Walgreens reaches $500M deal with New Mexico over opioid crisis; California finalizes $17B settlement

Attorneys representing New Mexico announced Friday that the state has reached a $500 million settlement with Walgreens for the pharmacy retail giant's alleged involvement in the opioid epidemic.

On the same day, the state of California also finalized a hefty settlement with the retailer along with CVS and two pharmaceutical companies in recognition of the corporations’ role in the Golden State’s epidemic.

In New Mexico, a confidentiality provision lifted Friday morning after an agreement was signed with the pharmacy giant in March. The final number was settled on after New Mexico asked District Judge Francis J. Mathew to order the pharmacy chain to fund a $24 billion abatement plan, arguing that Walgreens failed to recognize suspicious prescriptions. The half-a-billion dollar settlement comes on top of $274 million in settlements obtained by the state last fall from Albertsons, CVS, Kroger and Walmart. Attorneys representing the state have said that opioid litigation has brought in more than $1 billion.

“During the trial, witness after witness testified about the devastation wrought by the opioid crisis in New Mexico and the profound harm caused by opioids in communities across the state,” co-lead counsel for New Mexico Mark Pifk wrote in a press release. “Now, after more than five years of litigation we are confident that this record settlement positions New Mexico to turn the tide on this deadly epidemic.”

The Walgreens settlement in New Mexico is one of the largest separate settlements obtained from a single opioid defendant in the country and the largest settlement obtained from a single defendant by the attorney general in the state’s history, according to lawyers connected to the case.

Settlement funds from the 2017 lawsuit will be spread out over a 15-year period with 55% going to city and county governments and 45% going to the state. All governing bodies must use the settlement to fuel opioid remediation, according to Lauren Rodriguez, a spokeswoman for the New Mexico attorney general’s office.

During the trial last fall, former New Mexico Attorney General Hector Balderas said in his opening statement that it was the job of the pharmacies to stop drugs from flooding the markets but that the chains dispensed with safety protocols in the name of record profits.

A state expert testified during the trial that 80% of people who started using heroin in the past decade used prescription opioids first.

“Too many lives have been lost or ruined as a result of the opioid crisis,” co-lead counsel for New Mexico Dan Alberstone wrote in a press release. “The burden on families, both financially and emotionally is immeasurable. That said, this settlement is a major step in our effort to hold companies like Walgreens accountable for their egregious conduct, and we expect the outcome of this case will not only cause these corporate wrongdoers to change their behavior, but, most importantly, put New Mexico on a path to recovery.”

Also on Friday, California Attorney General Rob Bonta announced that Walgreens, CVS, Allergan and Teva will pay a combined total of $17.3 billion in a settlement with the state for their alleged role in the epidemic. Pharmacy chains CVS and Walgreens will pay $5 billion and $5.7 billion, respectively. Prescription opioid maker Allergan will pay $2.37 billion while Teva will pay $4.25 billion.

The agreement was announced in November 2022, finalizing claims dating back over a decade. Allegations stated that the pharmaceutical manufacturers Allergan and Teva downplayed the risks of addiction while overstating the benefits of opioids, according to the attorney general’s office.

Walmart is also expected to settle soon with the state in an anticipated settlement of $3.1 billion, according to the Department of Justice.

“Nothing can bring back the lives lost or erase the suffering caused by this crisis, but we are making sure those who caused it and profited from it are held to account for their greed and willful misconduct,” Bonta said in a statement. “These hard-fought and hard-won settlement funds will be critical in supporting victims and getting them the help they need to recover.”

According to the DOJ, California will use the settlement to improve substance abuse treatment facilities, increase the availability of anti-overdose nasal spray Narcan and increase training for law enforcement and first responders. Funds will also be used to “address the needs of communities of color and vulnerable populations, including those who are unhoused.”

In 2019, the overall drug overdose death rate among Black Americans exceeded that of white Americans for the first time. Black men over 55 years old are currently dying from opioids at four times the rate of individuals of other races within the same age group, according to Scientific American.

States and cities throughout the country, including Ohio and San Francisco, have sued those who benefited financially from opioid sales in order to cover ongoing damages for the epidemic and ensure new standards of security for pharmacies charged with lax practices leading to overprescription and addiction.