CVS and Walgreens, two of the nation’s largest retail pharmacy chains, said on Wednesday that they had reached tentative agreements to pay about $5 billion each to settle thousands of lawsuits over their role in the opioid crisis.
The companies made the announcements in government filings, but finalization is conditional on an overwhelming majority of plaintiffs, including state, municipal and tribal governments, signing on, they said.
If the deals are finalized, they would represent payouts from the arm of the pharmaceutical industry that has been most resistant to striking a deal with plaintiffs in the litigation. Many large manufacturers of prescription opioids and the three major drug distribution companies have already settled.
While negotiations were largely underway with those corporations, the big retailers mostly opted to test their arguments in court. But in August, a federal judge ordered CVS, Walgreens and Walmart to pay $650 million to two Ohio counties, to help offset the ongoing costs of their role in the two-decade opioid crisis. A jury had found that the companies turned a blind eye to the diversion of prescription opioids they were dispensing, ignoring red flags that warned of egregious quantities of the pills exiting their doors into communities. They settled earlier in cases brought in Florida and West Virginia and by two New York counties.
Josh Stein, the attorney general of North Carolina, who is on the executive committee of states handling the negotiations, confirmed the tentative deal, saying, “While significant work remains, a broad coalition of states, in cooperation with lawyers representing the subdivisions, is making progress in our negotiations with CVS and Walgreens, and we are hopeful that we will be able to reach a final agreement on all terms.”
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A person familiar with the negotiations said that Walmart had agreed to pay $3.1 billion in settlement negotiations. The company declined to comment.
Both CVS and Walgreens said that the agreements represented no admission of wrongdoing on their part.
CVS said that over the next 10 years, it would pay $4.9 billion to states and municipal governments and about $130 million to tribes under the agreement.
“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,” said Thomas Moriarty, the chief policy officer and general counsel for CVS Health. “We are committed to working with states, municipalities and tribes, and will continue our own important initiatives to help reduce the illegitimate use of prescription opioids.”
In its filing, Walgreens said it would pay $4.79 billion over 15 years to the states and $154.5 million to the tribes. It would also pay $753.5 million in lawyers’ fees and costs, over six years.
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“This settlement framework will allow us to keep our focus on the health and well being of our customers and patients, while making positive contributions to address the opioid crisis,” Walgreens said in a statement.
It is unclear how many states, municipalities and tribes will actually agree to these proposals, particularly given how protracted and contentious negotiations between these plaintiffs and the pharmacy chains have been. Walgreens’ announcement does not, for example, resolve the second phase of a trial underway in San Francisco federal court to determine the amount the company must pay to the city and county to abate the cost of the ongoing opioid epidemic. Nor does it encompass a recently concluded New Mexico trial before a state judge, who has not yet issued a decision.
But a statement from lawyers negotiating on behalf of cities and counties across the country urged plaintiffs to work toward a final deal.
“We encourage all states, subdivisions and Native American tribes to join us once these agreements and allocation processes are finalized to expedite the process of providing these lifesaving resources where they are needed most,” the statement said.