By Jonathan Stempel

(Reuters) -Walgreens Boots Alliance agreed to pay $106.8 million to settle charges it fraudulently billed the U.S. government for prescriptions that were never dispensed, the Department of Justice said on Friday.

The Justice Department said Walgreens violated the federal False Claims Act between 2009 and 2020 by submitting payment claims to Medicare, Medicaid and other healthcare programs for prescriptions it processed but which were never picked up.

This caused the pharmacy chain to receive tens of millions of dollars for prescriptions it never provided to patients, the department said.

"Federal health care programs provide critical health care services to millions of Americans," said Brian Boynton, head of the Justice Department's civil division. "We will hold accountable those who abuse these programs by knowingly billing for goods or services they did not provide."

Walgreens, based in Deerfield, Illinois, did not admit liability in agreeing to settle.

"Due to a software error, we inadvertently billed some government health care programs for a relatively small number of prescriptions our patients submitted but never picked up," Walgreens said in a statement.

"We corrected the error, reported the issue to the government and voluntarily refunded all overpayments."

Friday's settlement resolves three whistleblower lawsuits filed in Florida, New Mexico and Texas.

The Justice Department said the payout took into account Walgreens' cooperation and its "significant" steps to upgrade its in-house pharmacy management system to ensure that the billing problems don't happen again.

Walgreens previously refunded $66.3 million for the settled claims and is being credited for this amount.

The chain recently operated about 8,600 stores in the United States, but said in June it plans to close a significant number of underperforming stores over the next few years.

Steven Turck, a former Walgreens pharmacy manager who filed the Texas case, will receive $14.92 million from the settlement. Andrew Bustos, a former Walgreens district pharmacy supervisor who filed the New Mexico case, will receive $1.62 million.

Walgreens Boots shares closed on Friday up 37 cents, or 4.2%, at $9.21.

(Reporting by Jonathan Stempel in New York; editing by Jonathan Oatis and David Gregorio)