Walmart to Settle State, Local Opioid Claims for $3.1 Billion

Walmart Inc. (WMT) announced a $3.1 billion settlement with 43 states over claims its pharmacies contributed to opioid addiction, joining two other big pharmacy chains among the last major corporate defendants to resolve such lawsuits.

The Nov. 15 announcement accompanying the leading retailer's quarterly earnings results brings the total value of settlements reached in the litigation to more than $54 billion.

Rivals Walgreens Boots Alliance Inc. (WBA) and CVS Health Corp. (CVS) had already confirmed their participation in the settlement. Walmart said in a securities filing that it expects to pay the bulk of its settlement by January 2024, provided the participating states approve the offer and ensure most municipalities within their borders also accept it. Walgreens agreed to pay $5.7 billion over 15 years, and CVS Health $5 billion over 10 years under settlements announced earlier this month. The three pharmacy chains made no admission of wrongdoing under the settlement, with Walmart saying it disputes the plaintiffs' allegations.

Walmart recorded a $3.3 billion charge for the prospective settlement and associated costs in its most recent quarter, while CVS wrote off $5.2 billion in opioid litigation charges in its third quarter.

Earlier this year, drugmaker Johnson & Johnson (JNJ) and wholesale distributors McKesson Corp. (MCK), AmerisourceBergen Corp. (ABC), and Cardinal Health Inc. (CAH) agreed to settle similar claims for $26 billion. Drugmakers Purdue Pharma, Teva Pharmaceutical Industries Ltd. (TEVA), AbbVie Inc. (ABBV), Mallinckrodt, and Endo International have agreed to settle similar claims by the same plaintiffs. Purdue, Mallinckrodt and Endo all filed for bankruptcy, with Mallinckrodt exiting Chapter 11 protection earlier this year. Supermarkets and pharmacies operator The Kroger Company (KR) has yet to settle.

Walmart still faces a civil lawsuit by the U.S. Justice Department alleging the company's pharmacies dispensed "thousands of invalid prescriptions" and failed to report suspicious orders.

Walmart has said such litigation forces its pharmacists to either reject valid prescriptions and face lawsuits by patients and regulators, or else fill them and be held accountable for the consequences of subsequent misuse.

The suits by state and local governments against opioid manufacturers, wholesale distributors, and retailers are based on the common law concept of public nuisance previously used to press claims against the suppliers of legal but potentially harmful products including asbestos, lead paint, tobacco, and firearms.

In August, a U.S. district court judge assessed damages of $650.6 million against Walmart, Walgreens, and CVS after a jury ruled the companies contributed to the public nuisance of opioid addiction in two Ohio counties. The same month, a U.S. district judge in San Francisco ruled Walgreens had contributed to opioid addiction in that city.

More than 564,000 Americans died after overdosing on opioids, whether illicit or prescribed, between 1999 and 2020, according to the Centers for Disease Control and Prevention. The rate of fatal opioid overdoses has increased since, bringing the opioids death toll over the last 23 years near that of deaths in battle during all the wars in U.S. history.