- Compliance & Ethics
- Litigation / Arbitration
- Posted Jan 13, 2025
Rolf Martin Lang LLP Suit Against PBMs Results in $121 Million Settlement
Rolf Martin Lang LLP is pleased to announce a significant victory in a whistleblower lawsuit against Rite Aid Corporation and several of its insurance and pharmacy benefit manager (PBM) subsidiaries, resulting in a $121 million recovery for the Medicare Part D program. (See DOJ Press Release).
Groundbreaking Whistleblower Lawsuit Filed
In 2021, Rolf Martin Lang LLP filed the lawsuit on behalf of whistleblower Glenn Rzeszutko under the qui tam provisions of the federal False Claims Act (FCA). These provisions allow private individuals to sue on behalf of the United States. The case, United States ex rel. Rzeszutko v. Rite Aid Corporation et al., No. 5:21-CV-574 (N.D. Ohio), alleged that the defendants defrauded the Medicare Part D program by failing to accurately report prescription drug rebates, resulting in hundreds of millions of dollars in losses over several years.
Shining a Light on PBM Practices
This case brought long-overdue scrutiny to the secretive practices of PBMs, middlemen in the pharmaceutical industry who have faced mounting criticism for their role in inflating prescription drug costs. Rolf Martin Lang LLP’s innovative legal strategy uncovered fraudulent tactics by PBMs that Medicare had not previously identified, exposing how these practices siphoned tens of millions of taxpayer dollars annually.
Federal Investigation & Record Settlement
Following an in-depth federal investigation, the government elected to intervene in the case. This led to a settlement of $101 million, plus an additional $20 million general unsecured claim in the defendants’ bankruptcy proceedings. The settlement reflects the defendants’ financial circumstances but could have been substantially higher without their bankruptcy proceedings.
Victory for Taxpayers & a Foundation for Future Accountability
This settlement represents a significant win for Medicare and U.S. taxpayers, as well as for healthcare consumers and providers. Fraudulent PBM practices divert funds that should be used to reduce healthcare and prescription drug costs. The legal theories developed by Rolf Martin Lang LLP in this case are expected to shape future litigation to recover funds from PBMs, benefiting both public programs and private entities such as health plans and sponsors. (See, e.g., here).
Our Commitment to Justice
Rolf Martin Lang LLP remains dedicated to holding PBMs accountable and ensuring that taxpayer dollars are used as intended—to support affordable and accessible healthcare for all. This result underscores our commitment to protecting healthcare providers, consumers, and the integrity of government programs.