Is Walmart a villain or victim of America’s deadly opioid crisis?

As the opioid crisis ravaged communities across the United States two years ago, the U.S. Attorney for the Eastern District of Texas at the time, Joe Brown, set about fixing blame on Walmart, alleging its pharmacies were filling prescriptions from “pill mill” doctors facilitating drug misuse and abuse by overprescribing narcotics.

The Department of Justice has also had a long-running civil investigation into Walmart’s pharmacies. The Bentonville, Arkansas, retail behemoth is now preemptively suing the Department of Justice, asking a federal district court to untangle the contradictory laws that have left Walmart open to investigation. The “DOJ is threatening to sue Walmart for not going even further in second-guessing doctors,” Walmart said in a press release, while “state health regulators are threatening Walmart and our pharmacists for going too far and interfering in the doctor-patient relationship.”

Walmart has been tightening its policies on filling opioid prescriptions, according to its “opioid stewardship initiative” – not just questioning particular scripts, but refusing to fill any prescription for controlled substances from doctors about whom the company had doubts. In part to appease federal regulators, Walmart applied various restrictions on controlled substances. But soon state authorities accused the company of violating state regulations – even of committing crimes – by blocking prescriptions or even just filling smaller quantities of drugs than doctors had specified. The company also received pushback from medical groups that accused Walmart of trampling on doctors’ prescribing prerogatives.

Walmart’s damned-if-you-fill-the-script, damned-if-you-don’t bind reflects the problems faced by large chain pharmacies, which also include CVS and Walgreens. They are among the chief targets in opioid-related lawsuits that may be some of the most complicated and expensive litigation in American history – the so-called National Prescription Opiate Litigation. The companies didn’t get there on their own: Contradictory regulations, demands, and threats from Washington and the states have combined to create a tangle trapping the pharmacies, leaving them exposed to plaintiffs’ lawyers in a massive “multi-district litigation” playing out in an Ohio court.

The nationwide tobacco litigation of the 1990s was complex enough, involving the states and a handful of cigarette manufacturers. By contrast, plaintiffs in the National Prescription Opiate Litigation – counties, boroughs, parishes, cities, townships, municipalities, and villages – number in the thousands. They are looking for just about everyone in the opioid business – manufacturers, distributors, and retailers – to pay for the opioid misuse that has been so costly to society. Plaintiffs’ lawyers are seeking damages well into the billions.

The court case consolidated in 2017 was supposed to get rolling in November, but has recently been postponed to the spring out of concerns COVID-19 would spread through a crowded courthouse.

The “multi-district litigation” follows efforts by federal prosecutors who have tried to build both criminal and civil cases against pharmacies, including Walmart, for not acting soon enough in blocking all prescriptions written by doctors pharmacists had questions about.

Pharmacies, though, are a curious place to assign blame for the opioid epidemic. They don’t make the drugs: Controlled substances are manufactured by heavily regulated producers. Nor do pharmacies sell opioids on their own authority: They dispense meds prescribed by licensed medical practices. Nonetheless, Walmart and the other chains are attractive targets. Between its stores and its Sam’s Clubs, Walmart has some 5,000 pharmacies operated by over 14,000 pharmacists. The company not only has a large footprint in the business of selling prescription drugs, it has some of the deepest pockets in all of retail.

Walmart has been trying for several years to limit the amount of opioid prescriptions its pharmacists fill. It launched an “opioid stewardship initiative” in 2017. Part of the effort has been to limit customers to a week’s supply of the powerful and dangerous drugs, even if they have been prescribed more. The idea is to reduce the chance of addiction by reducing how long the patient is on the narcotic. The company – clearly responding to the allegations of federal prosecutors – began putting nationwide holds on scripts from any doctor whose pattern of prescribing raised red flags. Walmart developed a computer algorithm to spot dubious doctors.

Walmart has emphasized that the one-week limit does not apply to patients with chronic pain, such as cancer or hospice patients. The company has also pointed out, in tussles with state regulators, that the limits on controlled substances follow recommendations established by the Centers for Disease Control.

