Food City allegedly failed in its duties under the Controlled Substances Act to resolve prescription red flags and refuse to fill unusual or medically unnecessary prescriptions.

Today, the nationally recognized law firm Baron & Budd announced the U.S. Department of Justice has obtained an $8.4 million settlement with Food City in a lawsuit brought by a whistleblower alleging violations of the False Claims Act and the Controlled Substances Act. The whistleblower in this case, a former Food City pharmacy employee, was represented by Baron & Budd.

The whistleblower alleged that, despite regularly reporting his concerns to management, the Food City pharmacy repeatedly dispensed controlled substances prone to abuse without a legitimate medical purpose resulting in prescriptions that were not medically necessary being filled and billed to government programs.

Taxpayer-funded health care programs, such as Medicare, Medicaid, and Tricare cover the costs of valid prescriptions issued for legitimate medical purposes. These programs ended up paying for inappropriate opioid prescriptions dispensed throughout Georgia, Kentucky, Tennessee, and Virginia because Food City intentionally and knowingly disregarded its duties to properly vet prescriptions and ensure they only dispensed drugs for a legitimate medical purpose.

“We are pleased that our client has been vindicated and will be rewarded for his persistence and courage to come forward and expose the harmful practices of the Food City pharmacies,” said Baron & Budd Shareholder Will Powers. “Not only have millions of lives been lost to the opioid epidemic in our country, but millions of taxpayer dollars from government programs have been squandered on fraudulent opioid prescriptions.”

The Baron & Budd whistleblower team represented the whistleblowers in a groundbreaking lawsuit against Rite Aid for violations of the False Claims Act and the Controlled Substances Act. In July 2024, the U.S. Department of Justice obtained a $409 million settlement in the case against Rite Aid which was the first of its kind to use the False Claims Act to bring a claim against a major retail pharmacy for its opioid dispensing practices.

“We have once again held a major retail pharmacy accountable for fraud, thanks to the effective partnership between the Department of Justice and whistleblowers,” said Baron & Budd shareholder Scott Simmer. “This action should serve as a clear warning to retail pharmacies that the DOJ and whistleblowers will persist in their efforts to uncover harmful practices that jeopardize public safety and waste taxpayer dollars.”

The whistleblower representation team at Baron & Budd has more than 50 years of experience representing dozens of clients in government fraud cases. They have returned more than $6 billion to federal and state agencies with whistleblower recovery shares as high as 50%.

About Baron & Budd, P.C.

With more than 40 years of experience, Baron & Budd has the expertise and resources to handle complex litigation throughout the United States. As a law firm that takes pride in remaining at the forefront of litigation, Baron & Budd has spearheaded many significant cases for hundreds of public entities and tens of thousands of individuals. Since the firm was founded in 1977, Baron & Budd has achieved substantial national acclaim for its work on cutting-edge litigation, trying hundreds of cases to verdict and settling tens of thousands of cases in areas of litigation as diverse and significant as dangerous and highly addictive pharmaceuticals, defective medical devices, asbestos and mesothelioma, wildfires, environmental contamination, fraudulent banking practices, e-cigarettes, motor vehicles, federal whistleblower cases, and other consumer fraud issues.

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