Judge orders CVS, Walmart and Walgreens to fund $650M opioid abatement

CVS, Walmart and Walgreens must pay $650 million to alleviate the opioid crisis in two Ohio counties, a judge has ruled.

Wednesday’s order, by U.S. District Judge Dan Polster of the Northern District of Ohio, provides an abatement program to Trumbull County and Lake County, which won a jury verdict on Nov. 23 that found all three pharmacies had created a public nuisance. Polster, who said he would appoint an administrator to oversee the funds, heard arguments from both sides earlier this year on how much the pharmacies should pay to the counties.

“In the end, neither party adequately put forth a reasonable plan the court could adopt wholesale and would be upheld,” Polster writes. “Because defendants failed to offer their own, realistic abatement plan, the court’s only real choice is to adopt in large part plaintiffs’ proposed abatement plan. However, the court is not blind to the fact that plaintiffs’ plan asks for too much.”

Plaintiffs had sought more than $3 billion—an amount the judge called the “sun and the moon.”

“We got a good chunk of the moon,” says Mark Lanier, of The Lanier Law Firm in Houston, who argued for the two counties during the abatement phase along with Peter Weinberger, of Cleveland’s Spangenberg Shibley & Liber.

Related: The new CDC opioid guide: An opportunity for employers to lead the way for change

“The amount is going to make a huge difference in these counties,” he says. “And injunctive relief may be the most important thing of all. It establishes the accountability that the pharmacies should have done internally 20 years ago, and it’s finally in place, and it can stop the future tragedy from continuing.”

Under the plan, the pharmacies are expected to pay an initial $86.7 million within the first two years. The funds will be dispersed over 15 years.

Lead plaintiffs’ lawyers in the case, the third bellwether trial in the opioid multidistrict litigation, called the decision “years in the making.” In addition to Lanier and Weinberger, the lead plaintiffs lawyers are Jayne Conroy, of New York’s Simmons Hanly Conroy; Paul Farrell of Farrell & Fuller in San Juan, Puerto Rico; Joe Rice of Motley Rice in Mt. Pleasant, South Carolina; and Frank Gallucci of Cleveland’s Plevin & Gallucci.

“First, they were found liable by a jury to have fueled a public nuisance caused by dispensing a staggering influx of pills into the local community, and now, the court has ordered them to pay to help combat the public health crisis they helped create,” they write. “Today’s decision means that the Lake County and Trumbull County communities will soon receive the long overdue recovery funds they need to address the effects of the opioid epidemic locally.”

‘Riddled With … Mistakes’

All three pharmacies said they planned to appeal the decision.

“Plaintiffs’ attorneys sued Walmart in search of deep pockets, and this judgment follows a trial that was engineered to favor the plaintiffs’ attorneys and was riddled with remarkable legal and factual mistakes,” Walmart says in a statement. “Instead of addressing the real causes of the opioid crisis, like pill mill doctors, illegal drugs and regulators asleep at the switch, plaintiffs’ lawyers wrongly claimed that pharmacists must second-guess doctors in a way the law never intended and many federal and state health regulators say interferes with the doctor-patient relationship.”

CVS noted that opioids are prescriptions approved by the U.S. Food and Drug Administration.

“We look forward to the appeals court review of this case, including the misapplication of public nuisance law,” CVS’s statement says.

Walgreens emphasized that it did not distribute opioids to pill mills or internet pharmacies that fueled the crisis.

“The facts and the law did not support the jury verdict last fall, and they do not support the court’s decision now,” a Walgreens spokesperson writes. “The court committed significant legal errors in allowing the case to go before a jury on a flawed legal theory that is inconsistent with Ohio law and compounded those errors in reaching its ruling regarding damages.”

“The plaintiffs’ attempt to resolve the opioid crisis with an unprecedented expansion of public nuisance law is misguided and unsustainable,” he continues.

The order is one of the few to establish an abatement fund in an opioid case. In 2019, Oklahoma’s Cleveland County District Court Judge Thad Balkman issued a $465 million judgment following a bench trial between the state of Oklahoma and Johnson & Johnson. But, on Nov. 9, the Oklahoma Supreme Court reversed that decision, concluding that the judge “went too far” in holding a drug manufacturer liable under the state’s public nuisance law.

The order also follows an Aug. 10 bench verdict against Walgreens in a case brought by the city and county of San Francisco. U.S. District Judge Charles Breyer found that Walgreens failed to conduct due diligence when filling prescriptions over a period of 15 years.

“I’ve always believed the pharmacies are one of the most culpable defendants,” Lanier says. “They made money off of every pill they sold. They were the last line of defense. They’ve been warned about it. They’ve been fined by the DEA over and over again.”

But manufacturers and distributors have also faced trials. On Dec. 30, a jury found manufacturer Teva and its subsidiary, Anda, liable in an opioid trial brought by the state of New York and two Long Island counties.

Two other judges, in California and West Virginia, sided with manufacturing and distributor defendants in other opioid bench trials.

Polster, in his order, determined the three pharmacies should be held responsible for one third of the total costs of the opioid crisis, citing the roles that manufacturers and distributors played. He relied on a defense expert to reduce the amount of the plaintiffs’ proposal, accounting for other causes of the opioid crisis, and cut plaintiffs’ proposed programs that didn’t have direct ties to the treatment and prevention of opioid addiction and abuse.

Read more: CVS’s latest moves to expand primary care and health insurance offerings

But he also determined that the pharmacies should be held jointly and severally liable given they “dispersed massive quantities of red-flagged prescriptions” and their dispensing conduct was “both knowing and intentional.”

He relied heavily on the plaintiffs’ expert and criticized the pharmacies numerous times for failing to provide an alternative to plaintiffs’ proposal other than drug disposal sites and a drug takeback program.

“This court gave the defendants the opportunity — in fact, ordered them — to provide the court with their own abatement plan,” he writes. “The defendants did not even attempt to suggest any plausible lesser alternatives. Had defendants provided the court with a different proposal offering other effective interventions that might cost less than those proposed by plaintiffs, the court would have certainly considered them.”