Walgreens Boots Alliance (NASDAQ:WBA) has agreed to pay about $230 million to San Francisco to resolve claims that the retail pharmacy chain dispensed opioids without due diligence and failed to report suspicious orders, as required by law.
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“The Court found Walgreens substantially contributed to the opioid epidemic & created a public nuisance in San Francisco,” tweeted San Francisco City Attorney David Chiu. He also highlighted that Walgreens’ settlement was the largest awarded to a local government in years of opioid litigation in the country.
The settlement came nine months after U.S. District Judge Charles Breyer in San Francisco slammed Walgreens for its “15-year failure” to properly check opioid prescriptions and report possible misuse of opioids, which could be highly addictive. Breyer noted that Walgreens’ San Francisco pharmacies received millions of opioid prescriptions from 2006 to 2020, many of which had “red flags.” However, the company performed due diligence on less than 5% of such prescriptions before dispensing them.
In a statement, Walgreens said that it did not admit any fault and disputes the liability, but was in favor of the settlement as it allows the company to focus on its patients, customers, and communities.
With this settlement, Walgreens avoided a trial to determine damages. In fact, the settlement amount is quite small, given that the city’s attorneys had said in October 2022 that the company owes $8.1 billion over 15 years for costs to mend the opioid crisis. Last May, Walgreens reached a $683 million opioid settlement with Florida. Earlier this year, it agreed to an $83 million settlement with West Virginia.
Walgreens, CVS (CVS), and Walmart (WMT) have previously agreed to pay billions of dollars to settle opioid litigations.
Is Walgreens a Good Stock to Buy?
Wall Street is sidelined on Walgreens stock, with a Hold consensus rating based on two Buys, eight Holds, and two Sells. The average price target of $39.91 implies 24.6% upside. Shares have declined over 14% year-to-date.
