San Francisco City Attorney announces $230 million settlement with Walgreens after victory in opioid litigation

San Francisco’s landmark lawsuit was the first opioid bench trial in U.S. to result in a win for plaintiffs and has yielded over $350 million

SAN FRANCISCO (May 17, 2023) — San Francisco City Attorney David Chiu announced today that he has reached a nearly $230 million settlement agreement with Walgreens following the City’s win in federal court against the pharmacy chain and opioid distributor. Under the agreement, Walgreens will pay $229,610,000 over the course of 14 years, with the vast majority coming in the first eight years. Settlement funds will go towards addressing the opioid crisis in San Francisco.

City Attorney David Chiu speaks at a press conference announcing settlement with Walgreens after victory in opioid litigation.

This settlement stems from landmark litigation San Francisco brought in 2018 on behalf of the People of the State of California against the opioid industry for fueling the opioid epidemic. San Francisco sued multiple opioid manufacturers, distributors, and dispensers, but by the end of the liability trial in 2022, all defendants except Walgreens had settled.

After an eleven-week liability trial, Judge Charles R. Breyer of the U.S. District Court for the Northern District of California ruled in San Francisco’s favor and found Walgreens liable for substantially contributing to the opioid epidemic in San Francisco and perpetuating a widespread public nuisance. The Court found Walgreens over-dispensed opioids without proper due diligence and failed to identify, report, and halt suspicious orders as required by law. This was the first bench trial in the nation to result in a win for plaintiffs and the first bench trial to find Walgreens liable.

The remedy phase of the litigation was set to begin last fall, but the parties requested a continuance of the trial given productive settlement negotiations. The litigation will be dismissed as a result of the settlement with Walgreens.

Over the course of this litigation, the City Attorney’s Office secured over $350 million in cash payments, benefits, and fees from the opioid industry to go towards opioid abatement and overdose prevention in San Francisco.

“Opioids have wreaked havoc across our nation leading to immense suffering and untold damage,” said City Attorney Chiu. “Cities like San Francisco have shouldered much of the burden of the opioid epidemic. Thousands of attorneys, public health officials, and advocates have spent nearly two decades trying to hold the opioid industry accountable for creating this public health crisis. I am proud our office was able to prove in court that the opioid industry perpetuated this problem. Following our win against Walgreens during the liability phase, this historic agreement ensures Walgreens is held accountable for the crisis they fueled and our City receives appropriate resources to combat the opioid crisis and bring relief to our communities.”

“San Francisco and the Department of Public Health will use these critical funds to save lives and bring people into treatment,” said Dr. Grant Colfax, San Francisco Department of Public Health Director. “As we address the serious and continued impacts of fentanyl to our city, we can help many San Franciscans on their journey to wellness and recovery.”

“San Francisco stood up and took on Opioids defendants, persevered in complex and difficult litigation, and negotiated landmark settlements that will bring much needed funding to abate the opioid crisis in our community,” said Elizabeth J. Cabraser, Partner at Lieff Cabraser Heimann & Bernstein, LLP. “But, San Francisco did more than that, for itself and for states, cities and counties across the country: the public nuisance liability judgment San Francisco won in trial in federal court catalyzed additional nationwide opioid settlements with Walgreens, Teva, Allergan, Walmart, and CVS, totaling over $18 billion, and marks a turning point in all opioids litigation.”

Case Background
The settlement arises out of City and County of San Francisco, et al., v. Purdue Pharma L.P., et al. In 2018, the San Francisco City Attorney’s Office filed this landmark case on behalf of the People of the State of California alleging that the corporate practices of opioid manufacturers, distributors, and dispensers fueled a widespread surge of opioid-related addiction and overdose in San Francisco, creating an ongoing public nuisance in the region.

Over the course of the litigation, nearly all defendants elected to enter into settlement agreements with the plaintiffs. The City Attorney’s Office previously secured a $10 million settlement agreement with pharmaceutical company Endo and a $54 million settlement agreement with opioid manufacturers Allergan and Teva. The City has also approved settlements worth approximately $11 million from CVS, $6 million from Walmart, and $45 million settlement from opioid manufacturer Johnson & Johnson and distributors McKesson, Cardinal, and AmerisourceBergen. Additionally, San Francisco is likely to receive funding from the bankruptcy estates of Mallinckrodt Pharmaceuticals, Purdue Pharma and the Sackler family.

In the Court’s August 2022 decision finding Walgreens liable for fueling the opioid crisis, Judge Breyer succinctly described Walgreens’ years of misconduct that caused so much suffering in San Francisco: “The evidence at trial established that from 2006 to 2020, Walgreens pharmacies in San Francisco dispensed hundreds of thousands of red flag opioid prescriptions without performing adequate due diligence. Tens of thousands of these prescriptions were written by doctors with suspect prescribing patterns. The evidence showed that Walgreens did not provide its pharmacists with sufficient time, staffing, or resources to perform due diligence on these prescriptions. Pharmacists experienced constant pressure to fill prescriptions as quickly as possible, and a shortage of resources to review them before dispensing. As a result of Walgreens’ fifteen-year failure to perform adequate due diligence, Plaintiffs proved that it is more likely than not that Walgreens pharmacies dispensed large volumes of medically illegitimate opioid prescriptions that were diverted for illicit use and that substantially contributed to the opioid epidemic in San Francisco.”

From 2006 to 2014, San Francisco County saw 163,645,704 opioids distributed, enough for 22 pills per person per year. Between 2015 and 2020, San Francisco saw a 478 percent increase in opioid-related overdose deaths, and in a typical day at the Zuckerberg San Francisco General Hospital Emergency Department, approximately 25 percent of visits are opioid-related. San Francisco’s litigation was the fourth bellwether case in the federal opioid litigation proceeding involving more than 3,000 American cities, towns, and counties, bringing opioid manufacturers, distributors, and pharmacy chains to court for their role in creating the opioid epidemic.

Over the last five years, San Francisco Deputy City Attorneys Owen Clements, Sara Eisenberg, John George, Jaime Huling Delaye, Yvonne Meré, Julie Van Nostern, and City Attorney’s Office employees Michaela O’Rourke and Sarah Gutierrez worked to on this litigation to hold the opioid industry accountable for the harm perpetuated.

In addition to the San Francisco City Attorney’s Office, a number of private law firms represented the City in the litigation, including the four co-lead trial counsel and their firms, Richard Heimann of Lieff Cabraser Heimann & Bernstein LLP, Aelish Baig of Robbins Geller Rudman & Dowd LLP, Jayne Conroy of Simmons Hanly Conroy, and Peter Mougey of Levin Papantonio Rafferty, as well as the Renne Public Law Group, Weitz & Luxenberg P.C., and Andrus Anderson.

Judge Breyer’s ruling can be found here. The case is City and County of San Francisco, et al., v. Purdue Pharma L.P., et al., U.S. District Court for the Northern District of California, Case No. 3:18-cv-07591-CRB. The settlement agreement with Walgreens will be presented to the San Francisco Board of Supervisors and San Francisco Mayor London N. Breed for approval.

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