In the summer of 2018, the Justice Department declined to bring the criminal charges against Walmart sought by the Texas U.S. Attorney. But a DOJ civil investigation continued. An attorney for Walmart, Karen Hewitt, wrote last year to the Justice Department’s Consumer Protection Branch that the civil investigation ignored the reality of state regulations. Walmart had not acted sooner to aggressively reject scripts because such a company-wide policy comes with risk of being sued or prosecuted, Hewitt wrote. In many states, pharmacy boards maintain that corporate owners of drug stores cannot institute rules against filling certain types of prescriptions, because that usurps the professional judgment of its pharmacists.

“As it turns out,” Hewitt wrote, “since Walmart implemented the policy, many state boards of pharmacy have taken the position that the policy is illegal under state law – a development predicted by many on Walmart’s compliance team when the Company declined to implement the policy sooner.”

Texas is one of the states that has taken a tough stand against pharmacies that put restrictions on filling controlled substance prescriptions. The Texas Medical Board threatened pharmacists working for Walmart that if they followed the company’s rules they could be committing crimes: “No Guideline should override a physician’s ability to prescribe meds,” Dr. Sherif Zaafran wrote in a September 2018 tweet. “That would be the unlicensed practice of medicine.” Zaafran, the head of the Texas Medical Board warned. “We will not hesitate to send out cease and desist orders if we verity reports of anyone practicing medicine without a license.” It is no mean threat: Texas law allows the unlicensed practice of medicine to be prosecuted as a third-degree felony.

Asked by RealClearInvestigations how pharmacies are supposed to fulfill their obligations to limit opioid abuse without intruding illegally into doctors’ prerogatives, Dr. Zaafran said, “There’s a lot more nuances than that.” If a pharmacist is concerned a prescription may be fraudulent or inappropriate, she can choose not to fill it at all and then raise a red flag with the medical board. But, says Zaafran, pharmacists cannot stop a doctor from writing a legal prescription. “Texas law says doctors can prescribe post-operative patients 10 days of opioids,” Zaafran says. A corporate policy limiting opioid prescriptions to seven days’ supply runs afoul of state law.

What is required by state medical boards can be at odds with state pharmacy boards. In Texas the pharmacy board requires that those filling prescriptions “make every reasonable effort to prevent inappropriate dispensing due to fraudulent, forged, invalid, or medically inappropriate prescriptions.” Which is what the company says it is doing: “Walmart is dedicated to helping fight the opioid crisis, and we are proud of the difficult work our pharmacists do every day to take care of patients,” the company said in a statement to RealClearInvestigations.

But that’s not how state regulators have viewed Walmart’s efforts. When the company rolled out its new opioid policy in Tennessee last year, the state medical association denounced it as “arbitrary.” The Tennessee Board of Pharmacy went further: After a doctor complained that his controlled-substance scripts weren’t being honored, the board launched an “emergency inspection” of the Manchester, Tennessee, Walmart pharmacy. In a meeting weeks after the raid, the board’s executive director, Reginald Dilliard, told Walmart the retailer was creating animosity between doctors and pharmacists, that its “corporate block” put patients at risk, and that if Walmart didn’t change the policy, the company would be breaking Tennessee law.

In 2017, a Walmart in Saukville, Wisconsin, gave notice to a local clinic that its pharmacists would not honor the clinic’s prescriptions for controlled substances. The pharmacists worried the clinic was overprescribing opioids. The store’s action earned it a rebuke from the State of Wisconsin Pharmacy Examining Board, which accused Walmart of “professional misconduct.”

The problem, according to the Wisconsin pharmacy board, was Walmart’s corporate policy blacklisting suspect prescribers. A pharmacist could individually decide not to fill a given prescription, but it couldn’t be a company rule that certain doctors be blocked: “The broad prohibition,” the board ruled, “deterred pharmacists at the Pharmacy from exercising their independent clinical judgment regarding dispensing controlled substances.”

The board put Walmart on notice that “any subsequent similar violation may result in disciplinary action.”

