Walmart Files Pre-emptive Lawsuit Against Federal Government in Opioid Case
October 22 2020 - 5:43PM
Dow Jones News
By Brent Kendall and Sara Randazzo
Walmart Inc. sued the federal government in an attempt to strike
a pre-emptive blow against what it said is an impending
opioid-related civil lawsuit from the Justice Department.
The retail giant said in a lawsuit filed Thursday that the
Justice Department and Drug Enforcement Administration are seeking
to scapegoat the company for the federal government's own
regulatory and enforcement shortcomings in combating the opioid
crisis. Walmart said the government is seeking steep financial
penalties against the retailer for allegedly contributing to the
opioid crisis by filling questionable prescriptions.
The suit names the department and Attorney General William Barr
as defendants, as well as the DEA and its acting administrator,
Timothy Shea. It is seeking a declaration from a federal judge that
the government has no lawful basis for seeking civil damages from
the company based on claims pharmacists filled valid prescriptions
that they should have known raised red flags.
Walmart, which operates more than 5,000 in-store pharmacies in
the U.S., said the government's "threatened action would be
unprecedented." It said the government hasn't alleged that the
company was filling altered prescriptions, or that its pharmacists
had inappropriate relationships with patients or doctors.
"In the shadow of their own profound failures, DOJ and DEA now
seek to retroactively impose on pharmacists and pharmacies
unworkable requirements that are not found in any law and go beyond
what pharmacists are trained and licensed to perform," the company
said in the lawsuit, filed in the U.S. District Court for the
Eastern District of Texas.
The Justice Department didn't immediately respond to a request
for comment.
Walmart said the department has identified hundreds of specific
doctors as having written problematic prescriptions that company
pharmacists allegedly shouldn't have filled, according the
government. But nearly 70% of those doctors continue to have active
DEA registrations, the company said.
"In other words, defendants want to blame Walmart for continuing
to fill purportedly bad prescriptions written by doctors that DEA
and state regulators enabled to write those prescriptions in the
first place and continue to stand by today," Walmart said in the
suit.
Walmart is one of several large companies that have been
targeted in lawsuits by state and local governments for allegedly
helping to fuel the opioid crisis. Around 3,000 of the cases have
been consolidated in a federal court in Ohio, where a judge has
pressed both sides to settle for nearly three years.
Plaintiffs focused less on Walmart in the early days of the
opioid litigation, though the company has since been sued by
counties and a handful of states across the country for its role as
both a distributor of opioids to its own stores and as a
pharmacy.
Two Ohio counties slated to take Walmart to trial next year
accuse the retailer of failing to stop high-volume orders of
controlled substances that it should have known were being diverted
for improper uses. In an amended complaint filed in June, the
plaintiffs allege Walmart had no formal policy to catch suspicious
orders until 2014, and that even afterward, it never flagged any
such orders to the DEA. The lawsuit cites the Ohio city of
Cortland, where it says one Walmart store bought enough oxycodone
and hydrocodone from 2006 to 2014 to supply 29 pills a year for
each of the some 7,100 people who lived there.
Walmart pharmacists felt pressure to fill prescriptions quickly,
the plaintiffs allege, and had incentive bonuses tied to volume.
Walmart stopped serving as its own distributor of controlled
substances in 2018.
Walmart has denied the allegations and said that opioid
dispensing is a small part of the company's business.
The Justice Department previously launched a criminal
investigation, based out of the U.S. attorney's office for the
Eastern District of Texas, related to Walmart's dispensing of
opioids. The department's leadership in Washington decided in 2018
against bringing charges, according to the company's lawsuit.
The department's decision not to prosecute was reported
previously by ProPublica. Walmart in its complaint alleged federal
prosecutors "tried to use the threat of criminal indictment to
pressure the company into paying a massive civil penalty."
The company argues in the lawsuit that the federal government
was placing it in an untenable position, because pharmacists face
professional and legal risks -- and potential harm to patients --
if they reject prescriptions, but face federal liability if they do
fill them and the government determines they shouldn't have.
Initial civil settlement talks in the broader opioid litigation
have focused on the three biggest drug distributors in the country,
Cardinal Health Inc., AmerisourceBergen PLC and McKesson Corp., as
well as major drugmakers like Johnson & Johnson. States are
nearing a $26.4 billion settlement with those four companies and
are in settlement discussions with others up and down the
pharmaceutical supply chain.
Some targets in the litigation, including OxyContin maker Purdue
Pharma LP, have filed for bankruptcy to try to resolve the cases.
Purdue this week agreed to plead guilty to three felonies related
to its marketing and distribution of OxyContin, as part of an $8.34
billion settlement of civil and criminal investigations pursued by
the Justice Department.
Walmart was among six pharmacies slated to go to trial in
federal court in November in the cases of Ohio's Cuyahoga and
Summit counties. The judge, however, recently delayed the trial
indefinitely, citing the coronavirus pandemic. That trial was set
to focus on the pharmacies' roles as distributors of opioids to
their own stores but wouldn't have included allegations related to
dispensing drugs to customers.
Write to Brent Kendall at brent.kendall@wsj.com and Sara
Randazzo at sara.randazzo@wsj.com
(END) Dow Jones Newswires
October 22, 2020 17:28 ET (21:28 GMT)
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