Opioid lawsuits: CVS first major chain to settle, will pay $5 billion

CVS will be the first major pharmacy chain to enter a nationwide settlement, saying it will pay around $5 billion to state, local, and Native American governments over the sale of opioids. The company has not admitted any wrongdoing. 

First Look

CVS Health and Walgreen Co. announced agreements in principle Wednesday to pay about $5 billion each to settle lawsuits nationwide over the toll of opioids, and a lawyer said Walmart is in discussions for a deal.

Together, the developments amount to what could be the last round of huge settlements after years of litigation over the drug industry’s role in an overdose epidemic that has been linked to more than 500,000 deaths in the United States over the past two decades.

In the lawsuits, governments said pharmacies were filling prescriptions they should have flagged as inappropriate.

The deals call for most of the funds from Woonsocket, Rhode Island-based CVS and Deerfield, Illinois-based Walgreens to be used to fight the opioid crisis.

Under the tentative plans, CVS would pay $4.9 billion to local governments and about $130 million to Native American tribes over a decade. Walgreens would pay $4.8 billion to governments and $155 million to tribes over 15 years. The exact amount depends on how many governments join the deals.

CVS announced its plan along with an earnings report Wednesday, and Walgreens made an SEC filing with some details.

“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. “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.”

CVS has launched educational programs and installed safe disposal units for drugs in stores and police departments, among other measures designed to reduce misuse of opioids.

Neither CVS nor Walgreens is admitting wrongdoing.

Representatives from Walmart did not immediately return calls Wednesday, but Paul Geller, a lawyer for governments in the lawsuits, said talks are continuing with the company.

“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 totaling billions of dollars, these companies have committed to making significant improvements to their dispensing practices to help reduce addiction moving forward.”

The proposed pacts bring a nationwide tally of finalized and completed settlements between companies and governments to more than $50 billion.

Opioids have been linked to more than 500,000 deaths in the U.S. over the past two decades. Most of the deaths initially involved prescription drugs. As governments, doctors, and companies took steps to make them harder to abuse and obtain, people with opioid use disorder increasingly switched to heroin, which proved more deadly.

In recent years, opioid deaths have soared to record levels around 80,000 a year. Most of those deaths involve illicitly produced versions of the powerful lab-made drug fentanyl, which is appearing throughout the U.S. supply of illegal drugs.

The settlement was announced as litigation over the role of pharmacies in the opioid crisis has ramped up. On Tuesday, 18 companies – most of them pharmacy-related – submitted reports to a judge overseeing opioid litigation detailing where they face lawsuits.

Only a handful of opioid settlements have had bigger dollar figures than the CVS plan. Distributors AmerisourceBergen, Cardinal Health, and McKesson this year finalized a combined settlement worth $21 billion and drugmaker Johnson & Johnson finalized a $5 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 $6 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.

This story was reported by The Associated Press. AP writer Tom Murphy in Indianapolis contributed to this report.