CVS and Walgreens, the two largest pharmacy chains in the U.S., will pay Connecticut $127 million as part of a $10.7 billion settlement of claims arising from investigations of the “pharmaceutical addiction industry,” Attorney General William Tong said Monday.
Neither company acknowledges wrongdoing in agreeing to structured settlements that commit CVS to paying $5 billion over 10 years and Walgreens to $5.7 billion over 15 years. The companies acknowledged the basic agreement last month.
CVS and Walgreens join Walmart, which previously agreed to pay $3.1 billion, in settling with a multi-state coalition of attorneys general who have pursued damages from the manufacturers, retailers and others involved in feeding a national opioid crisis.
“What this demonstrates is that, one by one, we are holding every player in the addiction industry accountable and forcing them to turn over billions of dollars for treatment and prevention nationwide,” Tong said.
The money will be shared by states and municipalities and can be used for remediating the damages caused by opioids. If a sufficient number of states sign off on the agreement, payments will be begin in the second half of 2023.
Connecticut’s share would be $162 million, which includes the $127 million from CVS and Walgreens. States have until the end of the year to agree to the terms, which have been accepted by Connecticut.
About 85% will go to states and 15% to municipalities.
Tong said the public may be inured to news of opioid settlements.
“I know that we’ve talked about opioids a bunch, and there’s some risk that we become a little numb to it, and this starts to feel routine,” Tong said. “I can assure you that a $14 billion recovery is far from routine.”
States and the U.S. Department of Justice have pursued civil and criminal investigations of how addictive opioid painkillers, such as Perdue Pharma’s OxyContin, were aggressively marketed as safe and sold in quantities far beyond what could be reasonably prescribed.
Members of the Sackler family, whose fortunes derived from Perdue Pharma of Stamford, and the company agreed to civil and criminal penalties.
“But what’s different about this is that CVS, Walgreens, Walmart, these are pharmacies — retailers. And this is where the rubber literally met the road,” Tong said. “This is the last stop before somebody gets their hand on pills, in many cases pills they shouldn’t have, or too much pills that will lead to addiction.”
The agreements released Monday detail injunctive relief that will dictate how the giant drug retailers monitor their sales of addictive narcotics.
“The heart of this settlement is making them fundamentally overhaul the way they do this,” Tong said.
Walgreens and CVS issued statements last month saying the settlement was in the best interest of the companies and their stakeholders.
“As one of the largest pharmacy chains in the nation, we remain committed to being a part of the solution, and this settlement framework will allow us to keep our focus on the health and wellbeing of our customers and patients, while making positive contributions to address the opioid crisis,” Walgreens said.
“We are committed to working with states, municipalities and tribes, and will continue our own important initiatives to help reduce the illegitimate use of prescription opioids,” CVS said.
The various opioid settlements have come in the four years since Tong took office, but he credited his predecessor, George Jepsen, as one of the state attorneys general to first recognize the crisis and open investigations.
The inquiry into the role of pharmacy chains is more recent, Tong said.
Overall, all levels of the pharmaceutical supply chain have agreed to $50 billion in payments to resolve the various investigations, Tong said.
“I am sure that as long as I’m attorney general that I’ll be working on the opioid addiction crisis. That will be a big part of what we do. It is the worst public health crisis in America, COVID notwithstanding,” Tong said.
“It will be with us probably for our lifetimes, and $50 billion and counting will go a long way to stemming the tide,” Tong said “We’re not done. We’re not close to done.”