10-25-2020, 11:36 PM
Walmart Files Pre-Emptive Lawsuit Against
Federal Government in Opioid Case
Retail giant, expecting to be sued by Justice Department,
argues federal agencies have no basis to seek civil damages for
pharmacy practices
![[Image: Ns3RcVL.jpg]](https://i.imgur.com/Ns3RcVL.jpg)
![[Image: BleCmfp.jpg]](https://i.imgur.com/BleCmfp.jpg)
Walmart says in a lawsuit the Justice Department
and Drug Enforcement Administration are seeking to make it
a scapegoat for the federal government’s own shortcomings in
fighting the opioid crisis.
PHOTO: BRENDAN MCDERMID/REUTERS
By Brent Kendall and Sara Randazzo
Updated Oct. 22, 2020 7:39 pm ET
Walmart Inc. WMT 0.21% sued the federal government in an
attempt to strike a pre-emptive blow against what it said is an
impending opioid-related civil lawsuit from the Justice Department.
The retail giant said in a lawsuit filed Thursday that the Justice
Department and Drug Enforcement Administration are seeking
to scapegoat the company for the federal government’s own
regulatory and enforcement shortcomings in combating the
opioid crisis. Walmart said the government is seeking steep
financial penalties against the retailer for allegedly contributing
to the opioid crisis by filling questionable prescriptions.
The suit names the department and Attorney General William Barr
as defendants, as well as the DEA and its acting administrator,
Timothy Shea. It is seeking a declaration from a federal judge
that the government has no lawful basis for seeking civil damages
from the company based on claims pharmacists filled valid
prescriptions that they should have known raised red flags.
Walmart, which operates more than 5,000 in-store pharmacies
in the U.S., said the government’s “threatened action would be
unprecedented.” It said the government hasn’t alleged that the
company was filling altered prescriptions, or that its pharmacists
had inappropriate relationships with patients or doctors.
“In the shadow of their own profound failures, DOJ and DEA now
seek to retroactively impose on pharmacists and pharmacies
unworkable requirements that are not found in any law and go
beyond what pharmacists are trained and licensed to perform,”
the company said in the lawsuit, filed in federal court in the
Eastern District of Texas.
The Justice Department and DEA declined to comment.
Walmart’s lawsuit is an unusual and aggressive tactic for a company
in high-stakes talks with the department. Its suit won’t necessarily
head off any Justice Department action, but a court ruling embracing
the company’s view of the law could give it a weapon against any
government case.
Quicken Loans Inc. tried a similar tactic against the federal government
in 2015 to avoid being pegged with mortgage fraud, but the Justice
Department sued weeks later in a case Quicken settled last year.
Walmart said the department has identified hundreds of specific doctors
as having written problematic prescriptions that company pharmacists
allegedly shouldn’t have filled, according to the government. But
nearly 70% of those doctors continue to have active DEA registrations,
the company said.
“In other words, defendants want to blame Walmart for continuing to
fill purportedly bad prescriptions written by doctors that DEA and state
regulators enabled to write those prescriptions in the first place and
continue to stand by today,” Walmart said in the suit.
Walmart is one of several large companies that have been targeted
in lawsuits by state and local governments for allegedly helping to fuel
the opioid crisis. About 3,000 of the cases have been consolidated in a
federal court in Ohio, where a judge has pressed both sides to settle
for nearly three years.
Plaintiffs focused less on Walmart in the early days of the opioid litigation,
though the company has since been sued by counties and a handful of
states across the country for its role as both a distributor of opioids to
its own stores and as a pharmacy.
Two Ohio counties slated to take Walmart to trial next year accuse the
retailer of failing to stop high-volume orders of controlled substances
that it should have known were being diverted for improper uses. In
an amended complaint filed in June, the plaintiffs allege Walmart had
no formal policy to catch suspicious orders until 2014, and that even
afterward, it never flagged any such orders to the DEA. The lawsuit
cites the Ohio city of Cortland, where it says one Walmart store bought
enough oxycodone and hydrocodone from 2006 to 2014 to supply
29 pills a year for each of the approximately 7,100 people who lived there.
Walmart pharmacists felt pressure to fill prescriptions quickly, the
plaintiffs alleged, and had incentive bonuses tied to volume. Walmart
stopped serving as its own distributor of controlled substances in 2018.
