The U.S. Court of Appeals for the Fourth Circuit heard arguments in J.R. v. Walgreens Boots Alliance on Sept. 22.

Federal Appeals Court Hears Arguments in Case Involving Walgreens’s 340B Program

A federal appeals court is considering some South Carolina Walgreens customers’ claims that Walgreens, in its capacity as a 340B contract pharmacy and as a 340B contract pharmacy third-party administrator (TPA), violated their privacy rights under South Carolina law.

The U.S. Court of Appeals for the Fourth Circuit heard arguments in J.R. v. Walgreens Boots Alliance on Sept. 22. When the Richmond, Va.-based court will rule is unknown.

A federal district judge dismissed the customers’ claims against Walgreens in July 2020. The federal appeals court was hearing the customers’ challenge to the lower court’s grounds for dismissal.

The customers filed their original complaint in Feb. 2019 in federal district court in Charleston, S.C. They alleged that Walgreens “does not completely or sufficiently de-identify’ its pharmacy customers’ personal identifiable information (PII) “before using it within, or disclosing or disseminating it through, its 340B Complete process(es).” 340B Complete is Walgreens’s 340B TPA service.

“Walgreens exploits its known relationship of trust between its customers and its pharmacists by covertly commoditizing its pharmacy customers’ PII in exchange for commercial profits, making money off of, and at the expense of, its unsuspecting and nonconsenting customers,” the customers alleged.

In its appeals court brief in November 2020, Walgreens said the customers “do not allege Walgreens improperly discloses their data to any third party. Rather, appellants contend Walgreens’ internal data processing related to the [340B] program violates South Carolina privacy laws.”

“Walgreens is not alleged to have exposed any personal information to anyone not authorized to see it, and its handling of such information is consistent with its obligations as a matter of both state and federal law,” the company said. “This court should affirm” the lower court’s decision, it said.

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