Walmart Inc., CVS Health Corp. and Walgreens Boots Alliance Inc. were ordered to pay a total of $650 million over their failure to properly monitor opioid prescriptions in Ohio, in the drug industry’s latest setback in the sprawling litigation over the painkillers.
A federal judge in Cleveland on Wednesday ruled that the companies must pay the “abatement” fees over 15 years to help two Ohio counties deal with the fallout from the public health crisis created by the improper sale of the drugs.
US District Judge Dan Polster also ordered the pharmacy chains to set up systems “to ensure they are complying fully” with federal laws governing the monitoring of prescription drug sales.
Municipalities across the country have accused opioid makers, distributors and retailers of downplaying the painkillers’ addiction risks and sacrificing patient safety for billions in profits. Ohio is one of the states ravaged by the opioid crisis, which has killed about half a million Americans over two decades. Ohio’s Trumbull and Lake counties alleged they were flooded with 140 million pills over six years starting in 2006.
$22 Billion Tab
The total cost for the biggest pharmacy retailers facing opioid lawsuits could ultimately be more than $22 billion, Bloomberg Intelligence’s Holly Froum estimates.
At 3:41 p.m. in New York, shares of CVS were down 1.3%, Walgreens down 2.8% and Walmart up 0.2%.
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Mark Lanier, the lead lawyer for the Ohio counties, said the abatement fees would help with local recovery efforts but that the chains’ agreement to increase prescription monitoring might be more important.
“That will help prevent future tragedies,” he said.
Walgreens said the blame was misplaced.
“We never manufactured or marketed opioids nor did we distribute them to the ‘pill mills’ and internet pharmacies that fueled this crisis,” spokesperson Fraser Engerman said in a statement, vowing to appeal.
CVS spokesperson Mike DeAngelis also promised an appeal.
“Pharmacists fill legal prescriptions written by DEA-licensed doctors who prescribe legal, FDA-approved substances to treat actual patients in need,” DeAngelis said, referring to the US Drug Enforcement Administration and the Food and Drug Administration.
Read More: Walmart, CVS, Walgreens Fueled Opioid Crisis, Jury Concludes
Walmart will appeal as well, said spokesperson Randy Hargrove.
“Instead of addressing the real causes of the opioid crisis, like pill mill doctors, illegal drugs and regulators asleep at the switch, plaintiffs’ lawyers wrongly claimed that pharmacists must second-guess doctors in a way the law never intended and many federal and state health regulators say interferes with the doctor-patient relationship,” Hargrove said.
The counties had sought a total of $2.4 billion from the pharmacy chains to replenish depleted budgets for drug treatment, social services and police, with $1.3 billion for Trumbull and $1.1 billion for Lake, according to people familiar with their demands.
‘The Sun and the Moon’
Polster found that was “asking for the sun and the moon.” Of the $650 million he ordered, Lake County will get more than $306 million and Trumbull County more than $344 million, according to court filings. He ordered the companies to pay the first two years of fees, amounting to $86.7 million, immediately.
Hunter Shkolnik, a lawyer for the counties, said in a statement that the municipalities’ legal team “never wavered from our strong beliefs the chain pharmacies were a major factor in causing the opioid epidemic.”
Some makers of opioid-based drugs, such as Johnson & Johnson and Teva Pharmaceutical Industries Ltd, and distributors including McKesson Corp. and Cardinal Health Inc., have reached global settlements for billions of dollars. The pharmacy chains haven’t come up with such wide-reaching resolutions of the suits against them.
Read More: J&J, Distributors Unveil $26 Billion Opioid Deal With States
More than a dozen companies, including makers, distributors and pharmacies, are facing almost 4,000 opioid lawsuits filed by states, local governments and Native American tribes. Many of those cases have been consolidated before Polster for pretrial information exchanges and settlement talks.
Next Up: New Mexico
The next opioid case against the chains is set for September in New Mexico, with Walmart, Walgreens and CVS among the defendants accused by state officials of lax monitoring, according to court filings.
“New Mexico has been devastated by the tsunami of pills caused by the defendants’ focus on profits” rather than their “responsibilities under the law,” Peter Mougey, a Florida-based lawyer who will try the case, said in a statement. The trial will expose that imbalance, Mougey said.
The consolidated case in Cleveland is In Re National Prescription Opiate Litigation, 17-md-2804, US District Court, Northern District of Ohio.
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