A class action lawsuit was filed against Walgreens Boots Alliance (WBA) by Levi & Korsinsky on January 30, 2025. The plaintiffs (shareholders) alleged that they bought WBA stock at artificially inflated prices between April 2, 2020 and January 16, 2025 (Class Period) and are now seeking compensation for their financial losses. Investors who bought Walgreens Boots Alliance stock during that period can click here to learn about joining the lawsuit.
Walgreens Boots Alliance operates as an integrated healthcare, pharmacy, and retail chain serving the daily needs of customers and patients. The company runs retail chains throughout the U.S. and internationally under the names “Walgreens” and “Boots.”
The company’s false claims about implementing and maintaining compliance with various federal laws is at the heart of the current complaint.
Walgreens Boots Alliance’s Misleading Claims
According to the lawsuit, WBA and six of its current and/or former senior officers (Individual Defendants) repeatedly made false and misleading public statements throughout the Class Period. Particularly, they are accused of omitting truthful information about the Company’s compliance with certain federal laws, and ancillary issues, from SEC filings and related material.
For instance, during the Class Period, Walgreens reiterated that it had adopted a Code of Conduct and Business Ethics that ensured all employees, officers, and directors adhere to guidelines that deter wrongdoing, while promoting honesty and ethical conduct.
Furthermore, in the Corporate Social Responsibility (CSR) Report and ESG Report released in 2021 and 2022, respectively, the company stated that it was committed to working in co-ordination with government and business partners to implement addiction mitigation initiatives. Plus, WBA stated that its board of directors continuously monitored the risks related to dispensing of prescription opioid medication and efforts to help combat overdose-related deaths.
However, subsequent events (discussed below) revealed that the defendants willfully misled investors about the measures taken to comply with federal laws related to prescription medicine disbursement and their reimbursement techniques.
Plaintiffs’ Arguments
The plaintiffs maintain that the defendants deceived investors by lying and withholding critical information about the business practices and prospects during the Class Period. Importantly, the defendants are accused of misleading investors about the company’s compliance practices with certain federal laws.
The information became clear on January 17, 2025, when the Department of Justice (DOJ) announced that it had filed a civil complaint against Walgreens Boots. The complaint accused WBA of dispensing millions of unlawful prescriptions in violation of the Controlled Substances Act (CSA) and then sought reimbursement for many of them from various federal health care programs in violation of the False Claims Act (FCA). Following the news, WBA stock fell 9.2% on January 21.
The DOJ mentioned that the company carried out such practices from August 2012 until present, allegedly filing millions of prescriptions for controlled drugs that lacked a legitimate medical purpose, were not valid, and/or were not issued in the usual course of professional practise.
The complaint alleged WBA of prescribing “dangerous and excessive quantities of opioids, prescriptions for early refills of opioids, and prescriptions for the especially dangerous and abused combination of drugs known as the ‘trinity,’ which is made up of an opioid, a benzodiazepine and a muscle relaxant.” The complaint also accused WBA of failing to comply with the applicable laws despite knowing its obligations.
To conclude, the defendants allegedly misled investors about following ethical code of conduct and implementing and maintaining compliance with various applicable federal laws. In the past year, WBA stock has lost 35.4%.
