Home Market News Walgreens Counters $1B Arbitration Award Amid Contract Dispute Over COVID-19 Business Deal

Walgreens Counters $1B Arbitration Award Amid Contract Dispute Over COVID-19 Business Deal

Walgreens Counters $1B Arbitration Award Amid Contract Dispute Over COVID-19 Business Deal

In a clash of titans, the retail pharmacy behemoth Walgreens Boots Alliance IncWBA is taking on a legal battle against an arbitration award of nearly $1 billion granted to telehealth provider PWNHealth after a fallout in a COVID-era contract.

PWNHealth, also known as Everly Health Solutions, stands steadfast in seeking validation of this monumental arbitration award.

Walgreens vehemently disputes the $987 million award, claiming it to be grossly excessive and surpassing the permissible damages outlined in the contract by twelvefold, as reported by Reuters recently.

The crux of the disagreement traces back to allegations from Everly Health that Walgreens breached the terms of their COVID-related agreement by rerouting COVID-19 tests from Everly’s physician network to its internal operations. Walgreens, on the other hand, asserts that the rift emerged when it began utilizing its own pharmacists to manage test orders.

Everly contends that Walgreens persisted in showcasing its trademark on its platform and redirected tests away from the agreed-upon workflow, ultimately resulting in the initiation of arbitration proceedings in 2022.

Walgreens maintains that the arbitration award issued by David Brodsky of the American Arbitration Association should not be challenged and should stand as is.

Pushing back, Walgreens refutes accusations of breaching its pact with Everly, arguing that the arbitrator exceeded his jurisdiction by disregarding the liability cap specified in the contract.

The company underlines that its actions were inadvertent oversights, not deliberate transgressions.

Everly conveyed contentment with the arbitration outcome, moving promptly to secure its confirmation in court. Meanwhile, Walgreens remains steadfast in its stance, underscoring the need to annul the arbitration award due to its exorbitant size and alleged judicial overstep.

Earlier this year, Walgreens consented to a $360 million settlement with healthcare insurer Humana Inc HUM to resolve a lawsuit centered on allegations of overcharging prescription drug reimbursements.

This legal tussle stemmed from a $642 million award granted to Humana in a private arbitration against Walgreens back in 2022.

Humana had accused Walgreens of inflating prescription drug prices over an extended period. Previously challenging this award, Walgreens has now opted for an amicable resolution.

Price Action: WBA shares are currently up 2.01% at $20.92 as per the most recent data on Wednesday.

Disclaimer: This content was partly generated with AI tools and underwent scrutiny and approval by Benzinga editors.

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