Ahold Delhaize USA Inc., the Quincy, Massachusetts-based parent company of grocery chains including Stop & Shop, Giant, Hannaford and Food Lion, has agreed to pay $40 million to resolve allegations that it violated the False Claims Act by reporting inflated 'usual and customary' prescription drug prices on claims submitted to federal healthcare programs.
The Department of Justice announced the settlement on June 10, 2026, resolving allegations that Ahold Delhaize pharmacies operating prescription savings programs failed to report discounted member prices as their 'usual and customary' prices when billing Medicare Part D, Medicaid and TRICARE. Reported 'usual and customary' prices serve as ceiling prices on payments to pharmacies under federal program payment formulas. By reporting inflated figures, the pharmacies caused the programs to pay more than they should have on prescription claims.
The Allegations
According to the Justice Department, Ahold Delhaize supermarkets with in-store retail pharmacies operated prescription savings programs under which enrolled members received discounted prices on prescription drugs. The United States contended that, in light of the features and operations of those savings programs and the applicable Medicare Part D, Medicaid and TRICARE program requirements, the discounted prices should have been reported as 'usual and customary' prices on claims submitted to those programs.
Instead, prosecutors alleged, Ahold Delhaize pharmacies reported the higher, pre-discount prices, prompting the government to pay inflated reimbursements. The practice allegedly occurred across the company's supermarket chains, including Stop & Shop, Giant, Hannaford, Food Lion and others.
Whistleblower and Settlement Breakdown
The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Lawrence LaBenne, a pharmacist at an Ahold Delhaize supermarket in Pennsylvania. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. LaBenne will receive $6,083,587 from the federal share of the settlement.
Of the $40 million settlement, the federal share is $32.9 million and the remainder will be paid to states participating in the settlement. The qui tam case is captioned U.S. ex rel. LaBenne v. Koninklijke Ahold Delhaize N.V., et al., Civil Action No. 18-CV-925 (W.D. Pa.).
Government Response
'Federal healthcare programs rely on pharmacies reporting accurate pricing information used in the applicable payment formulas,' said Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division. 'If pharmacies report inflated usual and customary prices on claims to federal healthcare programs, the programs pay more than they should on those claims.'
'Pharmacies are trusted with charging the contracted prescription prices to Medicare and Medicaid and not unfairly and unlawfully taking advantage of the government and the public,' said U.S. Attorney Troy Rivetti for the Western District of Pennsylvania. 'This settlement confirms that the United States will take all necessary steps to bring to justice dishonest pharmacies.'
Acting Deputy Inspector General for Investigations Scott J. Lampert of the HHS Office of Inspector General added: 'Pharmacies in federal health care programs must report truthful prices. Inflating those prices, as alleged here, puts the integrity of taxpayer-funded programs at risk.'
The settlement was the result of a coordinated effort between the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, the U.S. Attorney's Office for the Western District of Pennsylvania, the Department of Health and Human Services Office of Inspector General, the Defense Health Agency and state Medicaid programs. The settlement resolves only the allegations, and no determination of liability has been made.
