The Trump administration sued Walmart (NYSE: WMT), faulting the company for filling prescriptions from “pill-mill” physicians.
The Justice Department lawsuit also alleges that Walmart attempted to maximize profits by understaffing pharmacies and emphasizing the quantity of prescriptions over quality control in its 5,000-plus retail locations across the U.S. The U.S. lawsuit also argues that Walmart lacks an effective centralized strategy to identify questionable prescription practices across its operations. For that reason, customers who encountered a Walmart pharmacist who rejected an opioid prescription could potentially find another pharmacist to fill the same drug at an alternate location.
The lawsuit accuses Walmart of ignoring its pharmacists’ warnings about the prescriptions from an East Texas physician under federal investigation. Walmart stores filled some 14,700 prescriptions from 2014 to 2017 from the doctor, according to federal prosecutors. The suit alleges that the doctor was later sentenced to 20 years in federal prison.
Walmart denied that various accusations date back to June 2013, issuing a statement questioning the lawsuit’s factual basis and faulting the U.S. government’s response in containing the opioid epidemic. The Drug Enforcement Administration (DEA) has active registrations for many physicians the federal lawsuit accused of overprescribing opioids, Walmart alleged. The Department of Justice intends 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,” reads Walmart’s response in the lawsuit.
The retail giant had anticipated the suit, suing in October to dismiss the charges preemptively. The Department of Justice described that move as a “public-relations stunt under the guise of preemptive litigation.”
The company’s stock had tumbled more than 1% in late-day trading.
The Justice Department has ramped up litigation related to the opioid epidemic under President Trump. Last month, privately held Purdue Pharma pleaded guilty to three felonies related to fraud and kickback conspiracies. The company reached an $8.34 billion settlement with the Justice Department related to the drug oxycodone (OxyContin). Purdue Pharma filed for bankruptcy in 2019.
In recent years, there has been an increase in litigation from county, state and federal authorities related to the opioid epidemic. The lawsuits have targeted companies ranging from McKesson (NYSE:MCK) to Johnson & Johnson (NYSE:JNJ) and retail pharmacies such as Walgreens (NASDAQ: WBA), CVS (NYSE: CVS) and Rite Aid (NYSE: RAD) for their alleged roles in fueling the opioid crisis. Some 3,000 opioid cases have been consolidated in a federal court in Ohio.