Kroger to pay up to $1.4 billion to resolve US opioid lawsuits

[September 09, 2023]  By Nate Raymond

(Reuters) -Kroger on Friday said it would pay as much as $1.4 billion to resolve thousands of lawsuits by U.S. states, local governments and Native American tribes claiming the supermarket chain's pharmacies helped fuel the nation's opioid epidemic.

Kroger agreed to pay up to $1.2 billion to U.S. states, counties and municipalities and $36 million to Native American tribes to resolve the majority of opioid cases it faced. It will also pay $177 million to cover attorneys' fees and expenses.

Kroger took a $1.4 billion charge related to the tentative settlement, which is dependent on participation by 33 eligible states and the District of Columbia. The $1.2 billion would be paid out over 11 years.

The Cincinnati-based supermarket chain, which is seeking to merge with smaller rival Albertsons, will not admit wrongdoing as part of the deal, and said it will defend against any other claims the tentative settlement does not resolve.

The negotiations that produced the deal were led by attorneys general from California, Colorado, Illinois, North Carolina, Oregon, Tennessee and Virginia.
 

Thousands of lawsuits have been filed by states, local governments and Native American tribes accusing drug companies of downplaying the risks of opioid painkillers, and distributors and pharmacies of ignoring red flags that they were being trafficked illegally.

The litigation has resulted in more than $51 billion in settlements, according to lawyers for the plaintiffs, with deals already struck with major drugmakers and the nation's largest distributors.

Kroger itself faced more than 2,000 such lawsuits. In recent months, it had agreed to settle opioid claims by New Mexico for $58.5 million and West Virginia for $62 million.

Traders work as screens display the trading information for Kroger Co and Albertsons Cos Inc. on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 14, 2022. REUTERS/Brendan McDermid/File Photo

"These dollars will help save lives, and we will make sure these companies can't repeat their mistakes," North Carolina Attorney General Josh Stein, who helped lead negotiations with Kroger, said in a statement.

Friday's settlement by Kroger followed a collective $13.8 billion in settlements reached last year with three larger pharmacy chain operators, CVS Health Corp, Walgreens Boots Alliance and Walmart.

In a statement on Friday, the lead lawyers representing cities and counties in the litigation - Jayne Conroy, Paul Farrell and Joe Rice - called Kroger's deal the first by one of the smaller, regional supermarket pharmacies that had played a role in the drug crisis.

"This $1.2 billion agreement-in-principle is another step forward in holding each company that played a role in the opioid epidemic accountable and ensuring hard-hit communities are provided with much-needed resources," the lawyers said.

Nearly 645,000 people died in the United States from overdoses involving opioids, both prescription and illicit, from 1999 to 2021, according to the U.S. Centers for Disease Control and Prevention.

(Reporting by Nate Raymond and Juveria Tabassum; Editing by Pooja Desai, Daniel Wallis and Will Dunham)

[© 2023 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.