Walgreens Stock Tumbles on DOJ Lawsuit Over ‘Millions’ of Alleged Illegal Prescriptions

Key Takeaways

Walgreens Boots Alliance (

WBA

) shares sank Tuesday, the first day of trading since the Department of Justice (DOJ) on Friday announced a lawsuit accusing the pharmacy chain of dispensing “millions of unlawful prescriptions” that had no legitimate medical purpose.

The suit alleges that Walgreens pressured its pharmacists to fill prescriptions quickly, leading to opioids and other medications being given out for prescriptions that had “clear red flags” indicating they were “highly likely to be unlawful.”

The DOJ accused Walgreens of filling prescriptions that had no medical backing, were invalid, or “were not issued in the usual course of professional practice” since roughly August 2012. The illegal prescriptions would violate the Controlled Substances Act, and any prescription for which
Walgreens
received compensation from federal health care programs would violate the False Claims Act.

Walgreens Calls Suit ‘Attempt To Enforce Arbitrary “Rules” ‘

Walgreens said Friday that it stands behind its pharmacists as the government works to put them in a “no-win situation.” The chain called the lawsuit an “attempt to enforce arbitrary ‘rules’ that do not appear in any law or regulation.”

Four whistleblowers who were former Walgreens employees made complaints about the prescriptions, the DOJ said. The agency accused Walgreens of helping to “fuel” the prescription opioid epidemic that has led to hundreds of thousands of overdose deaths across the country.

Walgreens shares were down more than 12% recently at $10.95 on Tuesday, losing some of the gains from a rally following the
retailer’s last earnings report
earlier this month. But the stock has lost half of its value in the last year.

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