CVS and Walgreens have reached a settlement totaling more than $10 billion, settling allegations that the companies failed to adequately oversee opioid prescriptions, thereby contributing to the opioid crisis.
CVS’ is slated to pay $4.9 billion to states and local governments and an additional $130 million to tribal communities while Walgreens will pay $4.95 billion to states and local governments and an additional $750 million in attorney fees and costs. In addition to the financial commitments, each company has made commitments to compliance changes, including additional layers of opioid prescription reviews and new mandatory training programs.
CVS is to make ten annual payments – each made up of Base Payments – and additional incentive payments made in years two through ten. The Base Payments in years two through ten are less than the Base Payment in Year 1. Walgreens, on the other hand, is to make fifteen annual payments, also made up of annual Base Payments and additional incentive payments in years two through 15.
The settlements were reached by a coalition of 17 attorneys general, led by Illinois Attorney General Kwame Raoul. Raoul released a statement, saying, “The opioid epidemic has tragically affected too many Illinois families that have experienced addiction or even the death of a loved one.” He continued, noting that the “$10.7 billion settlement with Walgreens and CVS builds upon the important progress we’ve already achieved with previous settlements, but more importantly, it holds both companies accountable.”
“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, chief policy officer and general counsel, CVS Health, said in a release. “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.”
“As one of the largest pharmacy chains in the nation, we remain committed to being a part of the solution, and this settlement framework will allow us to keep our focus on the health and wellbeing of our customers and patients, while making positive contributions to address the opioid crisis,” Walgreens said in a statement.
As is often the case, neither company admitted to any wrongdoing as part of the settlements.
What’s Next?
States had until the end of 2022 to sign on to the settlement, and now we are in a 90-day sign-on period for local governments to sign on. States such as New Hampshire, New Jersey, Connecticut, and New York are some of the state that joined the settlement.
Payments are expected to begin during the second half of 2023.
A copy of the CVS settlement agreement can be found here.
A copy of the Walgreens settlement agreement can be found here.