Walgreens and CVS agreed to a $10.7 billion settlement, the third large monetary agreement forced by a coalition of state attorneys general seeking redress from the opioid addiction crisis.
The agreement resolves allegations that both national pharmacy chains contributed to the nation’s opioid addiction crisis by failing to oversee how medications were distributed.
Under the agreements, CVS will pay $5 billion and Walgreens will pay $5.7 billion. Walmart agreed to pay $3 billion last month.
CVS and Walgreens also will be subject to court-ordered injunctive relief that requires the pharmacies to monitor, report, and share data about suspicious activity related to opioid prescriptions and to implement and maintain robust compliance departments and practices. These deals follow a similar agreement with Walmart in November.
“I am proud of the bipartisan work we are doing across state lines to hold retail pharmacies responsible,” Illinois Attorney General Kwame Raoul said in a statement.
The negotiations for the agreements with CVS and Walgreens have been led by the attorneys general of California, Colorado, Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Nebraska, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, Tennessee, and Texas.
“This settlement is another win in our ongoing fight to bring help and healing to California communities harmed by the opioid crisis,” California Attorney General Rob Bonta said in a statement.
So far, the Wisconsin Counties Association has been the only municipal entity to explore securitizing the opioid settlements in a manner similar to what occurred with tobacco settlements. WCA told The Bond Buyer in November it is “studying the feasibility of securitizing counties’ share of a $26 billion national settlement with pharmaceutical companies sued for their role in distributing deadly and addictive painkilling drugs.”
The counties group is awaiting a legal feasibility review before its members would decide if a tobacco-settlement style securitization makes financial sense for them, according to the article.
Oregon Attorney General Ellen Rosenblum worked with the coalition of state attorneys general, which represented local governments across the nation in the settlement effort, according to a news release.
“Pharmacies were a key link in the supply chain that contributed to the greatest drug-induced public health crisis in modern America. This may seem like a lot of money — and it is — but compared to the harm caused by America’s largest pharmacy chains, it barely scratches the surface,” Rosenblum said in a statement.
The $10.7 billion settlement will be divided among sign-on states, local governments and tribes, and will prioritize abatement and remediation of the opioid crisis, the coalition of attorneys general announced on Monday.
The terms of these agreements will now go to the states for review. Each state will have until the end of 2022 to join, after which the Walmart, Walgreens, and CVS agreements will go to local governments around the country for sign-on during the first quarter of 2023. A sufficient percentage of states and local governments must join the settlements for them to go into effect.
Most of Walmart’s portion of the settlement will be paid during the first year; CVS’ payments will be spread over 10 years; Walgreens’ payments will be spread over 15 years. If there is sufficient sign-on, payments will begin during the second half of 2023.
“Too many have died and too many families are broken by virtue of — plain and simple — corporate greed, and that includes pharmacies,” Rosenblum said. “I appreciate that 100% of Oregon’s counties and cities signed onto our previous settlements with Johnson & Johnson and the three major opioid distributors. I hope they will sign onto these settlements, as well, in order to maximize how much Oregon can receive.”