Ahold Delhaize Agrees to Pay $40 Million to Resolve Allegations of Inflated Prescription Drug Pricing

Key Takeaways

• $40 Million Settlement: Ahold Delhaize USA agreed to pay $40 million to resolve allegations involving prescription drug pricing reported to federal healthcare programs.
• Discount Programs at Issue: The government alleged that discounted prices offered through pharmacy savings programs should have been reported as "usual and customary" prices.
• Claims Impacted: The allegations involved reimbursement claims submitted to Medicare Part D, Medicaid, and TRICARE.
• Federal Share: The federal government will receive approximately $32.9 million, with the remainder distributed to participating states.

Deep Dive

A discount program is supposed to lower the price of a prescription. The dispute at the center of a newly announced $40 million settlement is what happens when those discounts exist for customers but are not reflected in the prices reported to government healthcare programs.

The U.S. Department of Justice said that Ahold Delhaize has agreed to pay $40 million to resolve allegations that pharmacies operating inside several of its supermarket chains reported inflated drug prices on claims submitted to Medicare Part D, Medicaid, and TRICARE.

The allegations focus on the company's prescription savings programs, which offered enrolled customers discounted prices on certain medications. According to the government, those discounted prices should have been reported as the pharmacies' "usual and customary" prices when claims were submitted to federal healthcare programs.

That distinction matters because usual and customary prices are not simply another data point on a reimbursement form. In many cases, they function as a ceiling on what government programs will pay pharmacies for prescriptions. If the reported price is higher than the price routinely available to customers, the reimbursement calculation can be affected.

Federal prosecutors contend that is exactly what happened. The government alleged that pharmacies operated by Ahold Delhaize under supermarket banners including Giant, Hannaford, Stop & Shop, Food Lion, and others failed to report the discounted prices available through their savings programs as their usual and customary prices. As a result, Medicare Part D, Medicaid, and TRICARE allegedly paid more on certain prescription claims than they otherwise would have.

Ahold Delhaize agreed to resolve the allegations without litigation continuing. The Justice Department's announcement did not include any admission of liability by the company.

Pricing at the Center of Enforcement

The case reflects a line of enforcement that has received increasing attention over the past decade. Rather than focusing on whether a drug was dispensed appropriately or whether a claim was medically necessary, these investigations often turn on how pharmacies characterize and report pricing information.

The government's position is straightforward: when pharmacies make discounted prices broadly available through savings programs, those prices may become the benchmark that must be reported to federal healthcare programs.

"Federal healthcare programs rely on pharmacies reporting accurate pricing information used in the applicable payment formulas," Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division said in announcing the settlement. "If pharmacies report inflated 'usual and customary' prices on claims to federal healthcare programs, the programs pay more than they should on those claims."

The Justice Department's announcement also included statements from U.S. Attorney Troy Rivetti for the Western District of Pennsylvania and Acting Deputy Inspector General for Investigations Scott J. Lampert of the Department of Health and Human Services Office of Inspector General, both of whom emphasized the government's commitment to pursuing alleged misconduct involving taxpayer-funded healthcare programs.

Of the $40 million settlement, approximately $32.9 million will go to the federal government. The remaining funds will be distributed among participating states. That allocation reflects the structure of Medicaid itself. Unlike Medicare Part D and TRICARE, Medicaid is jointly funded by federal and state governments, giving both levels of government a financial stake when reimbursement disputes arise.

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