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Walgreens Liable for Opioid-Fueled Nuisance in San Francisco (2)

Aug. 10, 2022, 5:15 PMUpdated: Aug. 10, 2022, 8:31 PM

Walgreen Co. pharmacies in San Francisco dispensed “hundreds of thousands of red flag opioid prescriptions,” many of which were diverted for illicit use and contributed to the opioid epidemic in the city, a federal judge ruled Wednesday.

The company’s practices from 2006 to 2020 failed to give pharmacists sufficient time, staffing, or resources to perform due diligence on prescriptions, Judge Charles R. Breyer said in a 112-page ruling siding with the city. Pharmacists experienced constant pressure to fill prescriptions as quickly as possible, and a shortage of resources to review them before dispensing, he said.

The ruling holds only that Walgreens is liable for substantially contributing to public nuisance in San Francisco. A subsequent trial will determine the extent to which Walgreens must abate the public nuisance that it helped to create, the court said.

The pharmacy company, in a statement, said the “facts and the law do not support the court’s decision. As we have said throughout this process, we never manufactured or marketed opioids, nor did we distribute them to the `pill mills’ and internet pharmacies that fueled this crisis.”

“The plaintiff’s attempt to resolve the opioid crisis with an unprecedented expansion of public nuisance law is misguided and unsustainable. We look forward to the opportunity to address these issues on appeal,” spokesperson Fraser Engerman said in an emailed statement.

The case is the first bench trial that has ruled against the opioid industry, City Attorney David Chiu told reporters. The lawsuit is part of a nationwide multidistrict litigation stemming from the ongoing opioid epidemic. Walgreens is the only remaining defendant.

Walgreens, San Francisco’s largest prescriber of opioids, failed to give pharmacists time to do due diligence to flag suspicious orders, Chiu said. “Pharmacists were pressured to fill, fill, fill. And as a result, Walgreens flooded our city with opioids.”

The case isn’t the first to find against Walgreens on nuisance grounds. A Cleveland jury in November concluded Walmart Inc., CVS Health Corp. and Walgreens Boots Alliance Inc. helped create a public-health crisis by failing to properly monitor opioid prescriptions, the drug industry’s latest loss in the expanding litigation over the painkillers. It may be the first such judgment to be rendered after a bench trial though.

Syringe-Clogged Toilets

After a two-month bench trial, the city “proved that Walgreens substantially contributed to an opioid epidemic with far-reaching and devestating effects across San Francisco,” Breyer said.

The social and economic costs have been steep. San Francisco created special paramedic teams to respond to opioid abuse across neighborhoods. Library staff received special training on how to administer naloxone. Libraries were forced to close after syringe-clogged toilets overflowed, according to the court.

Excrement and refuse attributable to opioid use can be found on streets across the city. The city has had to open new restrooms and syringe disposal sites in an effort to reduce the amount of waste on the streets, Breyer said.

“The effects of the opioid epidemic on San Francisco have been catastrophic. The city has fought hard and continues to do so, but the opioid epidemic, which Walgreens helped fuel, continues to substantially interfere with public rights in San Francisco,” the court said.

Damage Assessments

“Strictly speaking, we’re not seeking damages,” said Richard Heimann of Lieff, Cabraser, Heimann and Bernstein representing the city.

“Basically, what we will be asked to assess the likely cost to the city of implementing programs that effectively deal with issues. The city has been attempting for many years to address that issue but resources are needed to address that and that’s what we will ask the court address in the subsequent phase of the case,” Heimann told reporters.

“We do not have a firm estimate” of amount San Francisco will seek, Heimann said.

From 2006 to 2014, San Francisco County saw 163,645,704 opioids distributed, enough for 22 pills per person per year, the city attorney’s office said. Between 2015 and 2020, the city saw a 478% increase in opioid-related overdose deaths, and in a typical day at the Zuckerberg San Francisco General Hospital Emergency Department, one quarter of visits are opioid-related.

Nationwide, the Pew Charitable Trusts said, opioid overdose, misuse, and dependence account for $35 billion in health care costs, $14.8 billion in criminal justice costs, and $92 billion in lost productivity.

‘Overheated’

San Francisco has secured more than $120 million in cash payments and other benefits from the opioid industry to go toward opioid abatement and overdose prevention, according to the city attorney’s office. Manufacturers Allergan USA Inc. and Teva Pharmaceutical Industries Ltd. last month agreed to pay San Francisco $34 million in cash payments and provide the city $20 million worth of the overdose reversal drug, Narcan.

“I suspect this decision will be overturned or pared down dramatically on appeal; public nuisance theories in a problem as complex as opioids have not fared well,” said attorney Harry Nelson, a founding partner in the Los Angeles-based firm Nelson Hardiman.

“The decision seems somewhat “overheated” to me in the extent of its attribution of responsibility to Walgreens for failure to police suspicious orders, without any evidence that the “suspicious “ orders were not in fact based on legitimate physician prescribing, he said. “Still, this is not a good day for Walgreens, to say the least.”

Gibson, Dunn Crutcher LLP, San Francisco, represented Walgreens.

Casey Gerry Schenk Francavilla Blatt and Penfield LLP; Robbins Geller Rudman Dowd LLP; Sanford Heisler Sharp LLP; Lieff Cabraser Heimann & Bernstein LLP; Andrus Anderson LLP; Renne Public Law Group; Bleichmar Fonti & Auld LLP; Weitz & Luxenberg PC; the California Attorney General’s office; and San Francisco City Attorney’s office represented the government.

The case is City & Cnty. of San Francisco v. Purdue Pharma LP, N.D. Cal., No. 3:18-cv-07591, 8/10/22.

(Updated throughout)

With assistance from Ian Lopez

To contact the reporter on this story: Joyce E. Cutler in San Francisco at jcutler@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Nicholas Datlowe at ndatlowe@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com