Major grocery operator on the hook for $40M over pharmacy monkey business; $6M windfall for whistleblower
One of the largest food retailers in the world—and the fourth biggest in this country—got itself into hot water with the U.S. Department of Justice for allegedly cheating on drug prices it charges to federal healthcare programs.
Ahold Delhaize USA has agreed to settle the case by paying $40 million to the federal government as well as to affected states and the whistleblower who brought the case to light.
The company, which has its American headquarters in Quincy, Mass., operates Stop & Shop and Hannaford in the Northeast, Food Lion and Giant Food in the Mid-Atlantic and Southeast, and other grocery chains.
DOJ says Ahold Delhaize violated the False Claims Act by reporting inflated “usual and customary” prices on claims to federal healthcare programs, presumably under the federal 340B drug-pricing program.
340B-participating pharmacies are supposed to supply discounted drugs to providers and prescribers serving low-income patients.
‘Integrity of taxpayer-funded programs at risk’
In a news release posted by a regional DOJ attorney’s office June 10, HHS investigator Scott Lampert takes the opportunity to warn other pharmacies in federal healthcare programs that they “must report truthful prices. Inflating those prices, as alleged here, puts the integrity of taxpayer-funded programs at risk.”
Of the $40 million resolution, the federal share is $32.9 million. The rest will be paid to states participating in the settlement, DOJ says.
Whistleblower rewarded
The agency credits a pharmacist at an Ahold Delhaize supermarket in Pennsylvania as the whistleblower who brought the alleged fraud to light.
The pharmacist, Lawrence LaBenne, is now set to bank $6,083,587 from the federal share of the settlement, DOJ says.
“The investigation and resolution of this matter illustrates the government’s emphasis on combating healthcare fraud,” DOJ states. “One of the most powerful tools in this effort is the False Claims Act.”
The full announcement is here, and updated coverage is available from Newsweek, the New York Post and TheStreet.
Dave P. has worked in journalism, marketing and public relations for more than 30 years, frequently concentrating on hospitals, healthcare technology and Catholic communications. He has also specialized in fundraising communications, ghostwriting for CEOs of local, national and global charities, nonprofits and foundations.