Walgreens ordered to pay US$987 million to Everly Health in COVID-19 testing dispute

USA – A federal judge in Delaware has ruled that Walgreens must pay US $987 million to telemedicine provider PWNHealth, which operates as Everly Health Solutions, in a contract dispute over COVID-19 testing services.

The decision, made by U.S. District Judge Richard Andrews, upheld an arbitration award in favor of Everly Health, dismissing Walgreens’ claims that the arbitrator’s ruling was excessive and improper.

Walgreens and Everly Health collaborated during the pandemic, with Everly’s physician network facilitating COVID-19 test orders through a jointly created website.

The dispute arose when Walgreens allegedly diverted test orders to its in-house pharmacists, bypassing Everly’s network while continuing to use its trademark and branding.

Everly argued that Walgreens would not have been able to conduct nationwide COVID-19 testing without its services.

Walgreens contended that the arbitration award was significantly higher than the contract’s stipulated damages cap of US $79 million.

The company plans to appeal, asserting that the ruling sets a dangerous precedent for contract disputes. Everly Health, on the other hand, welcomed the court’s affirmation of the arbitration process and its findings.

The legal setback adds to Walgreens’ ongoing struggles. The company is currently implementing major cost-cutting measures, including closing 1,200 stores nationwide by 2026, with 500 closures planned for 2025.

Additionally, Walgreens has shut down 60 underperforming VillageMD clinics as part of a broader effort to cut costs by US $1 billion.

Meanwhile, Everly Health continues to expand its footprint in at-home diagnostics. The company, which acquired PWNHealth in 2021, remains a key player in the growing telehealth and remote testing market.