Walgreens settles with New York over price gouging on baby formula

Walgreens Boots Alliance (NASDAQ:WBA) has reached a settlement with New York Attorney General Letitia James to resolve claims that the pharmacy chain operator inflated prices on at least 20 baby formula products amid a nationwide shortage in 2022.

Per the terms of the settlement, Deerfield, Illinois-based Walgreens (WBA) will pay $50K to cover costs, including civil penalties, and donate 9,564 canisters of formula for low-income New Yorkers, according to a Reuters report.

The settlement took effect on March 7, and a company representative signed the deal on Monday.

However, Walgreens (WBA) neither admitted nor denied wrongdoing in the incident, which allegedly occurred during a baby formula shortage following Abbott's (ABT) decision to recall certain formula products in February 2022.

James charged that during the shortage, Walgreens (WBA) sold 20 baby formula products, including Abbott (ABT) Similac and Reckitt Benckiser's (OTCPK:RBGPF) (OTCPK:RBGLY) Enfamil, increasing their prices by 10% or more. Prices shot up over 70% in at least one case.

The company allegedly sold over 3,400 products at "unconscionably" inflated prices. "For Walgreens to take advantage of this crisis and jack up formula prices is not only illegal, but downright shameful," James said.