Walgreens seeks to settle case over dumped documents

Walgreens is hoping to settle their case over patient privacy.

Bob Segall/Eyewitness News

Indianapolis - New developments suggest another drug store giant may face punishment for trashing your privacy. Now, Walgreens wants to settle its case - whether the state wants to or not.

13 Investigates discovered personal information in drugstore dumpsters in Indiana and across the country. WTHR exposed the problem at CVS and Walgreens pharmacies three years ago, and the Indiana attorney general's office has been investigating ever since.

Walgreens says it finally has a settlement with the state - or does it?

"We reached an agreement on the material terms of a settlement agreement," Walgreens attorney Stacy Cook told the Indiana Pharmacy Board Monday morning.

The attorney general's office disagreed.

"There was never an agreement that was reached," said Deputy Attorney General Morgan Wills.

The attorneys met with the pharmacy board at Walgreen's request because the nation's second-largest drug store retailer says it had a deal the attorney general's office backed out on.

"It's simply that they've changed their mind," Cook said.

The attorney general's office admits it had started to negotiate terms of a settlement with Walgreens in January, but the state later decided to halt its settlement negotiations when the federal government announced a $2.25 million settlement with Walgreens' rival CVS.

The CVS settlement was announced in February by the U.S. Department of Health and Human Services' Office of Civil Rights and the Federal Trade Commission. The agencies reached the settlement after reviewing WTHR's Prescription Privacy investigation, and the CVS deal is the largest fine in U.S. history for a company accused of violating patient privacy.

In legal filings submitted to the Indiana Pharmacy Board, the attorney general's office says federal regulators are now focusing their attention on alleged patient privacy violations committed by Walgreens, which could have an impact on the attorney general's case here in Indiana.

"We do believe the Federal Trade Commission and Office of Civil Rights plan on settling their matters with Walgreens in the near future, based on the information we've received from them," Wills told board members.

A spokesman for the federal agencies said he is unable to comment on the Walgreens investigation, and Walgreens says it is unaware of any pending settlement.

"As of Friday, we have not received any communication from the federal government about any of the cases," said Cook.

"We have word from a contact at the Office of Civil Rights saying they plan to contact Walgreens very soon to begin the settlement negotiation process," Wills responded.

That settlement process could result in a large federal fine against Walgreens. The pharmacy giant doesn't want to wait for that before settling complaints filed by the Indiana attorney general. Walgreens says if the state no longer wants to offer a settlement, it wants an immediate hearing to defend itself and to prove the company did try to protect patient privacy.

"The more time goes by, we have the potential to lose witnesses and evidence that my clients need to defend themselves," Cook said.

Board members agreed with Walgreens, saying the cases - first filed by the attorney general's office two years ago -- have dragged on far too long.

"If we can't [settle] this today, we need to do something to get it in gear and get it done ASAP because I think everybody's waited long enough," said board president Del Fanning.

The board set a final hearing date for July, so the state's allegations will be decided this summer, unless the two sides reach a formal settlement before then.

The pharmacy board denied a Walgreens motion that could have forced the state to accept preliminary settlement terms Walgreens and deputies from the attorney general's office discussed this winter. The undisclosed settlement would have prevented the state from proceeding with further regulatory litigation against Walgreens drug stores and pharmacists accused of jeopardizing patient confidentiality.