By Timothy Puko and Sadie Gurman
WASHINGTON -- The Trump administration sued Walmart Inc.
Tuesday, accusing the retail giant of helping to fuel the nation's
opioid crisis by inadequately screening for questionable
prescriptions despite repeated warnings from its own
pharmacists.
The Justice Department's lawsuit claims that Walmart sought to
boost profits by understaffing its pharmacies and pressuring
employees to fill prescriptions quickly. That made it difficult for
pharmacists to reject invalid prescriptions, enabling widespread
drug abuse nationwide, the suit alleges.
Walmart responded in a public filing Tuesday, saying the lawsuit
"invents a legal theory that unlawfully forces pharmacists to come
between patients and their doctors, and is riddled with factual
inaccuracies and cherry-picked documents taken out of context."
"Blaming pharmacists for not second-guessing the very doctors
[the Drug Enforcement Administration] approved to prescribe opioids
is a transparent attempt to shift blame from DEA's well-documented
failures in keeping bad doctors from prescribing opioids in the
first place," Walmart said, adding that it "always empowered our
pharmacists to refuse to fill problematic opioids prescriptions,
and they refused to fill hundreds of thousands of such
prescriptions."
The country's largest retailer by revenue, Walmart has been
expecting this complaint and sued the federal government in October
to fight the allegations pre-emptively. That suit accuses the
Justice Department and DEA of attempting to scapegoat the company
for what it says are the federal government's own regulatory and
enforcement shortcomings.
The Justice Department's lawsuit alleges Walmart created a
system that turned its network of 5,000 in-store U.S. pharmacies
into a leading supplier of highly addictive painkillers. The
allegations date to June 2013, according to the suit.
"Many of these prescription drugs would never have hit the
streets if Walmart pharmacies had complied with their obligations,"
said Maria Chapa Lopez, a U.S. attorney in Tampa, Fla., who is one
of several prosecutors involved in the suit.
Walmart started with cut-rate prices on opioids that initially
drove shoppers to its stores, the government alleges. Middle
managers -- under direction from executives at company headquarters
-- pressured their pharmacists to work faster, the suit says,
believing that quick-fill prescriptions drew customers to stay and
keep shopping.
Many of the alleged problems centered in Walmart's compliance
unit, which oversaw dispensing nationwide from the company's main
office in Bentonville, Ark., the suit says. Walmart ignored
repeated warnings that the company had understaffed its pharmacies,
and that pressure to sell quickly was leading to mistakes and
putting patient health at risk, according to the complaint.
The U.S. lawsuit said this system made it difficult for
pharmacists to reject prescriptions from doctors who intentionally
overprescribe and, when they did, the customers would often just go
to a different Walmart. Pharmacists got little help from compliance
managers who for years didn't share information between stores and
in many cases refused requests to give blanket rejections to
suspect prescribers even when rival retailers already had done so,
the suit alleges.
"Rather than analyzing the refusal-to-fill reports, the
compliance unit viewed '[d]riving sales and patient awareness' as
'a far better use of our Market Directors and Market Manager's
time,'" the Justice Department said, quoting a company compliance
director. "Given the nationwide scale of those violations,
Walmart's failures to follow basic legal rules helped fuel a
national crisis."
The suit cited one example in which pharmacists allegedly warned
superiors that Walmart stores in Texas and Oklahoma were "getting
slammed" by suspect prescriptions from a doctor in East Texas who
was under federal investigation and that other stores had cut off
his clients.
One of the pharmacists said the doctor took most payments in
cash and refused to answer questions from the pharmacy.
In reply to one of the alleged warnings, a Walmart compliance
officer wrote in a December 2014 email that "an investigation of
itself is not a good reason to discontinue filling legitimate
prescriptions," according to the lawsuit.
The suit alleges that Walmart pharmacies continued filling this
doctor's prescriptions for another three years -- roughly 14,700
from 2014 to 2017, an average of more than 13 a day, for more than
1.5 million doses.
The doctor was later convicted of Controlled Substance Act
violations, among other federal crimes, and sentenced to 20 years
in federal prison, the suit said.
The federal lawsuit doesn't specify what penalties the
department is seeking. Officials there said that would be decided
as the case unfolds.
