Pharmacy retailer CVS Health Corporation will avoid going to court against the U.S. government next week.
Instead, the company has agreed to pay $484 million to settle a landmark opioid case with the office of Florida Attorney General Ashley Moody amid claims that the company contributed to the prescription drug crisis in the state.
CVS was scheduled to begin a jury trial alongside a handful of other “Big Pharma” companies in early April.
According to The Wall Street Journal, the government settlement is the first of its kind for CVS and is expected to set precedence for other opioid-related complaints around the country.
The Florida lawsuit claimed that CVS “distributed and dispensed prescription opioid pain medication improperly in a fashion that has caused harm to the health of” the state and its residents.
Florida sued the pharmacy retailers back in 2018 under then-Attorney General Pam Bondi, claiming the retailers “failed in their duties under Florida law to stop suspicious orders of opioids they received.” The industry is accused of manipulating the opioid supply and demand dynamic to its benefit.
CVS was one of a handful of defendants named in the Florida complaint — a list that includes the pharmacy chain’s chief competitor, Walgreens Boots Alliance.
Walgreens did not settle and will battle it out in a Florida court on April 5 — a risk, as last year, a jury in Ohio held pharmacy chains including CVS, Walgreens, and Walmart responsible for fueling the opioid crisis in a pair of counties.
According to Walgreens, a decade-old settlement already on the books addresses the latest allegations, calling what it described as “attacks” on its pharmacists “unjustified.”
In addition to CVS, Teva Pharmaceutical Industries and Allergan reached settlements with Florida’s AG. In total, the three companies paid over $800 million. The payments will be spread across nearly two decades.
The Florida AG explained that the proceeds will be used to fix the damage the opioid crisis inflicted upon the state and its communities. Some of CVS’s settlement payment will go to specific cities and counties in the state to fund opioid abatement, prevention, and treatment efforts.
American Opioid Crisis
Court dockets are full of pending cases against the pharmaceutical sector for its alleged role in the opioid crisis. The pharmaceutical industry maintains that it has played by state and federal rules and has done its best to prevent prescription drugs from falling into the wrong hands.
The United States’ opioid epidemic has claimed the lives of over half a million Americans in the past two decades. Florida suffered nearly 2,800 deaths related to opioid overdoses in 2016, per the National Institute on Drug Abuse.
Wall Street Reaction
Wall Street analysts targeted shares of CVS on the heels of its settlement. A Deutsche Bank analyst downgraded the stock and forecast that the company’s exposure to opioids will weigh on shares to the tune of 2.5% for the next 2 years.
Image From Trading View
“Putting these claims behind us is in the best interest of all parties and helps sharpen our focus on delivering a personalized, connected health care experience for the millions of consumers who rely on us,” CVS’s general counsel Thomas Moriarty told Bloomberg in an email.
By settling, CVS has made no admission of guilt.
