overcharge 

4/12/11 LEVOTHYROXIN TAB 50MCG 90 90 $26.89 $16.56 $12.00 $4.56 10/3/13 HYDROCHLOROT TAB 12.5MG 90 90 $49.99 $49.99 $15.00 $34.99 

1/2/14 HYDROCHLOROT TAB 12.5MG 90 90 $51.99 $51.99 $30.00 $21.99 1/2/14 LISINOPRIL TAB 30MG 90 90 $72.29 $11.93 $10.00 $1.93 1/3/14 METFORMIN TAB 500MG 270 90 $91.46 $13.32 $10.00 $3.32 1/5/14 METFORMIN TAB 850MG 270 90 $95.79 $40.28 $10.00 $30.28 8/2/14 ATENOL/CHLOR TAB 50-25MG 90 90 $36.99 $36.99 $20.00 $16.99 1/5/15 LEVOTHYROXIN TAB 75MCG 90 90 $38.89 $38.89 $20.00 $18.89 

9/22/15 ESTRADIOL TAB 0.5MG 90 90 $31.99 $12.23 $10.00 $2.23 1/27/16 ATENOL/CHLOR TAB 50-25MG 30 30 $18.39 $11.93 $10.00 $1.93 7/24/17 ATENOL/CHLOR TAB 50-25MG 90 90 $43.99 $33.20 $20.00 $13.20 2/19/18 ATENOL/CHLOR TAB 50-25MG 90 90 $42.99 $34.33 $20.00 $14.33 

8/2/18 ESTRADIOL TAB 0.5MG 90 90 $27.99 $18.85 $10.00 $8.85 1/9/19 LISINOP/HCTZ TAB 20-12.5 90 90 $53.89 $53.89 $20.00 $33.89 

1/14/19 LISINOP/HCTZ TAB 20-12.5 30 30 $22.99 $22.99 $10.00 $12.99 5/16/19 ESTRADIOL TAB 0.5MG 90 90 $27.99 $14.79 $10.00 $4.79 8/24/20 ATENOL/CHLOR TAB 50-25MG 90 90 $42.99 $36.40 $20.00 $16.40 

Case: 1:20-cv-01853 Document #: 289-1 Filed: 06/09/22 Page 68 of 68 PageID #:6471