In late October and early November 2022, two relatively large opioid settlements were announced: one with CVS Health and one with McKinsey.
CVS Health Settlement
On November 2, 2022, CVS Health agreed to pay $5 billion to settle almost all of the opioid-related lawsuits and claims the company has been facing. If approved, CVS Health will pay $4.9 billion over the next ten years (beginning in 2023) to myriad states and political entities (i.e., counties and cities) and $130 million to United States tribes. CVS noted that the agreement would “fully resolve claims dating back a decade or more and is not an admission of any liability or wrongdoing” and that the company would continue to “defend against any litigation that the final agreement does not resolve.”
CVS also noted that by spreading the settlement payments over decade, the company would be able to “continue to invest in its strategic priorities.”
Additionally, in announcing the proposed settlement, CVS highlighted some of the actions it has taken to fight opioid abuse, including investing in technology and procedures to support pharmacists in exercising their professional obligations; educational programs for teens and parents; rolling out safe medication disposal units in stores and local police departments across the country, which have collected more than 4.5 million pounds of unused medication; and installing time delay safes in more than 7,650 pharmacies across the country to help deter opioid robberies.
“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,” said Thomas Moriarty, Chief Policy Officer and General Counsel, CVS Health. “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.”
McKinsey Settlement
On October 27, 2022, Reuters announced that consulting firm McKinsey & Co agreed to settle claims by local governments and school districts throughout the country. In those cases, McKinsey was accused of fueling the opioid epidemic through its work with Purdue Pharma LP (the manufacturer of OxyContin) and other drug companies. The McKinsey deal has not been made public, as it was disclosed in a court filing in San Francisco federal court.
This agreement by McKinsey follows a settlement formerly reached with all of the United States and territories. However, it does not entirely clear McKinsey from any potential additional liability as McKinsey is still facing claims by health insurance plans, Native American tribes, and families of children exposed to opioids in utero.
McKinsey is also facing an investigation by the United States House of Representatives over whether some if its consultants were acting as “double agents,” working both for the federal government and opioid manufacturers, leveraging their connections to obtain more consulting work and trying to influence government officials to advance the interests of opioid clients.
Additional Settlements
Walgreens and Walmart have also reached deals to settle their own opioid-related claims, $5.7 billion and $3.1 billion, respectively. The Walgreens settlement is to be paid over the course of 15 years while the Walmart settlement is largely paid up front.
According to Reuters, the CVS and Walgreens settlements are subject to reduction if not enough government plaintiffs sign off on the agreement.
If the CVS, Walgreens, and Walmart settlements are finalized, it may effectively end much of the litigation over opioids as much of the pending litigation is against smaller pharmacies, such as Rite Aid.