Walgreens to settle Humana arbitration dispute for $360M

Walgreens has agreed to a $360 million settlement in arbitration dispute with Humana, the company disclosed late last week.

The parties reached the agreement on Dec. 29, Walgreens said in a filing with the Securities and Exchange Commission, and the retail pharmacy giant has paid out $150 million of its obligations as of December.

Humana initiated the arbitration process in 2019, alleging that Walgreens had spent more than a decade overcharging it inflated prices for medications. A major factor was Walgreens' pharmacy savings club, which aims to connect uninsured or underinsured people with lower prices on drugs.

The insurer alleged that the pharmacy chain made that lower pricing available without accounting for it in its usual and customary prices, which led to higher claims payouts.

In 2021, an arbiter awarded Humana a $642 million payout in the dispute. Walgreens challenged that award in federal court last year, saying the ruling was a "miscarriage of justice." Humana instead urged the court to uphold the ruling.

Given the late December settlement, the District of Columbia district court has dismissed that case as of Friday.

Walgreens is also paying out billions in settlements related to its role in the opioid epidemic, along with other pharmacies including CVS Health. It has navigated rough financial waters over the past several quarters.