Walgreens fights a ‘staggering’ $642 mln arbitration award to Humana. Walgreen Co., a national retail pharmacy chain, has urged a U.S. judge to dismiss an arbitrator’s decision of more than $642 million to Humana Health Plan Inc. in a drug-pricing dispute, calling it a “staggering” “miscarriage of justice.”
Walgreens filed a lawsuit against Humana on Friday in Washington, D.C., federal court over prescription drug reimbursement contracts.
Humana (HUM.N) separately requested the U.S. court confirm the award. Walgreens overcharged Humana for over a decade due to “millions of falsely-inflated” prescription medicine prices.
Walgreens, a Walgreens Boots Alliance (WBA.O) unit, filed that the arbitrator “rewrote” its contracts with Humana. It accused the JAMS arbitrator of employing a defective model to calculate damages.
Walgreens also alleged that Crowell & Moring should not have represented Humana after counseling Walgreens years earlier on prescription pricing issues based on Humana’s 2019 arbitration.
“The result was that the arbitrator awarded a massive windfall to Humana,” Walgreens’ Reed Smith attorneys wrote in the court filing.
Monday’s message to Humana’s Louisville, Kentucky, spokeswoman went unanswered.
Walgreens did not respond. Walgreens’ second-quarter revenue was $27.6 billion.
In 2021, Walgreens sued Crowell in the District of Columbia Superior Court for indemnification from any arbitral ruling, an injunction, and disgorgement of the firm’s Humana profits.
Walgreens failed to prevent Crowell from representing Humana. Walgreens appeals.
Washington, D.C.-based Crowell denies any conflict of interest in representing Humana against former client Walgreens.
Crowell’s spokeswoman termed Walgreens’ ethics claim “meritless” on Monday and said the firm was “confident that the arbitrator’s thorough and well-reasoned award will be affirmed.”
Walgreens’ appeal to invalidate Humana’s award claimed it has long listed its retail prices as “usual and customary” on reimbursement applications. Walgreens claimed Humana knew its discount drug-price program was not “usual and customary” submissions.
Monday’s message to arbitrator Elliot Gordon went unanswered.
Walgreen Co. v. Humana Health Plan Inc., U.S. District Court, District of Columbia, 1:22-cv-00307-ACR.
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