Pharmacy chains CVS, Walgreens, Walmart helped fuel opioid epidemic, U.S. jury finds By Reuters

2/2© Reuters. FILE PHOTO: People walk by a CVS pharmacy store in Manhattan, New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly2/2

By Nate Raymond

(Reuters) - A federal jury on Tuesday found that pharmacy chain operators CVS Health Corp (NYSE:CVS), Walgreens Boots Alliance (NASDAQ:WBA) Inc and Walmart (NYSE:WMT) Inc helped fuel an opioid epidemic in two Ohio counties, in the first trial the companies have faced over the U.S. drug crisis.

Jurors in Cleveland federal court after six days of deliberations concluded that actions by the pharmacy chains helped create a public nuisance that resulted in an oversupply of addictive pain pills and the diversion of those opioids to the black market.

The verdict has the potential to give state and local governments new leverage in their efforts to negotiate settlements that would resolve thousands of other cases against the pharmacy operators.

"The judgment today against Walmart, Walgreens and CVS represents the overdue reckoning for their complicity in creating a public nuisance," the plaintiffs' lawyers said in a joint statement.

Jurors only assessed liability. It is up to U.S. District Judge Dan Polster to decide how much the companies owe to abate, or address, the public nuisance in Ohio's Lake and Trumbull counties.

The counties' lawyers have said the costs are potentially $1 billion for each county. A trial on the issue is expected next year.

Stock prices for the companies briefly fell after the verdict but quickly rebounded and were all up less than 1%.

CVS, Walgreens and Walmart said they would appeal the verdict, arguing it ran contrary to the facts and that it misapplied public nuisance law to hold them liable under a novel legal theory that courts in California and Oklahoma have recently rejected in similar cases against drugmakers.

"We will appeal this flawed verdict, which is a reflection of a trial that was engineered to favor the plaintiffs' attorneys and was riddled with remarkable legal and factual mistakes," Walmart said.

U.S. officials have said that by 2019 the health crisis led to nearly 500,000 opioid overdose deaths over two decades.

Over 100,000 people died from drug overdoses during the 12-month period ending April 2021, the U.S. Centers for Disease Control and Prevention said in a report last week, a record driven in large part by deaths from opioids like fentanyl.

THOUSANDS OF LAWSUITS

More than 3,300 opioid lawsuits have been filed nationally against drug manufacturers, distributors and pharmacies, culminating with many of the companies - though not the pharmacies - agreeing to proposed global settlements.

The three largest U.S. distributors that supply pharmacies and hospitals - McKesson Corp (NYSE:MCK), Cardinal Health Inc (NYSE:CAH) and AmerisourceBergen (NYSE:ABC) Corp - and drugmaker Johnson & Johnson (NYSE:JNJ) in July proposed paying up to $26 billion to settle most of the lawsuits against them.

A bankruptcy judge in September approved a settlement by OxyContin maker Purdue Pharma LP and its wealthy Sackler family owners that the company values at more than $10 billion.

The pharmacies, however, went to trial despite the urging of the judge to settle.

At trial, lawyers for Lake and Trumbull counties argued that the pharmacies failed to ensure opioid prescriptions were valid and allowed excessive quantities of addictive pain pills to flood their communities.

The pharmacy operators denied the allegations. They said they took steps to guard against diversion of pills and blamed others, including doctors, regulators and drug traffickers, for the epidemic.

The verdict followed recent setbacks for plaintiffs pursuing some of the other opioid cases nationally.

Oklahoma's top court on Nov. 9 overturned a $465 million judgment against J&J, and a California judge this month ruled in favor of four drugmakers in a case brought by several large counties.

Other trials are underway in New York involving drugmakers Teva Pharmaceutical Industries (NYSE:TEVA) Ltd and AbbVie Inc (NYSE:ABBV), and in Washington state with the three distributors.

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