Walgreen Co. should face whistleblowers’ claims that the company violated the False Claims Act by engaging in a kickback scheme by improperly accepting coupons for Medicare patients’ drugs, a federal district court said.

Whistleblowers Elmer Mosley and Pharmaleta LLC contend that Walgreens knowingly accepted manufacturer coupons that were clearly marked as ineligible for Medicare patients. The payment reduction for Medicare patients is an illegal inducement to get them to buy brand-name drugs instead of less expensive competing brands or generic versions, they allege.

Walgreens said these claims are precluded by the FCA’s public disclosure bar for being based on a ...

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