Department of Justice Obtains $409 Million Settlement in Baron & Budd Whistleblower Lawsuit Against Rite Aid

The lawsuit is the first of its kind using the False Claims Act to bring a claim against a major retail pharmacy for its opioid dispensing practices.

WASHINGTON--(BUSINESS WIRE)--Today, the nationally recognized law firm Baron & Budd announced the U.S. Department of Justice has obtained a settlement against Rite Aid in a groundbreaking lawsuit brought forth by whistleblowers alleging violations of the False Claims Act and the Controlled Substances Act. The whistleblowers in this case are former Rite Aid pharmacy employees represented by Baron & Budd. The settlement provides that the government will be paid $7.5 million and have an allowed, unsubordinated, general unsecured claim of $401.8 million in Rite Aid’s pending bankruptcy case.

According to the suit, the whistleblowers alleged that Rite Aid incentivized and pressured its pharmacists to fill all prescriptions – regardless of validity – which resulted in prescriptions that were not medically necessary being filled and billed to government programs.

Taxpayer-funded health care programs, such as Medicare, Medicaid, and Tricare, cover the costs of valid prescriptions issued for legitimate medical purposes, but these programs ended up paying out billions of dollars for medically unnecessary opioid prescriptions filled by Rite Aid pharmacies.

“We are pleased that our clients will be rewarded for their courage to come forward and expose the harmful practices of major retail pharmacies, like Rite Aid,” said Baron & Budd Shareholder Will Powers. “Millions of Americans have been impacted by the opioid epidemic resulting from the irresponsible operations of Rite Aid and other pharmacies.”

The suit alleged that Rite Aid had the data and information to enact safe and responsible opioid dispensing practices, but consistently disregarded its duties to properly identify, investigate, and resolve red flag prescriptions before dispensing. The settlement represents the first successful whistleblower case against a major pharmacy chain for its opioid-related conduct.

“Once again, we have successfully prosecuted a major corporation for fraud through the public/private partnership between the Department of Justice and whistleblowers,” said Baron & Budd shareholder Scott Simmer. “This should serve as a warning to retail pharmacies that the DOJ and whistleblowers will continue to work together to expose the destructive practices that endanger American lives and waste taxpayer dollars.”

Baron & Budd’s whistleblower representation team has more than 40 years of experience representing dozens of clients in government fraud cases. They have returned more than $6 billion to federal and state agencies with whistleblower recovery shares as high as 50%.

About Baron & Budd, P.C.

With more than 40 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of public entities and tens of thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse and significant as dangerous and highly addictive pharmaceuticals, defective medical devices, asbestos and mesothelioma, wildfires, environmental contamination, fraudulent banking practices, e-cigarettes, motor vehicles, federal whistleblower cases, and other consumer fraud issues.