Walmart Preemptively Sues US Government To Avoid Penalties Related To Opioid Crisis: WSJ

Walmart Inc WMT has taken preemptive legal action against the federal government to avoid a civil lawsuit against the company related to the operation of its 5,000 in-store pharmacies, the Wall Street Journal reported Thursday.

What Happened: The Bentonville, Arkansas-headquartered retail giant alleges in its lawsuit — filed in a federal court in the Eastern District of Texas — that it is being targeted by the U.S. Department of  Justice and the Drug Enforcement Administration to cover up the shortcomings of the government in dealing with the opioid crisis, according to the Journal.

The retailer purportedly claims that the federal government is in pursuit of considerable financial penalties against it for allegedly filing dubious prescriptions, which in turn contributed to the opioid crisis.

“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,” Walmart said in the lawsuit, as per the Journal.

Walmart says that the Justice Department identified hundreds of doctors that wrote the questionable prescriptions, which its pharmacists should not have allegedly filled, but 70% of such doctors continue to have active DEA registrations.

Why It Matters: The lawsuit may not stave off legal action against the retailer but a court ruling in its favor could strengthen its defense in any lawsuit brought against it by the government, the Journal reported.

Walmart said in its complaint that prosecutors threatened it with a criminal indictment to extract huge penalties with one U.S. attorney suggesting the company could afford to pay $1 billion.

The retailer is among several large companies facing legal action initiated by state and local governments for allegedly contributing to the opioid crisis. Three-thousand such cases have been consolidated in a federal court in Ohio.

Settlement talks in the broader civil lawsuit are ongoing with drug distributors Cardinal Health Inc CAH, AmerisourceBergen Plc ABC, McKesson Corporation MCK, and Johnson & Johnson JNJ.

States are reportedly approaching a $26.4 billion settlement with the four firms and are still in discussions with others. 

Last month, New York Governor Andrew Cuomo alleged that Johnson & Johnson downplayed the side effects of opioid drugs as the state unveiled charges against the drug giant.

Price Action: Walmart shares closed nearly 0.6% lower at $143.55 on Thursday.
Photo by Mike Mozart on Flickr