Walgreens must pay over $987 million after a federal judge upheld an arbitration ruling in a contract dispute with telemedicine provider PWNHealth. The case involves a disagreement over COVID-19 testing during the pandemic, with U.S. District Judge Richard Andrews confirming the award on Monday.
Walgreens, based in Deerfield, Illinois, had argued that the arbitration decision was “egregious and improper.” However, Judge Andrews disagreed, stating that there was no evidence the arbitrator acted outside their authority or showed bias in the case.
The pharmacy giant announced plans to appeal the decision. In a statement, a Walgreens spokesperson expressed disappointment, stating the arbitration award was “far beyond the contractual cap on damages” and that the arbitrator exceeded their authority.
PWNHealth, which operates under the name Everly Health Solutions, expressed satisfaction with the judge’s decision. In a statement, the company welcomed the affirmation of the arbitration award, calling the process “thorough” and “multi-year.”
The dispute dates back to 2022 when Everly initiated arbitration after claiming that Walgreens breached their 2020 contract. Walgreens had used Everly’s physician network to facilitate COVID-19 tests for customers ordering through its website. However, the relationship soured when Walgreens began using its own in-house pharmacists to handle the test orders.
Everly argued that Walgreens would not have been able to conduct nationwide COVID-19 testing without its services. It also claimed that despite diverting tests from the agreed process, Walgreens continued to display PWN’s trademark on its website, misleading customers about the workflow.
Walgreens countered that the $987 million award far exceeded the contract’s damage cap of $79 million. It also argued the ruling set an unprecedented high under a federal law protecting trademarks.
Judge Andrews ruled that the arbitrator had the authority to interpret the contract’s language and assess damages. He stated that the arbitrator did not ignore the law in making the decision.
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