On December 22, 2020, the Department of Justice’s (“DOJ”) Civil Division, Consumer Protection Branch, and five U.S. Attorneys’ Offices announced a groundbreaking civil enforcement action against Walmart Inc. (“Walmart”). The 160-page complaint alleges that the world’s largest company (by revenue) and the operator of over 5,000 in-store pharmacies contributed to the national opioid crisis by violating the Controlled Substances Act (“CSA”) in a myriad of ways.
A Closer Look at the Allegations Against Walmart
In U.S. v. Walmart, et al., filed in the U.S. District Court for Delaware, where Walmart is incorporated, DOJ alleges that Walmart regularly filled opioid prescriptions from known “pill mills”; failed to scrutinize controlled-substance prescriptions to ensure they were valid; had a compliance team that withheld information about “problem prescribers” from its own in-house pharmacists; and placed “enormous pressure” on its pharmacists to fill prescriptions as fast as possible without following proper protocols.
Of the several “red flags” ignored, DOJ alleges that Walmart pharmacists: filled prescriptions for “trinities” and other well-known and highly dangerous drug “cocktails” that Walmart pharmacists knew were predominately sought by individuals engaging in drug abuse; filled multiple prescriptions at the same time for immediate release opioids which, as opposed to extended-release opioids, release the drugs more quickly into the bloodstream; and filled prescriptions for very high dosages of opioids.
DOJ alleges that several of Walmart’s pharmacists filed “refuse-to-fill reports” after noticing these red flags, but Walmart ignored hundreds of the reports filed by its own pharmacists. Additionally, between 2013 and 2017, Walmart shipped approximately 37.5 million Schedule II, III, and V orders to its pharmacies while at the same time only reporting 204 suspicious orders to the Drug Enforcement Agency (“DEA”).
Prior Criminal Investigation and 2,000 Lawsuits
According to media reports, DOJ had initially opened the Walmart investigation as a criminal investigation in Texas, but this federal civil enforcement action was brought instead. The DOJ action also follows more than 2,000 suits filed by states, cities, and counties, which make similar allegations that Walmart ignored red flags in filling prescriptions for opioids.
Walmart’s Suit Against DOJ and the DEA
DOJ’s December 2020 enforcement action against Walmart follows on the heels of Walmart’s filing of a federal civil suit in October 2020 against DOJ and the DEA. In what Walmart acknowledged was a preemptive suit, it sought a declaratory judgment that its opioid prescription practices were compliant with the CSA. In Walmart’s lawsuit, it also accused DOJ and the DEA of scapegoating Walmart for the government’s own failures in dealing with the opioid crisis.
There are several important takeaways from the Walmart case:
- Look for DOJ to Pursue Pharmacies for Their Alleged Roles in the Opioid Crisis. The Walmart case is in line with DOJ’s current trend — and announced intention — of pursuing civil and criminal actions against pharmacies. This comes as DOJ widens its enforcement scope beyond opioid manufacturers and distributors to all actors in the prescription drug supply chain – including pharmacies. While perhaps previously back-burnered while DOJ focused on giant opioid manufacturers, DOJ is now viewing pharmacies as worthy targets and the last line of defense against opioid diversion. This shift “downstream” by DOJ mirrors the wave of local government suits against pharmacies.
On December 15, 2020, Deputy Assistant Attorney General Daniel Feith, who oversees DOJ’s Consumer Protection Branch, gave a keynote speech at the Food and Drug Law Institute’s annual enforcement conference signaling the coming trend in enforcement actions against pharmacies. DAAG Feith stated that “the Consumer Protection Branch [of DOJ] is also going after unlawful actions by others in the opioid supply chain, including pharmacies.” DAAG Feith highlighted that pharmacies for “too long [have] abdicated [their] responsibility” as “the last line of defense against prescription opioid diversion.” Among the many failings by pharmacies, DAAG Feith discussed the various “red flags” pharmacies have ignored, including filling opioid prescriptions written by doctors hundreds of miles away for dosages two to three times higher than CDC guidelines. As stated by DAAG Feith, individuals and pharmacies “can expect to see additional developments in the opioid arena in the coming year.”
- Pharmacies Large and Small Will Be on DOJ’s Radar. While DOJ’s case against Walmart will be one of the most significant opioid enforcement actions in U.S. history, DOJ will cover the waterfront and also look for smaller pharmacies with similar “red flag” practices. As with the Walmart case, look for DOJ civil enforcers to use the CSA as a statute of choice because it allows for injunctive relief (i.e., shutting down the pharmacy) as well as civil money penalties.
In 2019, DOJ’s Consumer Protection Branch and the U.S. Attorney’s Office in the Middle District of Tennessee brought an earlier version of the Walmart suit against two local Tennessee pharmacies. DOJ stated at the time that it was the Department’s first CSA action against a pharmacy. Under the leadership of Main Justice’s Prescription Interdiction and Litigation Task Force (PIL), this civil enforcement action (U.S. v. Oakley Pharmacy Inc. et al.,) alleged that two pharmacies, their owner, and three pharmacists assisted in filling several prescriptions outside the course of professional practice and in violation of the pharmacists’ responsibility to ensure that prescriptions were written for a legitimate medical purpose.
DOJ alleged that the pharmacists ignored numerous “red flags” such as: unusually high dosages of oxycodone and other opioids; patients paying high cash prices for prescriptions; patients traveling considerable distances to obtain or fill a prescription; and patients presenting prescriptions for combinations of drugs which are known to be used together by drug abusers as a “cocktail” for their synergistic effect. Shortly after the case was filed, in February of 2019, the U.S. District Court for the Middle District of Tennessee entered a temporary restraining order against all the defendants shutting down the pharmacies from operating.
- Do You Really Want to Sue DOJ? Unlike Walmart, not every company has the resources or frankly, the swagger, to take preemptive legal action against DOJ. It is considered risky, and in the case of Walmart’s preemptive suit, commentators have observed that it appears to be aimed more at creating a public narrative than anything else. When a private party sues DOJ, it is going up against the biggest law firm in the world — and one that actively partners with every law enforcement agency in the U.S. It is not for the faint of heart.
As we approach the handover to the new Administration, look for DOJ health care fraud enforcement to continue apace, and for DOJ’s Walmart civil enforcement action to signal an increased focus on pharmacies in the opioid space.
 A combination of opioid/non-opioid prescriptions that on their face present an obvious red flag as to the prescription’s validity.
 As of June 2019, DOJ and the defendants moved jointly to enter a preliminary injunction against the two pharmacies and their owner extending the terms of the TRO.