Walgreens Agrees to Pay Up to $350 Million in U.S. Opioid Settlement
Introduction to the Settlement
Walgreens has agreed to pay up to $350 million in a settlement with the U.S. Department of Justice, which accused the pharmacy of illegally filling millions of prescriptions in the last decade for opioids and other controlled substances.
Terms of the Settlement
The nationwide drugstore chain must pay the government at least $300 million and will owe another $50 million if the company is sold, merged, or transferred before 2032, according to the settlement reached Friday.
Allegations Against Walgreens
The government’s complaint, filed in January in the U.S. District Court for the Northern District of Illinois, alleges that Walgreens knowingly filled millions of illegal prescriptions for controlled substances between August 2012 and March 2023. These include prescriptions for excessive opioids and prescriptions filled significantly early.
Response from Walgreens
“We strongly disagree with the government’s legal theory and admit no liability,” Walgreens spokesperson Fraser Engerman said in a statement. “This resolution allows us to close all opioid related litigation with federal, state, and local governments and provides us with favorable terms from a cashflow perspective while we focus on our turnaround strategy.”
Industry Challenges
Amid slumping store visits and shrinking market share, Walgreens announced in October that it was closing 1,200 stores around the country. Rite Aid filed for bankruptcy at the end of 2023 as it was also dealing with losses and opioid lawsuit settlements. The U.S. Department of Justice filed a similar lawsuit against CVS in December.
Details of the Complaint
The complaint says Walgreens pharmacists filled these prescriptions despite clear red flags that the prescriptions were highly likely to be invalid, and the company pressured its pharmacists to fill them quickly. The government alleges Walgreen’s compliance officials ignored “substantial evidence” that its stores were filling unlawful prescriptions and withheld important information on opioid prescribers from its pharmacists.
Violation of the False Claims Act
Walgreens then allegedly sought payment for many of the invalid prescriptions through Medicare and other federal healthcare programs in violation of the False Claims Act, according to the government.
Outcome of the Settlement
The U.S. Justice Department has moved to dismiss its complaint in light of Friday’s settlement.
Statement from the Attorney General
“Pharmacies have a legal responsibility to prescribe controlled substances in a safe and professional manner, not dispense dangerous drugs just for profit,” said Attorney General Pamela Bondi in a statement. “This Department of Justice is committed to ending the opioid crisis and holding bad actors accountable for their failure to protect patients from addiction.”
Compliance Agreements
Walgreen has also entered into an agreement with the Drug Enforcement Administration to improve its compliance with rules around dispensing controlled substances, maintain policies and procedures requiring pharmacists to confirm the validity of controlled substance prescriptions, and maintain a system for blocking prescriptions from prescribers that are producing illegitimate prescriptions.
Agreement with the U.S. Department of Health and Human Services
With the U.S. Department of Health and Human Services, Walgreens has agreed to establish and maintain a compliance program that includes training, board oversight and periodic reporting to the agency regarding the pharmacy’s dispensing of controlled substances.
Statement from the Deputy Inspector General
“In the midst of the opioid crisis that has plagued our nation, we rely on pharmacies to prevent not facilitate the unlawful distribution of these potentially harmful substances,” said Norbert E. Vint, deputy inspector general of the U.S. Office of Personnel Management, in a statement.
Resolution of Whistleblower Cases
The settlement resolves four cases brought by former Walgreens employee whistleblowers. In 2022, CVS and Walgreens agreed to pay more than $10 billion in a multi-state settlement of lawsuits brought against them over the toll of the opioid crisis.
Overview of Opioid Crisis Settlements
Over the last eight years, drugmakers, wholesalers and pharmacies have agreed to more than $50 billion worth of settlements with governments — with most of the money required to be used to fight the opioid crisis.
Conclusion
The settlement between Walgreens and the U.S. Department of Justice marks a significant step in the ongoing efforts to address the opioid crisis. It highlights the importance of pharmacies’ role in preventing the unlawful distribution of controlled substances and the need for strict compliance with regulations to ensure patient safety.
FAQs
Q: How much will Walgreens pay in the settlement?
A: Walgreens will pay at least $300 million and up to $350 million if the company is sold, merged, or transferred before 2032.
Q: What were the allegations against Walgreens?
A: The government alleged that Walgreens knowingly filled millions of illegal prescriptions for controlled substances, including excessive opioids and prescriptions filled significantly early.
Q: Has Walgreens admitted liability?
A: No, Walgreens has not admitted liability and disagrees with the government’s legal theory.
Q: What are the terms of the compliance agreements?
A: Walgreens has agreed to improve its compliance with rules around dispensing controlled substances, maintain policies and procedures for validating prescriptions, and establish a compliance program with training and oversight.
Q: How much have drugmakers, wholesalers, and pharmacies agreed to pay in opioid crisis settlements?
A: Over $50 billion over the last eight years, with most of the money required to be used to fight the opioid crisis.