Walmart has denied the allegations and said that opioid dispensing is
a small part of its business.
The Justice Department previously launched a criminal investigation,
based out of the U.S. attorney’s office for the Eastern District of Texas,
related to Walmart’s dispensing of opioids. The department’s leadership
in Washington decided in 2018 against bringing charges, according to
the company’s lawsuit. The department’s decision not to prosecute
was reported previously by ProPublica.
Walmart in its complaint Thursday alleged federal prosecutors
“tried to use the threat of criminal indictment to pressure the company
into paying a massive civil penalty.” One U.S. attorney suggested the
company could afford to pay $1 billion, the lawsuit said.
The company argues in the lawsuit that the federal government was
placing it in an untenable position because pharmacists face professional
and legal risks—and potential harm to patients—if they reject prescriptions,
but face federal liability if they do fill them and the government
determines they shouldn’t have.
Initial civil settlement talks in the broader opioid litigation have focused
on the three biggest drug distributors in the country, Cardinal Health Inc.,
AmerisourceBergen PLC and McKesson Corp. , as well as major
drugmakers including Johnson & Johnson. States are nearing a $26.4 billion
settlement with those four companies and are in settlement discussions
with others up and down the pharmaceutical supply chain.
Some targets in the litigation, including OxyContin maker
Purdue Pharma LP, have filed for bankruptcy to try to resolve the cases.
Purdue agreed this week to plead guilty to three felonies related to its
marketing and distribution of OxyContin, as part of an $8.34 billion
settlement of civil and criminal investigations pursued by the
Justice Department.
Walmart was among six pharmacies slated to go to trial in federal court
in November in the cases of Ohio’s Cuyahoga and Summit counties.
The judge, however, recently delayed the trial indefinitely, citing the
coronavirus pandemic. That trial was set to focus on the pharmacies’
roles as distributors of opioids to their own stores but wouldn’t have
included allegations related to dispensing drugs to customers.
Write to Brent Kendall at brent.kendall@wsj.com and Sara Randazzo
at sara.randazzo@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved.
87990cbe856818d5eddac44c7b1cdeb8
Appeared in the October 23, 2020, print edition as
'Walmart Sues U.S., Aiming to Head Off Opioid Penalties.'
Federal Government in Opioid Case
Retail giant, expecting to be sued by Justice Department,
argues federal agencies have no basis to seek civil damages for
pharmacy practices
Walmart says in a lawsuit the Justice Department
and Drug Enforcement Administration are seeking to make it
a scapegoat for the federal government’s own shortcomings in
fighting the opioid crisis.
PHOTO: BRENDAN MCDERMID/REUTERS
By Brent Kendall and Sara Randazzo
Updated Oct. 22, 2020 7:39 pm ET
Walmart Inc. WMT 0.21% sued the federal government in an
attempt to strike a pre-emptive blow against what it said is an
impending opioid-related civil lawsuit from the Justice Department.
The retail giant said in a lawsuit filed Thursday that the Justice
Department and Drug Enforcement Administration are seeking
to scapegoat the company for the federal government’s own
regulatory and enforcement shortcomings in combating the
opioid crisis. Walmart said the government is seeking steep
financial penalties against the retailer for allegedly contributing
to the opioid crisis by filling questionable prescriptions.
The suit names the department and Attorney General William Barr
as defendants, as well as the DEA and its acting administrator,
Timothy Shea. It is seeking a declaration from a federal judge
that the government has no lawful basis for seeking civil damages
from the company based on claims pharmacists filled valid
prescriptions that they should have known raised red flags.
Walmart, which operates more than 5,000 in-store pharmacies
in the U.S., said the government’s “threatened action would be
unprecedented.” It said the government hasn’t alleged that the
company was filling altered prescriptions, or that its pharmacists
had inappropriate relationships with patients or doctors.
“In the shadow of their own profound failures, DOJ and DEA now
seek to retroactively impose on pharmacists and pharmacies
unworkable requirements that are not found in any law and go
beyond what pharmacists are trained and licensed to perform,”
the company said in the lawsuit, filed in federal court in the
Eastern District of Texas.
The Justice Department and DEA declined to comment.
