Walgreens Boots Alliance Stock Takes a Hit Amid Regulatory Woes
The pharmacy giant’s shares plummeted today after the Department of Justice (DOJ) filed a lawsuit alleging that Walgreens dispensed millions of unlawful prescriptions. As of 10:26 a.m. ET, the stock had dropped a staggering 12.7%.
A Familiar Pattern of Trouble
This isn’t the first time Walgreens has found itself in hot water with regulators. Just two years ago, the company agreed to pay $5.7 billion over 15 years to settle a lawsuit related to opioid prescriptions. Now, the DOJ is accusing Walgreens of filling prescriptions without a valid medical purpose since 2012.
Red Flags Ignored
According to the complaint, Walgreens pharmacists filled millions of controlled substance prescriptions despite clear red flags indicating they were likely unlawful. Furthermore, the company allegedly pressured its pharmacists to fill these prescriptions, putting profits over patient safety.
Uncertainty Surrounds Potential Fine
While the exact amount of the lawsuit is unknown, Walgreens is accused of violating the Controlled Substances Act and the False Claims Act. This new legal battle could deal a significant blow to the company’s recovery efforts.
Recovery Efforts Derailed
Walgreens has been struggling to regain its footing after a dismal 2024, marked by a 64% stock decline, a multibillion-dollar write-down, and a sharp decline in profits. Although the company’s first-quarter earnings report showed signs of stabilization, this latest lawsuit could be a major setback.
Investors on High Alert
As Walgreens navigates this legal challenge, investors should keep a close eye on the DOJ complaint. The company’s high dividend yield is particularly at risk, making it crucial for Walgreens to protect this key aspect of its appeal.
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