CVS, Walmart, Walgreens reach $13 billion opioid settlement
CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. tentatively agreed to pay more than $13 billion to resolve thousands of state and local government lawsuits accusing the pharmacy owners of mishandling opioid painkillers, according to the companies and people familiar with the matter.
The proposed settlement – potentially one of the last big accords spawned by more than five years of litigation over the highly addictive painkillers – calls for CVS to pay $4.9 billion, Walgreens to pay about $5 billion and Walmart to pay $3 billion to resolve the municipalities’ suits, according to the CVS and Walgreens officials, along with the people, who asked not to be identified because they weren’t authorized to speak publicly about the tentative deal.
CVS officials on Wednesday confirmed their portion of the settlement and noted they are also paying $130 million to resolve opioid claims brought by Native American tribes. The payouts will be spread over 10 years, CVS said in a statement.
Walgreens, in a filing with the U.S. Securities and Exchange Commission on Wednesday, said its payments will be spread out over 15 years and include about $154 million for the tribes and more than $750 million in legal fees.
A spokesman for Walmart declined to comment Tuesday on the world’s largest retailer’s potential share of the settlement.
The accords won’t be finalized until enough states, counties and cities agree to them, the people said. That’s similar to the structure of a $26 billion opioid accord reached with Johnson & Johnson and the three largest U.S. drug distributors in 2021.
A group of six state attorneys general who targeted pharmacy providers for not properly monitoring opioid prescriptions handled by their companies led months of talks that generated the proposed deals, the people said.
“We are pleased to resolve these long-standing claims and putting them behind us is in the best interest of all parties, as well as our customers, colleagues and shareholders,” Thomas Moriarty, CVS’s general counsel, said Wednesday in the release. The company is based in Woonsocket, Rhode Island.
“As one of the largest pharmacy chains in the nation, we remain committed to being a part of the solution, and this settlement framework will allow us to keep our focus on the health and wellbeing of our customers and patients, while making positive contributions to address the opioid crisis,” officials of Deerfield, Illinois-based Walgreens said in a release
Bloomberg Intelligence’s Holly Froum predicted a global deal wiping out the pharmacies’ opioid exposure could cost $10 billion to $15 billion. She told investors in a note Wednesday the deal’s total could rise as the companies have to pay extra to resolve cases by states and municipalities that opt out of the original offer.
The settlement marks another step forward in the sweeping legal fight over opioids – blamed for more than 500,000 U.S. deaths over the last two decades. States, cities and counties filed almost 4,000 suits against more than a dozen drugmakers, distributors and pharmacies seeking compensation for billions spent battling the U.S. opioid epidemic. So far, they’ve recovered about $30 billion to bolster police and drug-treatment budgets, based on data collected by Bloomberg News.
Municipalities accuse the companies of downplaying the painkillers’ addiction risks and sacrificing patient safety for billions in profits. They’ve had some success persuading juries to hold the companies liable for creating “public nuisances” by botching their handling of the painkillers. However, state and local government also have lost bids to tag drugmakers with responsibility for wrongdoing in connection with the epidemic.
The pharmacy chains were sued for allegedly failing to create legally mandated monitoring systems to detect illegitimate opioid prescriptions being filled. The companies countered that most of the problems tied to the painkillers come from illegal versions of the drugs brought in from outside the US by criminal gangs.
In August, a federal judge overseeing all federal opioid suits ordered CVS, Walgreens and Walmart to pay $650 million in so-called “abatement fees” to help two Ohio counties cope with the fallout from the public-health crisis created by the epidemic. His ruling came after jurors held the chains responsible for lax opioid monitoring.
Judges in New Mexico and San Francisco are currently hearing evidence against Walgreens in cases accusing the company of fueling the opioid crisis.
The consolidated case is In Re National Prescription Opiate Litigation, 17-md-2804, US District Court, Northern District of Ohio (Cleveland).