When Walmart instituted new limits on opioids in Idaho last year, the state’s pharmacy board objected that a corporate block was overkill because even a doctor who overprescribed opioids would write some number of proper prescriptions that should be filled. On an open call with representatives of the company, board member Richard de Blaquiere complained about the “blanket nature” of the block on prescribers with questionable script patterns. “I have seen cases of what I would call bad actor prescribers who also write legitimate, you know, controlled substance prescriptions.” He suggested there should be “wiggle room.”

Companies are finding themselves either being sued for filling opioid prescriptions or being threatened with prosecution if they don’t fill the prescriptions.

The chain pharmacies haven’t made any friends among doctors with their new restrictions on filling suspect scripts either. Last year, American Medical Association Executive Vice President James Madara wrote to Walmart Chief Medical and Analytics Officer Thomas Van Gilder to complain that the company’s “policy has disrupted legitimate medical practices.” He accused the company of trying to supersede the rights doctors have to prescribe under state and federal laws. And worse, that Walmart was doing so using an opaque “algorithm that deems a physician unfit to prescribe.” Madara called on Walmart to reveal “the detailed data sources and analytical tools that are being used to create the algorithms and decision points behind your ‘refusal to fill’ policy.”

It wasn’t the first time the AMA had denounced corporate pharmacies for putting limits on opioid prescriptions, or even just questioning doctors about their pain-killer prescribing habits. In 2013, Walgreens tightened its policy on filling opioid prescriptions. The AMA took up the issue in a committee chaired by Marta van Beek, a dermatologist who teaches at the University of Iowa. The committee resolved the “AMA deem inappropriate inquiries from pharmacies to verify the medical rationale behind prescriptions, diagnoses and treatment plans to be an interference with the practice of medicine and unwarranted.”

The committee called on the AMA to advocate “legislative and regulatory solutions to prohibit pharmacies and pharmacists from denying medically necessary and legitimate therapeutic treatments to patients.” Dr. Van Beek did not respond to questions from RealClearInvestigations

Doctors have organized against the pharmacies not only at a national level, but at the state level as well. If the Walmart policy isn’t already against the law in Georgia, the Medical Association of Georgia hopes to make it illegal. The group backed a bill last session that would have stopped chain pharmacies from limiting the quantities of opioids they would fill for a given patient. It would also have made it illegal for chain pharmacies to block their pharmacists from filling scripts by doctors whose practices raise red flags.

The bill was sponsored by State Rep. Sharon Cooper, a Republican from Marietta and chair of the Health and Human Services Committee. Herself a medical administrator, she has argued that refusing to fill controlled-substance prescriptions from doctors who have not been officially found guilty of anything injures their reputations without due process. “It sends the message that doctors are doing something wrong,” Cooper chided representatives of Walmart. “’Oh, he’s a bad doctor because you won’t fill his prescription. In a rural area that creates a big problem. It plants a seed of doubt.” RealClearInvestigations reached out to Cooper but she did not respond.

As for Walmart’s policy of checking with prescribers before filling opioid scripts, Cooper has little patience. In a meeting with Walmart executives and lawyers, she said that the real doctors are too busy: “They don’t have time for your little calls. They are working their frickin’ asses off.”

Walmart doesn’t entirely disagree: “Pharmacists have a complicated task when deciding whether to fill an opioid prescription from a validly licensed doctor,” the company told RCI, “because pharmacists are not these patients’ doctors, do not examine these patients, and do not have access to their medical records and tests.” Walmart says its pharmacists’ “difficult task is made even more challenging because of the inconsistent and often irreconcilable guidance and rules from federal and state regulators.”

Walmart recognizes it is in a heads I win, tails you lose bind. It faces pressure from the federal government and pursuit by trial lawyers representing thousands of cities and counties in the multi-district litigation, all of whom say chain pharmacies have not been tough enough to stop sketchy sales of opioids. And if they do make it harder for customers to get their pain-killer prescriptions filled, pharmacies face punishment under state laws and regulations – even criminal prosecution.

“We are committed to empowering and defending our pharmacists,” Walmart told RCI, “who unfortunately can face liability no matter whether they fill a prescription or refuse to fill it.” It is a conundrum that the retailer hopes a federal court in Texas will be willing and able to resolve.

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