CVS and Walgreens announced on Wednesday that they had reached tentative agreements to pay around $5 billion each to settle thousands of lawsuits over their role in the opioid crisis, according to The New York Times.
In an agreement that would make it the first major pharmacy chain to reach a nationwide settlement of lawsuits over how it handled prescriptions for powerful and addictive prescription opioid painkillers, CVS would pay around $5 billion over 10 years, reported CBS News.
The proposed deal marks one of the most significant opioid settlements. Wal-Mart is also nearing a $3.1 billion settlement for its apparent role in the epidemic.
As part of the settlement agreement, CVS will pay Texas $276 million, adding to the current $2.37 billion figure the state has already received from drug distributors.
Texas Attorney General Ken Paxton reached a $300 million settlement with pharmaceutical giant Teva in February.
CVS announced its proposed deal on Wednesday after it released its third-quarter earnings, reporting a $3.4 billion loss, but did not admit liability or wrongdoing. It said non-financial terms of the settlement remain to be resolved.
In the lawsuits, governments said pharmacies were filling prescriptions that they should have flagged as inappropriate, according to CBS News.
AmerisourceBergen, Cardinal Health, and McKesson reached a finalized combined settlement worth $21 billion, and Johnson & Johnson also completed a $5 billion deal.
Since 2013, several state, local, and tribal governments have sought to make companies across the pharmaceutical industry pay to reduce the ongoing costs associated with addiction, death, and crime in an epidemic that began with prescription painkillers.
Major pharmacy chains have been some of the last holdouts to reach settlements, indicating that the nation may be turning the corner on this issue from a litigation standpoint. Still, the epidemic rages on, with overdose deaths rising to record levels last year, according to federal data.
For years, the pharmacies maintained that they bore no responsibility for the epidemic. The companies claimed they had only filled prescriptions of government-approved medications ordered by doctors.
Plaintiffs have argued that companies turned a blind eye and ignored red flags about the large quantities of prescription opioids they were dispensing.
“My sense is that we’re nearing the end of the saga,” said Alexandra Lahav, who teaches complex litigation at Cornell University Law School.
Citing recent court decisions, she added: “Things weren’t looking super for them, so it makes sense that they were finally coming to the table. And I’m guessing the rest of the defendants are going to follow.”
The nationwide tally of finalized and completed settlements between companies and governments now sits at $45 billion.
“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’s 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.”
Walgreens said it would pay the states $4.79 billion over 15 years and $154.5 million to the tribes.
“This settlement framework will allow us to keep our focus on the health and well-being of our customers and patients while making positive contributions to address the opioid crisis,” Walgreens said.
Lawsuits against several companies remain; with the announcement of the CVS and Walgreens deals, attention will now shift to how the funds will be distributed and used. Under the terms of the deals, most of the money must be put toward addressing the continuing epidemic, said the CBS report.
Lahav said that despite billions of dollars in settlements being announced, “They are a drop in the bucket compared to the damage, which is ongoing and massive.”
