Companies that have had a large role in the opioid crisis are now being held to account for their actions that helped contributed to the explosive growth in addiction. While much of the focus has been on the companies that manufactured the pills, there have been other businesses that have played a role in the crisis. Government has focused most of its effort on the manufacturers as they have been sued by thousands of governmental entities. Now, pharmacies are having to answer for their actions as they too are facing the prospect of litigation. Walgreens, in particular, is facing questions over its role in the opioid crisis that could jeopardize a large corporate buyout.
Walgreens had a unique space in the market for opioids that was different than its competitors. While other pharmacies relied on distributors to purchase their opioid pills, Walgreens cut out the middleman and acted as its own distributor. This means that it was buying pills directly from manufacturers such as Purdue Pharmaceutical and sending them directly on to its pharmacies. This served to boost the companies profits since one step of the sales process was removed.
Not only did Walgreens buy its own pills but it bought quite a few of them. Walgreens bought and sold more pills than any other pharmaceutical chain in the country. Its closest competitor was CVS, and Walgreens bought approximately three billion more pills than CVS. In total, over a seven-year span for a total of nearly 13 billion pills. This was more than double the number of pills purchased by Walmart.
As its own distributor, Walgreens had the obligation to monitor its own sales to its pharmacies for any suspicious purchases. If the company detected any of these possibly insidious transactions, it had the legal obligation to report them to the Drug Enforcement Administration. Walgreens failed to live up to its legal requirements. The company shipped pills to its pharmacies with practically no questions asked. Walgreens was fined $80 million by the DEA for failing to report suspicious transactions. In Colorado alone, federal investigators detected over 1,600 violations of federal law at Walgreens outlets. Multiply this by 50 states and one can begin to understand the scope of what was occurring at Walgreens.
During the height of its conduct, corporate officials considered documenting its sales program. However, a company attorney advised against creating a record of its noncompliance with federal laws. The company had engaged in behavior that promoted the sale of OxyContinin at its pharmacies. Walgreens even went so far as to track the underperformers when it came to opioid sales and to inquire at these pharmacies why sales were so low.
Walgreens had trouble with the DEA for years, failing to follow rules and implement the agency’s requirements for suspicious transaction reporting. Even after the company was fined by the DEA, its practices still did not fully improve. Walgreens changes its model and stopped distributing its own pills, but that did not stem the flow of opioids. Walgreens switched to purchase from the distributor AmeriSource Bergen, but the pharmacy chain took an ownership stake in its distributor. The company still continued to write nearly the same amount of prescriptions.
Walgreens had attempted to impose limits on OxyContin shipments but left the pharmacies the option of seeking an override of these limits. The company approved nearly 95 percent of the override requests. In addition to the uncontrolled shipments of the drug, there were numerous instances in which pharmacy employees stole pills. Sometimes, these thefts ran into the thousands of pills.
The company’s corporate filings with the SEC now indicate that it is a defendant in “numerous” legal proceedings relating to opioids. The company now faces large potential liability as all companies involved in the crisis are not being held responsible for their roles. Each of the large pharmacy chains that wrote prescriptions for these pills is now facing lawsuits. As the company that sold the most pills, Walgreens’ liability will likely be the highest.
Most of the assets belonging to the opioid manufacturers are going to settlements with the governmental entities that have filed suit against them. Assuming that the settlement is approved, the company’s assets will go into a trust fund to cover governmental costs. However, this is still insufficient to cover the large amount of costs that were incurred by governments, and they need to find more defendants. The same plaintiffs that sued the opioid manufacturers are also going after the pharmacies in court.
Recently, three major opioid distributors settled a suit with two Ohio counties for $260 million. The trial involving Walgreens was postponed, but there is still the prospect of large-scale liability hanging over the company. Now, the trial involving Walgreens was delayed for six months for there to be time for the parties to reach a possible settlement agreement. If they fail to do so, then the trial will be held.
The company has been reported as being interesting in a leveraged buyout to take itself private. However, the possibility of staggering liability has chilled that speculation, since the company would need to obtain financing for what would likely be a mammoth transaction and lenders, would understandably hesitate to advance the company large amounts of money.
The companies’ liability to individual families is still yet to be determined. They have not faced large-scale litigation filed by families that seek compensation for damages that they have suffered. Like the tobacco litigation, it is possible that companies can make large payments to the states and still be held liable to individual plaintiffs. However, you should still contact The Law Offices of Sadaka Associates to learn of your legal rights and discuss a possible case against the pharmacy that sold you or a loved one excessive doses of opioids for improper purposes.
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