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Strung-Out On Liability: A Look At How Community Pharmacies Found Themselves Liable In The Midst Of Opioid Litigation.

Published onFeb 20, 2024
Strung-Out On Liability: A Look At How Community Pharmacies Found Themselves Liable In The Midst Of Opioid Litigation.

The opioid epidemic has claimed nearly 645,000 lives within the last two decades and continues to wreak havoc as synthetic opioids, such as fentanyl, become more prevalent in our communities. The emergence of America’s widespread dependence on unlawfully produced opioids was facilitated by Oxycontin, a revolutionary medication introduced in 1996 for pain relief that was frequently prescribed beyond necessity. As communities grapple with high costs linked to the epidemic, expansive litigation has emerged in the form of multidistrict litigation (MDL), “where more than 2,400 cases [have been] filed by local governments (and other non-governmental plaintiffs),” and through state court actions brought on by the states themselves. Ultimately, these cases have evolved over the last decade to encompass a wide range of defendants, no matter how small their share of liability.

 The early 2000s saw an emergence of lawsuits aimed at Purdue Pharma, the creator of the prescription drug Oxycontin. Individual plaintiffs brought personal injury claims, alleging novel liability theories such as negligence, strict product liability, negligent marketing, defective designs, and fraudulent misrepresentation. During the initial years, plaintiffs struggled to overcome summary judgment as Purdue Pharma raised issues with causation, statutes of limitations, and an inference of misuse by the prescribed plaintiff. Plaintiffs also had immense difficulty overcoming the mere fact that the drug and it’s label were approved by the Food and Drug Administration.

 Lawsuits brought parens patriae, by state officials, “have been far more successful than individual suits or class actions.” Here, states maintain that “[they have] a standing to sue to protect its ‘quasi-sovereign’ interests.” Such interests can include “interest[s] in the health and well-being—both physical and economic—of its residents in general.” In these cases, liability theories were based on negligent marketing, public nuisance, and consumer protection laws. Opioid manufacturers opted to settle for amounts nearing $50 billion rather than face the tenacious and resourceful state attorney general’s offices in court.

 In recent years, there has been a significant increase in litigation against opioid manufacturers. This has led to several high-profile settlements, including a $5 billion settlement with Janssen Pharmaceuticals and a $6 billion settlement with Purdue Pharma and the Sackler family. The primary objective of these suits is to seek restitution for a wide range of epidemic-related costs, such as increased police intervention, Medicaid expenses, drug rehabilitation programs, and emergency response costs.

 State governments, after successfully litigating against opioid manufacturers, aimed their sights toward drug distributors who supplied opioids to pharmacies and health care providers. In 2022, “[t]he three largest U.S. drug distributors [McKesson Corp., AmerisourceBergen, and Cardinal Health Inc.] . . . agreed to finalize a proposed $26 billion settlement . . . to resolve around 3,000 lawsuits [filed] by state and local governments.” These claims alleged violations of the Controlled Substances Act (“CSA”) by failing to “maintain effective controls against [opioid] diversion.” Additionally, distributors allegedly failed to “report suspicious orders” made by pharmacies and providers to the Drug Enforcement Agency (“DEA”). As a result of these failures, local communities saw increased crime and the overburdening of their public health resources, thus constituting an actionable public nuisance.

By the same token, chain retail pharmacies next found themselves staring down the barrel of liability. In 2022, CVS Health Corp., Walgreens Boot Alliance Inc., and Walmart Inc. agreed to pay nearly $13.8 billion to settle thousands of lawsuits brought on by state localities. Finding themselves as the fourth link in the chain, behind distributors, medical prescribers, and manufacturers, retail pharmacies were accused of “failing to report their knowledge of suspicious orders . . . and failing to protect against diversion,” of which included the failure to recognize “red flags” in their fulfillment of opioid prescriptions. These red flags included prescriptions made to many patients with similar dosage amounts from a single provider, preprinted or stamped prescriptions, and visibly incoherent patients.

 Retail pharmacies, like CVS and Walgreens, were criticized for “fail[ing] to meaningful [sic] apply policies and procedures, [and] . . . train employees in its retail pharmacies on identifying and reporting potential diversion.”  Further adding to the inability to recognize red flags, pharmacists were allegedly pressured to quickly fill prescriptions, “putting profits ahead of safety,” in an attempt to meet performance metrics. These practices led pharmacies to overlook patient safety and the accuracy of prescriptions.

 Pharmacies are also alleged to have partnered with opioid distributors to bolster marketing for opioids, some of which were then under investigation and facing legal action by the Department of Justice (“DOJ”). CVS allegedly sent letters to patients encouraging the continued usage of certain opioids despite ongoing litigation, providing rebates and discounts on the drugs, and equipping pharmacists with “misleading marketing messages . . . [about the] risk of addiction and . . . potential for abuse.” As a result, pharmacies found themselves as a contributor to the oversupply of opioids in local communities.

 Litigation against retail pharmacies has slowed within the last year, primarily due to a $13.8 billion settlement reached with CVS, Walgreens, and Walmart, and a $1.4 billion settlement with the Kroger Co. in September. The next target, which appears to be Rite Aid, is now on the receiving end of a complaint filed by the DOJ alleging a failure to report red flags, “knowingly filling unlawful prescriptions”, and “intentionally deleting internal notes [identifying] suspicious prescribers.” However, Rite Aid has recently filed for bankruptcy and a resolution to their ongoing litigation is uncertain at this time.

Creighton Knight is a second-year student at Wake Forest University School of Law who recently joined the editorial staff of the Journal of Business and Intellectual Property Law. Prior to law school, he earned his bachelor’s degree from Wofford College. Upon graduation, Creighton plans on working in plaintiffs’ litigation.

Reach Creighton here:


Email: [email protected]

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