Supermarket operator Ahold Delhaize USA has agreed to pay $40 million to settle allegations that it reported inflated prescription drug prices to US government healthcare programmes, causing taxpayers to pay more than they should have, reported The Street.

The settlement, announced by the US Department of Justice (DOJ), relates to pharmacy billing practices and not to the prices shoppers paid at grocery stores. Federal authorities alleged that the company failed to report lower prescription prices offered through its discount programmes when submitting pricing information to government healthcare programmes.

Ahold Delhaize USA operates several major grocery chains across the United States, including Food Lion, Giant, Hannaford and Stop & Shop. Many of these stores run prescription savings programmes that offer discounted medicines to enrolled customers.

Allegations against Ahold Delhaize

According to the Justice Department, Ahold Delhaize did not treat discounted prescription prices offered to customers through its savings programmes as its “usual and customary” prices when billing federal healthcare programmes, including Medicare Part D, Medicaid and Tricare, reported The Street.

Federal authorities alleged that because lower prices were not reported, government healthcare programmes reimbursed pharmacies at higher amounts than they otherwise would have paid.

The settlement does not include any admission of wrongdoing by the company. It resolves allegations that government programmes paid more for certain prescriptions because they did not receive accurate pricing information.

Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division said accurate pricing information is essential for taxpayer-funded healthcare programmes, reported The Street.

“Federal healthcare programs rely on pharmacies reporting accurate pricing information used in the applicable payment formulas,” Shumate said. “When pharmacies report inflated ‘usual and customary’ prices, federal healthcare programs pay more than they should,” she added, according to The Street report. 

Inaccurate medicaid practices

Programmes such as Medicare, Medicaid and Tricare serve millions of Americans and rely on pharmacies to provide accurate pricing data when determining reimbursement amounts.

Scott J Lampert, acting deputy inspector general for investigations at the US Department of Health and Human Services Office of Inspector General, said inaccurate pricing practices can weaken the integrity of taxpayer-funded healthcare systems, reported The Street.

The allegations first came to light after a whistleblower complaint filed by pharmacist Lawrence LaBenne, who worked at an Ahold Delhaize supermarket pharmacy in Pennsylvania. Under the US False Claims Act, private individuals can bring cases on behalf of the government if they believe public funds have been improperly used.