Walgreens has settled another gorvrnment opioid claim. (Photo by Michael M. Santiago/Getty Images)
Pharmacy giant Walgreens has agreed to pay up to $350 million in a settlement with the U.S. Department of Justice, which had lodged a claim over the issuing of millions of prescriptions during the past decade for opioids and other controlled substances.
Under the terms of the agreement, the drugstore chain will pay the government at least $300 million and will have to pay another $50 million if the company is sold, merged, or transferred before 2032.
The government’s complaint alleged that Walgreens knowingly filled millions of illegal prescriptions for controlled substances over the period August 2012 thru March 2023, including prescriptions for excessive opioids and prescriptions filled significantly early.
It said that Walgreens pharmacists filled these prescriptions despite “clear red flags” that the prescriptions were highly likely to be invalid, 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.
In a statement a Walgreens spokesman said: “We strongly disagree with the government’s legal theory and admit no liability. 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.”
Walgreens Action To Be Dismissed
The U.S. Justice Department has now moved to dismiss its complaint in light of Friday’s settlement.
This is just the latest in a series of lawsuits brought against the major pharmacy groups. In late 2022 CVS and Walgreens agreed to pay a total of $10 billion, while a range of settlements with drugmakers and distributors have brought in over $50 billion to date.
The pharmacies denied wrongdoing, but CVS said it would pay about $5 billion over 10 years to settle the claims, while Walgreens Boots Alliance agreed to pay $5.7 billion over 15 years and Walmart also reached a $3.1 billion deal.
According to preliminary data from the U.S. Centers for Disease Control and Prevention (CDC), approximately 61,393 people died from opioid overdoses in the 12-month period ending September 2024, down from the 86,621 the previous year. Specifically relating to synthetic opioids like fentanyl, the CDC reported an estimated 55,126 deaths in the same 12-month period, down from 79,432 the year before.
Rite Aid could be broken up for sale as it faces a second bankruptcy. (Photo by Spencer Platt/Getty … More
The Justice Department, together with the Drug Enforcement Administration (DEA) and Department of Health and Human Services Office of Inspector General (HHS-OIG), confirmed the $300 million settlement and terms of the deal over the government’s complaint, filed on Jan. 16 and amended April 18 in the U.S. District Court for the Northern District of Illinois.
Walgreens will now also move to dismiss a related declaratory judgment action filed in U.S. District Court for the Eastern District of Texas.
Walgreens Closing Stores
“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.”
The U.S. drugstore sector has experienced a torrid time in recent years, amid slowing sales and shrinking market share. Walgreens announced it was to close around 1,200 stores nationwide in the fall of last year, while Rite Aid Corp. is running low on cash and preparing to sell itself in pieces as it heads toward its second bankruptcy, less than a year after the drug-store chain’s emergence from Chapter 11 in September last, according to Bloomberg.
It cut about $2 billion in debt and addressed lawsuits over opioid claims as the company was taken over by its creditors and received about $2.5 billion in exit financing.
The retailer is understood to be seeking a debtor-in-possession loan to help fund itself during the process, which could see some locations in certain regions sold to bidders, while others would be wound down entirely.
Walgreens recently reported fiscal second-quarter earnings and revenue above expectations, as the retail drugstore giant benefitted from cost cuts as it prepares to go private. The company is in the process of being taken private by Sycamore Partners in a roughly $10 billion deal that is expected to close in the fourth quarter of this year.