The two largest pharmacy chains in the US, CVS Health and Walgreen Co, have announced in-principle agreements to pay about $US5 billion ($7.87 billion) each to settle nationwide lawsuits over the toll of opioids.
Key points:
- Under the tentative plans, the companies will pay the majority to governments and additional amounts to Native American tribes
- Governments claimed pharmacies filled prescriptions they should have flagged as inappropriate
- If the deals are completed, the value of all opioid-related settlements in the US will total more than $US50b
And a third pharmacy behemoth, Walmart, is in discussions for a deal, according to a lawyer.
The prospective settlements are part of a shift in the legal landscape surrounding the nation’s opioid epidemic.
Instead of suspense over whether companies in the drug industry would be held to account through trials or settlements, the big question is now how their money will be used and whether it will make a difference in fighting a crisis that has only intensified.
The deals, if completed, would end thousands of lawsuits in which governments claimed pharmacies filled prescriptions they should have flagged as inappropriate.
With settlements already proposed or finalised between some of the biggest pharmaceutical and distribution companies, the recent developments could be the among the last multi-billion-dollar settlements to be announced.
They also would bring the total value of all settlements to more than $US50 billion, with most of it required to be used by state and local governments to combat opioid misuse, which has been linked to more than 500,000 deaths in the US over the past two decades.
Neither CVS nor Walgreens is admitting wrongdoing.
‘One more culprit of the overdose crisis’
“It’s one more culprit of the overdose crisis that is having to pay their dues,” Courtney Gary-Allen, organising director of the Maine Recovery Advocacy Project, said.
“Average Americans have been paying it for a long time.”
Ms Gary-Allen, who is a member of a council that will help determine how Maine uses its opioid-settlement funds, said more money to address the problem would help.
She said her state needed more beds for medical detox and treatment.
The payment plans spring from mediation involving a group of state attorneys-general.
Before they move ahead, state and then local governments would need to sign on.
So far, the detailed, formal deals have not been presented to the government entities so they can decide whether to join.
Payments over years
Under the tentative plans, CVS would pay $US4.9 billion to local governments and about $US130 million to Native American tribes over a decade.
Walgreens would pay $US4.8 billion to governments and $US155 million to tribes over 15 years.
The exact amount depends on how many governments join the deals.
Both noted they had been addressing the crisis through measures such as starting educational programs and installing safe disposal units for drugs in stores and police departments.
And both said the settlements would allow them to help while staying focused on their business.
“We are pleased to resolve these longstanding 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 chief policy officer and general counsel, said in a statement.
Walgreens said in a statement: “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.”
Paul Geller, a lawyer for governments in the lawsuits, said talks with Walmart continued.
Walmart representatives would not comment on Wednesday.
“These agreements will be the first resolutions reached with pharmacy chains and will equip communities across the country with the much-needed tools to fight back against this epidemic and bring about tangible, positive change,” lawyers for local governments said in a statement.
“In addition to payments totalling billions of dollars, these companies have committed to making significant improvements to their dispensing practices to help reduce addiction moving forward.”
‘Addiction industry’ players held accountable
If the settlements are completed, they will leave mostly smaller drug-industry players as defendants in lawsuits.
Just this week, a group of mostly regional pharmacy chains sent to a judge, who is overseeing federal litigation, information about claims they face — a possible precursor to scheduling trials or mediating settlements involving some of those firms.
“One by one, we are holding every player in the addiction industry accountable for the millions of lives lost or devastated by the opioid epidemic,” Connecticut Attorney-General William Tong said in a statement.
“The companies that helped to create and fuel this crisis must commit to changing their businesses practices, and to providing the resources needed for treatment, prevention and recovery.”
Most of the United States’ opioid overdose deaths initially involved prescription drugs.
As governments, doctors and companies took steps to make them harder to abuse and obtain, people addicted to them increasingly switched to heroin, which proved more deadly.
In recent years, opioid deaths have soared to record levels of about 80,000 a year.
Most of those deaths involve the illicitly produced version of the powerful lab-made drug fentanyl, which is appearing throughout the US supply of illegal drugs.
Only a handful of opioid settlements have had bigger dollar figures than the CVS plan.
Distributors AmerisourceBergen, Cardinal Health and McKesson this year finalised a combined settlement worth $US21 billion, and pharmaceutical giant Johnson & Johnson finalised a $US5 billion deal.
Purdue Pharma, the maker of OxyContin, and members of the Sackler family who own the company have a proposed settlement that would involve up to $US6 billion in cash, plus the value of the company, which would be turned into a new entity with its profits used to combat the epidemic. That plan has been put on hold by a court.
AP