The opioid epidemic in the United States is a massive mess. Over 200,000 people have died from overdoses of prescription narcotics over the last 20 years, according to The Washington Post. Federal, state, and local governments have spent a lot of money dealing with opioid addiction. All these governments -- and private plaintiffs -- are now suing various pharmaceutical companies and drugstores for large sums of money.
But today, it was reported that drugstores including CVS Health (NYSE:CVS) Walgreens Boots Alliance (NASDAQ:WBA), Rite Aid (NYSE:RAD), and Walmart (NYSE:WMT) are attempting to shift the culpability to the doctors who prescribed the pain killers that the drug stores filled.
In October, several companies agreed to pay two counties in Ohio $260 million in federal court opioid litigation. The companies involved included opioid distributors McKesson (NYSE:MCK), AmerisourceBergen (NYSE:ABC) and Cardinal Health (NYSE:CAH), and opioid manufacturer Teva Pharmaceuticals (NYSE:TEVA). Johnson & Johnson refused to settle. Last August, Johnson & Johnson (NYSE:JNJ) was ordered to pay $572 million to the state of Oklahoma in an opioid lawsuit. The company is appealing the ruling.
By admitting liability to the two counties in Ohio, the four above companies are in a weak position to negotiate in the multitude of lawsuits against them in other cities, counties, and states across the land. Plaintiff's attorneys are claiming the companies have admitted culpability.
A bipartisan group of state attorney generals attempted to negotiate a nationwide settlement with the above five companies. The five companies all agreed to pay out $48 billion dollars over a period of 18 years. That settlement was instantly rejected by other litigants.
Drugstores are also being sued in a separate opioid litigation. This October, a federal lawsuit begins against CVS, Walgreens Boots Alliance, and Rite-Aid and other major pharmacy chains. This litigation is in the same two counties in Ohio, Summit and Cuyahoga.
On Monday, the drugstores turned around and filed suit against physicians across northeast Ohio. The claim is that the doctors who made the opioid prescriptions are just as much, perhaps more, to blame for the opioid crisis as the drugstores who fulfilled the prescriptions.
Of course, drugstores have much deeper pockets than individual doctors, many of whom would be bankrupted by a verdict against them in this litigation. The threat to put Ohio's doctors out of business shows just how high the stakes are. What is taking place in these two counties can and likely will be repeated in multiple lawsuits nationwide. The pressure is on for a nationwide settlement -- and $48 billion is probably just a drop in the bucket.