The Justice Department is taking action to help get Walmart to
recognize the role it must have in fighting the opioid crisis,
Jeffrey Clark, acting chief of the department's Civil Division,
said in an interview.
"It's not isolated or left off the hook just because the
pill-mill doctor writes the prescription," Mr. Clark said.
"Pharmacists have a duty not to just fill whatever prescription
comes in the door."
Walmart, in its suit, is seeking a declaration from a federal
judge that the government has no lawful basis for seeking civil
damages for the types of actions the Justice Department now
alleges. The suit names the department and Attorney General William
Barr as defendants, as well as the DEA and its acting
administrator, Timothy Shea.
The Justice Department previously launched a parallel 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, focusing instead on a civil lawsuit,
according to a person familiar with the matter.
The U.S. saw about 50,000 fatal opioid overdoses in 2019,
according to federal data, a record high that reversed what had
been a brief reprieve from steady increases a year earlier.
The Centers for Disease Control and Prevention said last week
that there is mounting evidence the crisis is worsening even
further during the Covid-19 pandemic, which has complicated
treatment while increasing isolation and stress.
President Trump has pushed the Justice Department to take action
against companies, though primarily opioid makers. In 2018 he asked
then-Attorney General Jeff Sessions to bring the federal
government's own "major lawsuit" against drug companies that "are
really sending opioids at a level that it shouldn't be
happening."
Since then, Purdue Pharma LP has pleaded guilty to three federal
felonies related to the marketing and distribution of its powerful
opioid painkiller OxyContin. That came as part of an $8.34 billion
settlement with the Justice Department.
Purdue is one of three drugmakers to file for bankruptcy in
recent years to negotiate a settlement of hundreds of lawsuits.
Counties and states are also nearing a $26 billion opioid
settlement with drugmaker Johnson & Johnson and three major
drug distributors.
Walmart is one of several other large companies that have been
targeted in such lawsuits, filed by more than two dozen states and
many local governments that claim aggressive marketing of
prescription painkillers helped fuel the crisis. About 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.
The federal government's lawsuit portrays a company in which
line pharmacists allegedly were often stressed out by the combined
pressure they felt from managers and from an unfolding crisis they
witnessed firsthand. Alleged company orders to work quickly didn't
allow them to scrutinize each suspect prescription, and they
repeatedly sought permission to use blanket rejections against
clinics they believed to be obvious pill mills, the suit says.
"If all of us got together and started filling out refusal to
fill" forms for one pill-mill prescriber, "that is all we would do
all day long," one Walmart pharmacy manager in Texas wrote in an
Feb. 6, 2015, email to a director in the compliance unit, the suit
says. "Other chains are refusing to fill for him which makes our
burden even greater. Please help us."
The compliance unit allegedly rejected that request and many
others, telling pharmacists they could decide only on a
case-by-case basis, according to the suit. That effectively led
Walmart pharmacists to supply abusers -- and encouraged more
doctors to send patients to Walmart pharmacies -- the government
alleges, because they didn't have time to review and complete the
required paperwork for thousands of individual rejections.
Walmart later reversed course and allowed blanket rejections for
suspect prescribers, the suit says. It doesn't say when, other than
to note that the company followed other major grocers and pharmacy
chains that gave that power to their pharmacists already.
In its own lawsuit, Walmart said nearly 70% of the doctors that
the federal government identified as problematic 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 its
suit.
U.S. attorneys allege Walmart's compliance managers should have
been tracking and sharing these reports from their own line
pharmacists to help reject these prescriptions but didn't do so. In
its 160-page complaint, the government details 20 alleged instances
in which it says Walmart ignored red flags, withheld information
from its pharmacists and failed to help them reject invalid
prescriptions, allowing hundreds and sometimes thousands of them to
be filled.
--Sarah Nassauer contributed to this article.
Write to Timothy Puko at tim.puko@wsj.com and Sadie Gurman at
sadie.gurman@wsj.com
(END) Dow Jones Newswires
December 22, 2020 16:07 ET (21:07 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
Walmart (NYSE:WMT)
Historical Stock Chart
From Aug 2024 to Sep 2024
Walmart (NYSE:WMT)
Historical Stock Chart
From Sep 2023 to Sep 2024