Walgreens has consented to a settlement of up to $350 million with the U.S. Department of Justice over accusations of improperly filling millions of prescriptions for opioids and other controlled substances over the past decade. This prominent pharmacy chain is obligated to pay no less than $300 million, with an additional $50 million contingent on whether the company undergoes any sale, merger, or transfer before the year 2032. Notably, in early March, Walgreens revealed a potential acquisition by the private equity firm Sycamore Partners that could be valued at nearly $10 billion.
The government’s complaint, submitted in January to the U.S. District Court for the Northern District of Illinois, claims Walgreens knowingly processed millions of unlawful prescriptions for controlled substances from August 2012 to March 2023. These prescriptions largely consisted of excessive opioids or were filled significantly earlier than permissible.
Walgreens, through its spokesperson Fraser Engerman, expressed strong disagreement with the government’s legal stance while admitting no wrongdoing. “The resolution allows us to conclude all litigation related to opioids with federal, state, and local governments while also affording advantageous terms from a cash flow standpoint as we pivot towards our recovery strategy,” Engerman stated.
Facing diminishing customer foot traffic and declining market share, Walgreens declared last October that it was shutting down 1,200 stores nationwide. At the close of 2023, Rite Aid declared bankruptcy while grappling with similar financial struggles and opioid-related settlements. In December, the U.S. Department of Justice filed an analogous lawsuit against CVS.
The allegations against Walgreens include ignoring obvious red flags that many prescriptions were likely illegitimate, with the company reportedly urging its pharmacists to fulfill orders swiftly. The government contends that Walgreens’ compliance officials disregarded extensive evidence of unlawful prescription fulfillment and failed to provide pharmacists with critical information about questionable opioid prescribers.
Additionally, Walgreens is accused of seeking reimbursement for numerous invalid prescriptions via Medicare and other federal healthcare programs, allegedly breaching the False Claims Act. Following Friday’s settlement, the U.S. Justice Department has opted to withdraw its lawsuit.
“Pharmacies have an inherent legal duty to dispense controlled substances responsibly and with due diligence, rather than prioritizing profit through dangerous drug sales,” stated Attorney General Pamela Bondi. “Our Department of Justice remains resolute in fighting the opioid crisis and holding those accountable who neglect to safeguard patients from addiction.”
Walgreens has also established an agreement with the Drug Enforcement Administration aimed at enhancing regulatory compliance concerning the distribution of controlled substances. This involves enforcing policies that require pharmacists to verify the legitimacy of prescriptions for controlled substances and maintaining a system to intercept illegitimate prescriptions from flagged prescribers.
In parallel, alongside the U.S. Department of Health and Human Services, Walgreens will sustain a compliance program that encompasses training, board monitoring, and regular reporting on the pharmacy’s practices regarding controlled substances.
“In confronting the opioid crisis devastating our nation, pharmacies have a critical role to avert the illegal dissemination of these potentially hazardous substances,” commented Norbert E. Vint, Deputy Inspector General of the U.S. Office of Personnel Management.
The settlement effectively resolves four cases initiated by whistleblowers formerly employed by Walgreens. Earlier in 2022, both CVS and Walgreens conceded to a settlement exceeding $10 billion in response to widespread legal claims related to their involvement in the opioid epidemic.
Over the past eight years, various drug manufacturers, distributors, and pharmacies have entered into more than $50 billion worth of settlements with governmental entities. A significant portion of this settlement funding is earmarked for combating the widespread opioid crisis.