Dive Brief:
Walgreens has agreed to pay $300 million to settle allegations that the pharmacy chain illegally filled millions of opioid and other prescriptions for controlled substances, the Department of Justice said Monday.
From August 2012 through March 1, 2023, Walgreens pharmacists knowingly provided prescriptions for large amounts of opioids, filled prescriptions significantly early and completed prescriptions for a dangerous combination of drugs that can cause overdose or death, according to the government.
Walgreens will have to pay an additional $50 million if the drugstore chain is sold, merged or transferred before 2032. Last month, the company entered into a deal to be acquired by private equity firm Sycamore Partners.
Dive Insight:
The DOJ brought the complaint early this year that alleges Walgreens, one of the largest pharmacy chains in the country, fueled the deadly opioid epidemic by filling controlled substance prescriptions despite red flags that they were invalid.
The complaint claimed pharmacists were pressured to dispense medications quickly, without taking the time to ensure prescriptions were legal.
The company’s compliance team also ignored evidence that pharmacies were providing prescriptions illegally, and limited information sharing with pharmacists — like refusing to provide internal data or preventing pharmacists from warning each other about potentially problematic prescribers, according to the DOJ.
In addition to the financial settlement, Walgreens also entered into agreements with the Drug Enforcement Administration and the HHS’ Office of Inspector General. Under the deal with the DEA, the pharmacy chain will implement and maintain compliance measures for the next seven years, including requiring pharmacies to confirm the validity of controlled substance prescriptions before they’re dispensed and provide annual training to pharmacy workers, according to the DOJ’s press release.
With the HHS, Walgreens agreed to maintain a compliance program with written policies and procedures, as well as maintain board oversight and periodically report to the OIG.
“Pharmacies have an obligation to ensure that every prescription for highly addictive controlled substances is legitimate and issued responsibly in compliance with the Controlled Substances Act,” Derek Maltz, the acting administrator of the DEA, said in a statement. “When one of the nation’s largest pharmacies fails at this obligation, they jeopardize the health and safety of their customers and place the American public in danger.”
Walgreens has struggled financially in recent years, battered by lower prescription reimbursements, heightened retail competition and a number of hefty payouts to settle accusations it contributed to the opioid epidemic.
The pharmacy chain recently entered into a deal to go private through an acquistion by Sycamore, ending its nearly 100-year run as a public firm. The purchase isn’t surprising, given the work Walgreens needs to to do improve its core retail pharmacy business, according to analysts.
The resolution provides Walgreens “favorable terms from a cashflow perspective while we focus on our turnaround strategy,” Fraser Engerman, senior director for media relations and issues management at the pharmacy chain, said in a statement to Healthcare Dive. However, the company strongly disagrees with the federal government’s case and doesn’t admit liability, he said.
Walgreens’ deal with the DOJ is the latest in a string of opioid-related settlements with retail pharmacies, which have been hit with multiple lawsuits in the wake of increasing opioid overdose deaths over the past 20 years.
Walgreens and competitor CVS agreed to pay more than $10 billion to multiple states in 2022, while grocery chain Kroger finalized a $1.4 billion settlement with 30 states last year. Rite Aid settled with the DOJ for $409.3 million last summer after the company declared bankruptcy.
In December, CVS was also sued by the DOJ for allegedly illegally dispensing controlled substances. The case is ongoing.
