Walmart, Target pay more than $6 billion to settle drug price scandal

Two of the nation’s largest retailers have reached a settlement with the federal government over their alleged use of a predatory price fixing scheme.

The companies reached the deal Monday with the Justice Department, which said the companies would pay $6.9 billion to resolve charges that they defrauded the government out of millions of dollars. 

The settlement resolves allegations that Wal-Mart and Target violated federal antitrust law by defrauding the government for decades with their high-priced drug deals.

The settlements require the companies to buy back and refund consumers who bought their drugs from the companies. 

“Today’s agreement will ensure that we will never again see the kind of widespread and predatory price-fixing practices that plagued the past,” said Assistant Attorney General for the Justice’s Antitrust Division Andrew Goldstein in a statement.

“We are proud to join forces with our antitrust partners to hold Wal-mart and Target accountable for their actions.”

The settlement also includes an agreement to investigate alleged antitrust violations by both companies.

The Justice Department’s investigation began after a federal judge in Texas last year found that Walmart and other drug makers were conspiring to keep the prices of their drugs artificially high.

Walmart and the Justice announced in October that they had reached an agreement that requires them to buy a majority stake in Target and pay an additional $7.5 billion to cover the legal fees of any lawsuits the Justice would pursue. 

Last year, a judge in Michigan ordered the two companies to pay $2.6 billion in back-pay to customers who had bought their drug from them.

That settlement was announced by Justice Department antitrust prosecutors.

The Justice Department said the two drug companies also agreed to pay a combined $639 million to settle antitrust charges. 

In the case before the Supreme Court, Target agreed to buy its drug from Wal-Marts for $4.3 billion. 

Walmart was found to have defrapped its own price by buying its own generic drugs at a significantly higher price than what consumers were paying. 

As part of the settlement, Wal- Mart will pay $1.2 billion to customers in the United States who had purchased its drugs from Target, the Justice said.

Target also agreed not to engage in any illegal price-setting or price-discriminating conduct. 

Under the settlement agreement, the companies agreed to invest $300 million in a fund that would help consumers purchase generic medications at a lower price than the generic drugs Target was selling.