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California AG Announces $15M Settlement Against Online Pharmacy Startup

California Attorney General Rob Bonta today announced a $15 million settlement against The Pill Club, a Silicon Valley startup operating an online pharmacy for birth control and contraceptives. The settlement resolves allegations that the company unlawfully billed California’s Medicaid program, Medi-Cal, millions of dollars in public funds in an allegedly fraudulent scheme that exploited the Affordable Care Act’s (ACA) essential coverage mandate, which ensures that insurance providers, including Medi-Cal, cover contraception. The investigation by the California Department of Justice (DOJ) found that The Pill Club defrauded Medi-Cal of millions of dollars by dispensing and reimbursing for costly products that customers had not asked for, and submitting reimbursements for ineligible services and prescriptions.

“The Pill Club unacceptably siphoned off Medi-Cal funding intended to help vulnerable communities access essential healthcare,” said Attorney General Bonta. “I am grateful to the whistleblowers and our investigators who were instrumental in holding The Pill Club accountable. At the California Department of Justice, we fight every day to protect and expand access to healthcare. We will not tolerate companies who attempt to unlawfully enrich themselves at Medi-Cal’s expense.”

California’s Medi-Cal program is funded by the state and federal governments, and is intended to help people with limited income and resources get the healthcare they need. After the Affordable Care Act (ACA)’s essential coverage mandate went into effect in 2010, Californians who depended on Medi-Cal were guaranteed insurance coverage for birth control and contraceptives.


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