Recent $230 Million Walgreens Settlement Highlights the Need for Companies’ Robust Compliance Programs
In May, Walgreens agreed to pay San Francisco $230 million to settle claims the company created a public nuisance by contributing to the city’s opioid epidemic. In August 2022, after a two-month trial where first responders, pharmacy experts, and former and current Walgreens’ employees testified, a federal judge ruled that Walgreens, “substantially contributed to the public nuisance” i.e., the opioid epidemic, experienced by the city. The settlement avoided a further trial to determine damages that Walgreens must pay, “to abate the public nuisance that it helped to create.”
Although the major headlines were that a) Walgreens was found to have contributed to San Francisco’s opioid crisis and b) that Walgreens agreed to pay the city $230 million as a result, there are several other salient findings from the case that could be relevant to any compliance program, regardless of the industry. Those items are:
Information was siloed- Data detailing risky acts/actors was siloed and not available to employees who needed to know. In this case, information on suspicious prescribers was known either at individual stores or at the corporate level, but was not shared with all locations.
Time pressures and staffing levels- Inadequate time was allotted for employees to conduct meaningful due diligence. Employees, sometimes working alone, felt pressure to fill prescriptions quickly and often cut corners regarding obligations to investigate prescriptions more fully.
Lack of training- Training on identifying risks was nonexistent or lacking. Pharmacists testified that they initially received no training on how to identify and resolve prescribing red flags and later, more training time was allotted for how to process gift cards than on due diligence.
Misaligned incentives- Employee pay and bonuses were based on total sales. This culture promoted the filling of even questionable prescriptions and discouraged pharmacists from refusing to fill prescriptions they found to be suspect. This situation was exacerbated when pharmacy staff was supervised by non-pharmacists who were unaware or did not appreciate a pharmacist’s duty verify the validity of a prescription.
A robust compliance program is an integral part of any healthy company, regardless of size or industry. Compliance programs can ensure employee and public safety, as well as the longevity and prosperity of the company. This case illustrates the need for each program to provide training on identifying and mitigating risks, to allocate adequate resources (both personnel and technological) to compliance, to share information with those who need it, and to provide incentives for adherence.
References:
City and County of San Francisco, et al. v. Purdue Pharma L.P., et al. (ND California 2022)
Stempel, J. (2023, May 17). Walgreens reaches $230 million opioid settlement with San Francisco. Reuters. https://www.reuters.com/legal/walgreens-reaches-230-mln-opioid-settlement-with-san-francisco-2023-05-17/
(Originally published on LinkedIn here: https://www.linkedin.com/pulse/recent-230-million-walgreens-settlement-highlights-prough-phd-cfe/?trackingId=L5145CZ0SxWABBxx1EpA%2Bg%3D%3D)