Pigeons are seen resting on signage for Walgreens, owned by the Walgreens Boots Alliance, Inc., in Manhattan, New York City, U.S., November 26, 2021. REUTERS/Andrew Kelly/File Photo Acquire Licensing Rights
Oct 2 (Reuters) – Walgreens (WBA.O) can counter-sue a health insurer for allegedly helping one of the retail pharmacy giant’s former law firms switch sides in a legal fight over prescription drug reimbursements, an Illinois appeals court has ruled.
In a 13-page order, the Illinois First Judicial District Appellate Court on Friday revived the counterclaim that Walgreens brought against plaintiff Health Care Service Corporation in the case.
Health Care Service Corp sued Walgreens in Cook County Circuit Court in 2021 for hundreds of millions of dollars in damages, alleging it had submitted inflated drug prices for reimbursement. The lawsuit, filed by law firm Crowell & Moring, said Walgreens made false statements about its “usual and customary” drug prices.
Walgreens has said Crowell previously advised it on substantially similar matters concerning prescription drug reimbursements. In its counterclaim in the Cook County case, Walgreens contends that Crowell’s alleged shift to become its adversary was “aided and abetted” by Health Care Service Corp.
The lawsuit is part of sprawling, multi-front legal battle over claims that Walgreens for years schemed to enrich itself through false drug-price reimbursement billings. Walgreens has denied the allegations.
Crowell, which is not a defendant in the Health Care Service Corp case, has denied violating any professional ethics rules. A representative for the Washington-based firm declined to comment on Monday.
Chicago-based Health Care Service Corp, which markets itself as the largest customer-owned health insurer in the United States, did not immediately respond to a similar request.
A spokesperson for Deerfield, Illinois-based Walgreens on Monday declined to comment.
Lawyers for Health Care Service Corp had argued that Walgreens failed to show any “knowing and substantial assistance” by the insurer to help Crowell allegedly breach its duty to Walgreens.
A Cook County judge in December rejected Walgreens’ counterclaim. The court found Walgreens’ allegation amounted to “nothing more than a motion to disqualify Crowell from representing HCSC in this litigation.”
The appeals panel in its ruling on Friday said Walgreens “sufficiently stated a cause of action for aiding and abetting” and the lower court was wrong to dismiss the pharmacy’s claim.
In one of the related cases facing Walgreens, insurer Humana (HUM.N) has asked a Washington, D.C., federal judge to enforce a $642 million arbitration award against the pharmacy chain.
The case is Health Care Service Corp v. Walgreen Co, Appellate Court of Illinois, First Judicial District, No. 2023 IL App (1st) 230020-U.
For HCSC: Kent Gardiner of Crowell & Moring; Kirstin Ives of Falkenberg Ives
For Walgreens: Jeffrey Bushofsky of Ropes & Gray
Read more:
Walgreens accused of ‘grossly inflated’ fee bid in health plans’ lawsuit
Walgreens fights ‘staggering’ $642 mln arbitration award to Humana
Reporting by Mike Scarcella
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