Department of Justice Files Nationwide Lawsuit Against Walmart Inc. for Controlled Substances Act Violation

The Department of Justice filed a civil complaint against Walmart Inc. on Tuesday, December 22, stating the company “unlawfully dispensed controlled substances from pharmacies it operated across the country,” resulting in “hundreds of thousands of violations of the Controlled Substances Act (CSA)” during the peak of the opioid crisis in America. The civil complaint follows a multi-year investigation by the DOJ’s Prescription Interdiction & Litigation Task Force and could make Walmart liable for up to $67,627 for each unlawful prescription filled and $15,691 for each suspicious order not reported.

The civil complaint filed states that “as a pharmacy, Walmart violated the rules for dispensing controlled substances” while at the same time, “as a distributor, Walmart violated its duty to detect and report suspicious orders of controlled substances.” The Department of Justice accuses Walmart of neglecting their obligations under the CSA when distributing and filling prescriptions containing the controlled substances included in Schedules Two through Five.

In the 1970s, President Richard Nixon signed the Controlled Substance Act (CSA) to combine more than 200 separate laws regulating certain drugs into one statute. The CSA categorizes all drugs into five schedules based on their potential for being abused, current international treaties, and whether the drugs provide any medical benefit.

Schedule 1 drugs are the most regulated and have the highest penalty if an individual or company is found in violation. This classification includes Ecstasy and heroin, for example. Those in Schedule 5 are the least regulated and include substances such as cough suppressants. Under the CSA, any company that manufactures or distributes a controlled substance must register with the federal government and is subject to investigation by the Drug Enforcement Administration (DEA), the federal agency responsible for regulating the CSA.

The CSA “designates pharmacies as ‘practitioners’ that are permitted to handle controlled substances” and prohibits the dispensing of these substances without a prescription from a practitioner. Pharmacies have the responsibility of determining whether the prescription was issued by a professional practice and was issued for a “legitimate medical purpose.”

In addition, under this Act, the pharmacy has the responsibility to identify and resolve any “red flags” detected by the pharmacist when filling prescriptions. The red flags may be based on the validity of the prescription or the behaviors of the individual wishing to fill the prescription. If the red flag is resolved (i.e. the prescription is filled), the pharmacists must document the transaction.

The Department of Justice claims that from June 26, 2013, to the present, “Walmart violated the CSA’s dispensing rules on a sweeping national scale, filling enormous numbers of invalid controlled-substance prescriptions.” The complaint documented many examples where Walmart had filed official concerns about individual physicians and red flags yet filled the prescriptions anyway.

In addition to filling the prescriptions of physicians and patients who exhibited red flags, Walmart is charged with violating the CSA as a distributor for “failing to design and operate a system and report suspicious orders to DEA” as required by the Attorney General. The complaint claims that Walmart had access to enough information and data that it could have designed a system to better track and detect suspicious orders and then file those suspicions with the DEA.

In 1978, Walmart opened its first pharmacy division as a part of Walton’s vision of “selling low” in every department. By the late 1990s, Walmart had expanded internationally to include Canada, China, Mexico, and the U.K. and introduced Sam’s Club, the Walmart Supercenter, and the Neighborhood Market format of its stores. In 2006 Walmart debuted a discount generic-drug prescription program in its stores, guaranteeing just $4 for generic prescription medications. Generic versions of opioids, such as Vicodin, are covered under the plan. Pharmacies are available in both Walmart stores and Sam’s Clubs across the nation.

Opioids are divided into two classes: ones that include illegal substances such as heroin and fentanyl, and ones that are legally prescribed by doctors to relieve pain that include substances such as oxycodone, hydrocodone, codeine, and morphine.

According to the U.S. Centers for Disease Control and Prevention (CDC), the opioid crisis in America has had three distinct waves. The first wave began in the 1990s with a rise in increased prescriptions of opioids. The U.S. Department of Health and Human Services states the cause of this increase was due to pharmaceutical companies reassuring the medical community that patients could not become addicted to opioid pain relievers.

Then, in 2010 the second wave began as the United States saw a sharp increase in overdose deaths due to heroin, a Schedule One illegal controlled substance. In 2013, the third wave began as synthetic opioids such as fentanyl increased in circulation within the U.S. The CDC estimates that nearly 70% of deaths related to drug overdoses involved an opioid in 2018, and over 450,000 people have died from an opioid overdose since 1999.

Walmart has responded publicly to the lawsuit stating that in reality “Walmart is helping fight the opioid crisis” rather than helping facilitate it. In the public announcement, Walmart indicates they are ready and willing to fight this lawsuit in court by showing that “the Department is trying to shift blame for DEA’s own well-documented failures in policing the very doctors it gave permission to prescribe opioids.” The corporation further criticized the lawsuit stating it was “putting pharmacists between a rock and a hard place” and cites a recent class-action lawsuit filed against CVS, Walgreens, and Costco pharmacies for not filling needed opioid prescriptions.