Walmart’s lawsuit is an unusual and aggressive tactic for a company
in high-stakes talks with the department. Its suit won’t necessarily
head off any Justice Department action, but a court ruling embracing
the company’s view of the law could give it a weapon against any
government case.
Quicken Loans Inc. tried a similar tactic against the federal government
in 2015 to avoid being pegged with mortgage fraud, but the Justice
Department sued weeks later in a case Quicken settled last year.
Walmart said the department has identified hundreds of specific doctors
as having written problematic prescriptions that company pharmacists
allegedly shouldn’t have filled, according to the government. But
nearly 70% of those doctors continue to have active DEA registrations,
the company said.
“In other words, defendants want to blame Walmart for continuing to
fill purportedly bad prescriptions written by doctors that DEA and state
regulators enabled to write those prescriptions in the first place and
continue to stand by today,” Walmart said in the suit.
Walmart is one of several large companies that have been targeted
in lawsuits by state and local governments for allegedly helping to fuel
the opioid crisis. About 3,000 of the cases have been consolidated in a
federal court in Ohio, where a judge has pressed both sides to settle
for nearly three years.
Plaintiffs focused less on Walmart in the early days of the opioid litigation,
though the company has since been sued by counties and a handful of
states across the country for its role as both a distributor of opioids to
its own stores and as a pharmacy.
Two Ohio counties slated to take Walmart to trial next year accuse the
retailer of failing to stop high-volume orders of controlled substances
that it should have known were being diverted for improper uses. In
an amended complaint filed in June, the plaintiffs allege Walmart had
no formal policy to catch suspicious orders until 2014, and that even
afterward, it never flagged any such orders to the DEA. The lawsuit
cites the Ohio city of Cortland, where it says one Walmart store bought
enough oxycodone and hydrocodone from 2006 to 2014 to supply
29 pills a year for each of the approximately 7,100 people who lived there.
Walmart pharmacists felt pressure to fill prescriptions quickly, the
plaintiffs alleged, and had incentive bonuses tied to volume. Walmart
stopped serving as its own distributor of controlled substances in 2018.
Walmart has denied the allegations and said that opioid dispensing is
a small part of its business.
The Justice Department previously launched a criminal investigation,
based out of the U.S. attorney’s office for the Eastern District of Texas,
related to Walmart’s dispensing of opioids. The department’s leadership
in Washington decided in 2018 against bringing charges, according to
the company’s lawsuit. The department’s decision not to prosecute
was reported previously by ProPublica.
Walmart in its complaint Thursday alleged federal prosecutors
“tried to use the threat of criminal indictment to pressure the company
into paying a massive civil penalty.” One U.S. attorney suggested the
company could afford to pay $1 billion, the lawsuit said.
The company argues in the lawsuit that the federal government was
placing it in an untenable position because pharmacists face professional
and legal risks—and potential harm to patients—if they reject prescriptions,
but face federal liability if they do fill them and the government
determines they shouldn’t have.
Initial civil settlement talks in the broader opioid litigation have focused
on the three biggest drug distributors in the country, Cardinal Health Inc.,
AmerisourceBergen PLC and McKesson Corp. , as well as major
drugmakers including Johnson & Johnson. States are nearing a $26.4 billion
settlement with those four companies and are in settlement discussions
with others up and down the pharmaceutical supply chain.
Some targets in the litigation, including OxyContin maker
Purdue Pharma LP, have filed for bankruptcy to try to resolve the cases.
Purdue agreed this week to plead guilty to three felonies related to its
marketing and distribution of OxyContin, as part of an $8.34 billion
settlement of civil and criminal investigations pursued by the
Justice Department.
Walmart was among six pharmacies slated to go to trial in federal court
in November in the cases of Ohio’s Cuyahoga and Summit counties.
The judge, however, recently delayed the trial indefinitely, citing the
coronavirus pandemic. That trial was set to focus on the pharmacies’
roles as distributors of opioids to their own stores but wouldn’t have
included allegations related to dispensing drugs to customers.
Write to Brent Kendall at brent.kendall@wsj.com and Sara Randazzo
at sara.randazzo@wsj.com
Copyright ©2020 Dow Jones & Company, Inc. All Rights Reserved.
87990cbe856818d5eddac44c7b1cdeb8
Appeared in the October 23, 2020, print edition as
'Walmart Sues U.S., Aiming to Head Off Opioid Penalties.'