CVS Health and Walgreens announced agreements Wednesday to pay about $5 billion each to settle lawsuits over how its pharmacies handled prescriptions for addictive opioid painkillers.
Why it matters: CVS and Walgreens are the two largest drugstore chains in the U.S. The proposed framework would resolve a series of lawsuits brought by a group of states and Native American tribes.
- Walmart is also in discussions for a deal, AP reported.
Driving the news: CVS — the largest chain of pharmacies in the country — announced the $5.2 billion deal in its quarterly earnings report on Wednesday morning. It did not admit wrongdoing.
- The company would pay $4.9 billion to states and other municipalities and $130 million to tribes over 10 years beginning in 2023.
- Walgreens agreed to pay up to $4.95 billion over the next 15 years for its settlements. The deal also includes "no admission of wrongdoing or liability by the company."
What they're saying: "We are pleased to resolve these longstanding claims and putting them behind us is in the best interest of all parties, as well as our customers, colleagues and shareholders," Thomas Moriarty, CVS' chief policy officer and general counsel, said in a statement.
- "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."
Walgreens said in a statement that the "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."
- "We believe this is in the best interest of the company and our stakeholders at this time, and allows our pharmacists, dedicated healthcare professionals who live and work in the communities they serve, to continue playing a critical role in providing education and resources to help combat opioid misuse and abuse.”
The big picture: A federal court in August ordered CVS, Walgreens and Walmart to pay more than $650 million to two Ohio counties to cover costs of the opioid epidemic after a trial that targeted the nation's biggest pharmacy chains.
- CVS announced its part of the settlement as it released third-quarter earnings on Wednesday showing it took a $3.9 billion operating loss primarily driven by opioid litigation charges.
- The CVS settlement is manageable and "removes an overhang on the group," Evercore ISI analyst Elizabeth Anderson wrote in a note.
Editor's note: This story has been updated with additional details.
