Walgreens to Pay $500 Million in Largest Opioid Settlement With New Mexico
You’ve probably been to a Walgreens pharmacy to pick up a prescription or get our essentials. Generally, brick-and-mortar pharmacies are a safe bet for getting clean, uncontaminated medications—at least compared to getting pills over the internet, which can be deadly.
But now, even this trusted source of drugs is implicated in legal trouble over drug-related deaths. Last week, Walgreens Boots Alliance (the parent company of the familiar Rx stores) agreed to pay $500 million to the state of New Mexico to settle claims that its pharmacies helped fuel opioid addiction in the state by failing to stop illegal pill sales.
The National Opioid Epidemic
It’s not news that opioid addiction and abuse is a national epidemic. An estimated 9.2 million Americans aged 12 and older misused opioids in 2021, according to the U.S. Department of Health and Human Services. Of this number, 8.7 million were prescription pain reliever abusers and 1.1 million were heroin users. The Centers for Disease Control and Prevention (CDC) report that there were 91,799 drug overdose deaths in the U.S. accounted for in 2020. Of those, nearly 75% involved an opioid. Preventable opioid overdose deaths in the country have increased five-fold since 1999, which lead public health officials to declare a nationwide opioid overdose epidemic.
Although this problem has clearly been going on for a while, it was only around 2017 that governments made a robust effort to hold the culprits accountable through the use of the legal system. Over the past five years, over 3,300 lawsuits have been brought by state, local and Native American tribal governments against drugmakers, and distributers. These suits accuse the manufacturers of downplaying the risks of their opioid pain medicines, and pharmacies of ignoring red flags that prescriptions were being diverted into illegal trafficking.
Of course, many of these suits result in settlements, rather than the responsible parties facing jail. For example, you may recall the recent news that the Sackler family, owners of Purdue Pharma and makers of OxyContin, were able to settle claims against them for a fraction of their wealth. In May, Walgreens and San Francisco reached a $230 million settlement over the opioid crisis. Last fall, Walgreens, along with pharmaceutical competitors CVS and Walmart, agreed to pay $13.8 billion to settle many of these lawsuits.
Opioid overdose continues to be an urgent public health challenge in many parts of the country, but one state that’s been faced with the crisis especially hard is New Mexico.
New Mexico’s Legal War With Walgreens
In 2019, 74% of all overdose deaths involved opioids in New Mexico, mirroring the national statistics. But the New Mexico government has been active in trying to hold drug companies accountable.
A recent agreement of $500 million with Walgreens was the largest settlement obtained by New Mexico against a single company over opioids, and followed five years of litigation. The agreement was reached in March, but its confidentiality provision was lifted on June 9. The settlement also includes requirements for Walgreens to adjust the way its pharmacies operate.
The settlement was reached after a non-jury trial last year in the state’s lawsuit against the company. The plaintiffs argued that Walgreens “dispensed millions of potentially harmful opioids into communities across New Mexico” by failing to red-flag prescriptions that weren’t needed for medical use, or by continuing to fill red-flag prescriptions. The judge overseeing that trial had not yet ruled on the state’s claims. Walgreens did not admit wrongdoing in the settlement.
Although $500 million may seem like a lot, it’s a fraction of what the government originally asked for. The state had asked the trial judge to order Walgreens to fund a $24 billion abatement plan, which would be funneled into state measures to combat the effects of drug abuse. Of course, it’s common for parties to settle for only a fraction of what plaintiff’s originally ask for.
Where is the settlement money going? According to the New Mexico Attorney General’s office, “the payments will be spread out over a 15-year-period, with 55% going to cities and counties and the other 45% to the state. All parties must use the funds for opioid remediation.”
Unfortunately, as a result of the relatively small settlement, some of the measures that New Mexico sought to accomplish with the larger $24 billion abatement plan will have to be scaled back. But Luis Robles, an attorney representing New Mexico in the case, seemed confident that this would nonetheless be “a substantial increase in available funding for opioid use disorder compared to what the state previously allocated.”
Pharmaceutical Lawsuits Draw to a Close
This recent case of Walgreens was the biggest, but far from the first settlement New Mexico was involved in with pharma companies. Last year New Mexico obtained another $274 million in settlements from fellow drug retailers Albertsons, CVS, Kroger, and Walmart. The latest Walgreens settlement brings the total to $1 billion brought into the state through opioid litigation.
Drug litigation is now winding down, but has resulted in more than $50 billion in settlements, including a $5.7 billion nationwide deal between states and Walgreens in which New Mexico did not take part.
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