The News
Kroger, the leading grocery chain, announced on Friday that it has reached an agreement to pay approximately $1.2 billion to states, local governments, and Native American tribes. The settlement aims to resolve claims that Kroger’s retail pharmacies contributed to the opioid crisis.
Kroger was accused of inadequately monitoring prescriptions of highly addictive painkillers filled in its store pharmacies. The company has agreed to make payments over 11 years, starting in December, totaling $1.2 billion. Additionally, Kroger will allocate $177 million over six years to cover legal fees associated with the settlement.
It is important to note that Kroger has not admitted wrongdoing by reaching this settlement.
Background: Pharmacy chains have been settling opioid claims.
Kroger joins a growing list of pharmaceutical manufacturers, distributors, and pharmacy chains that have agreed to substantial settlements with state and local governments. These settlements are in response to allegations of contributing to a widespread public health crisis caused by opioids.
Last year, three major pharmacy chains—Walgreens, CVS Health, and Walmart—reached similar settlements totaling around $13 billion. Rite Aid, another pharmacy chain, has not yet announced a nationwide settlement.
The allegations against Kroger and its competitors revolve around the role their pharmacies played in flooding communities with legal painkillers. Lawsuits against Kroger filed by the attorneys general in Washington State and West Virginia allege that Kroger failed to investigate overprescribing practices and withheld crucial data from its pharmacists, hindering their ability to safely dispense medication.
Why It Matters: Opioid settlement money is funding recovery efforts.
With the disbursement of previous opioid settlement payments, states, municipal governments, and Native American tribes have dedicated the funds to support services for opioid abuse victims and acquire medication to reverse opioid overdoses.
North Carolina’s Attorney General, Josh Stein, a key figure in the negotiations with Kroger, stated that the settlement “will help save lives, and we will make sure these companies can’t repeat their mistakes.”
What’s Next: A grocery mega-merger.
Despite the opioid settlement agreement, Kroger is actively pursuing its merger with Albertsons, another major chain. Kroger has confirmed that the settlement will not hinder the progress of the merger.
To address antitrust concerns, Kroger plans to divest over 400 stores, primarily located in Western states. This divestment strategy aims to alleviate regulatory concerns associated with the merger.
Jan Hoffman contributed reporting.
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