Kroger Agrees to Settle Nationwide Opioid Claims, Commits Up to $1.2 Billion in Payments
Kroger announced on Friday that it has reached an agreement to pay $1.2 billion to U.S. states, local governments, and Native American tribes, effectively settling the majority of claims that alleged the company contributed to the opioid epidemic due to insufficient oversight of its prescription pill sales. This settlement is viewed as a comprehensive resolution encompassing all claims from these parties, as the company stated in a release ahead of its fiscal second-quarter earnings report.
However, Kroger emphasized that this settlement does not constitute an admission of wrongdoing or liability. The company intends to continue vigorously defending against any remaining claims and lawsuits related to opioids that are not covered by the final agreement. It's worth noting that several companies have announced nationwide opioid settlements over the past year.
In November, Walgreens agreed to pay $4.95 billion to U.S. states, local governments, and tribes to resolve all opioid claims. The company also settled with West Virginia, which had the highest number of opioid-related overdose deaths nationwide, for $83 million in January.
Similarly, in November, CVS agreed to pay $5 billion to states, local governments, and tribes to resolve all opioid-related lawsuits. The retail pharmacy chain also settled with West Virginia for $82.5 million the previous fall.
Walmart, in December, finalized a $3.1 billion nationwide settlement agreement with all U.S. states and local governments to resolve all opioid-related lawsuits. Walmart had settled with West Virginia for $65 million a few months earlier.
As for Rite Aid, it has not reached any nationwide opioid settlement, but the company agreed to pay $30 million to West Virginia in the fall. There are reports that Rite Aid is preparing to file for bankruptcy within the next few weeks to restructure its debt and potentially halt ongoing opioid lawsuits.
Kroger's shares saw a 4% increase in early trading on Friday.
Under the terms of its settlement, Kroger will pay $1.2 billion to U.S. states and local governments over 11 years, along with $36 million to Native American tribes. The company reported a net loss for the second quarter, attributed to a $1.4 billion charge related to the settlements and associated legal fees.
Governments at the state and local levels have filed numerous lawsuits against drug companies and wholesalers, alleging their role in the oversupply of prescription drugs that contributed to the opioid epidemic. These lawsuits have resulted in various settlement agreements.
According to the latest data from the Centers for Disease Control and Prevention, more than 564,000 people died from overdoses involving opioids, including prescription and illicit opioids, from 1999 to 2020. Initially, many of these deaths were linked to prescription drugs. Subsequently, efforts were made by governments, medical professionals, and companies to make these drugs harder to misuse and access. Nevertheless, individuals with opioid use disorder increasingly turned to heroin, which proved to be even more lethal.
