Retailer Ahold Delhaize USA has agreed to pay $40m to the US and several states to settle allegations it submitted inflated prescription drug prices to federal healthcare schemes.
The allegations centre on prescription savings programmes run by the company’s supermarket pharmacy chains, which include Giant, Hannaford, Stop & Shop and Food Lion.
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These programmes offered enrolled members discounted prices on prescription medicines.
The US Government alleged that these discounted rates ought to have been submitted as “usual and customary” prices on claims made to Medicare Part D, Medicaid and TRICARE.
Such “usual and customary” figures act as ceiling prices for payments made to pharmacies under the relevant healthcare programme payment formulas.
According to the allegations, Ahold Delhaize pharmacies did not correctly report the discounted prices as their “usual and customary” prices, leading to the programmes making inflated payments.
Under the $40m settlement, $32.9m will go to the federal government, with the remaining amount allocated to the participating states.
Medicaid funding is shared between the federal government and individual states.
The settlement also resolves allegations brought under the qui tam, or whistleblower, provisions of the False Claims Act by Lawrence LaBenne, a pharmacist employed at an Ahold Delhaize supermarket in Pennsylvania.
As part of the settlement, LaBenne will receive $6.08m from the federal portion of the recovery.
The case was handled jointly by the Civil Division and Commercial Litigation Branch, Fraud Section of the US Department of Justice, along with the US Attorney’s Office for the Western District of Pennsylvania.
The US Department of Health and Human Services, the Defense Health Agency and state Medicaid programmes also provided support in the matter.
The settlement is part of continuing efforts by US authorities to tackle healthcare fraud under the False Claims Act.
The US Justice Department Civil Division Assistant Attorney General Brett A Shumate said: “Federal healthcare programmes rely on pharmacies reporting accurate pricing information used in the applicable payment formulas.
“If pharmacies report inflated ‘usual and customary’ prices on claims to federal healthcare programmes, the programmes pay more than they should on those claims.”
