Compliance called out in Walmart opioid lawsuit

The complaint, filed in the U.S. District Court for the District of Delaware, alleges “hundreds of thousands” of violations of the Controlled Substances Act (CSA), which regulates supply chain participants—from manufacturers to wholesale distributors to retail pharmacies—who handle controlled substances. Under the CSA, suppliers are responsible for preventing the misuse of controlled substances, including prescription opioids.

As a nationwide dispenser and distributor of opioids, and given the number of pharmacies it operates (more than 5,000 nationwide), the complaint states, “Walmart was uniquely well positioned to prevent the illegal diversion of opioids. Yet, for years, as the prescription drug abuse epidemic ravaged the country, Walmart abdicated those responsibilities.”

The DOJ stated it is seeking civil penalties that could “total in the billions.” 

Particularly damning about the allegations is the head-in-the-sand approach of Walmart’s compliance unit concerning the dispensing of controlled substances. Consistent with the CSA, Walmart had in place a compliance policy requiring pharmacists to identify and resolve “red flags” in cases where it appeared prescriptions weren’t issued for a “valid purpose.” Yet, according to the complaint, “while Walmart’s compliance unit collected voluminous information indicating that Walmart was routinely being asked to fill invalid controlled-substance prescriptions, that unit for years withheld that information from pharmacists and allowed them to continue dispensing opioids based on invalid prescriptions.”

The complaint goes on to describe in significant detail several instances in which Walmart’s compliance unit shirked its compliance responsibilities. For example, after facing an enforcement proceeding by the Drug Enforcement Agency (DEA) for dispensing violations concerning controlled-substance prescriptions, Walmart committed to maintain a compliance program “to detect and prevent diversion of controlled substances.”

Despite that committment, Walmart allegedly failed to adopt such a program. While the retailer’s compliance unit compiled “extensive prescription and dispensing data relevant to determining whether a prescription presented red flags,” it chose not to disseminate that information to pharmacists, the complaint states.

Moreover, the compliance unit allegedly ignored numerous warnings and reports from Walmart pharmacists about problematic prescribers or patients. “These reports were submitted to the compliance unit via ‘refusal-to-fill’ forms or other direct communications” and “often included, for example, alarming details about pill-mill prescribers whose prescriptions had been refused,” the complaint states.

To make matters worse, according to the complaint, Walmart managers pressured pharmacists to fill orders as quickly as possible because “shorter wait times keep patients in store.” According to the DOJ, the store managers told pharmacists filling prescriptions was “a battle of seconds” and that “[w]ait times are our Achilles heel!” Pharmacists, as a result, did not have enough time to evaluate or flag each prescription due to the high volume of prescriptions they were processing, low staffing numbers, and pressure to fill prescriptions quickly.

Broader compliance lessons

The glaring red flags Walmart’s compliance unit knowingly ignored, as described in the complaint, serve as a lesson for all compliance officers at companies who dispense and distribute controlled substances. Examples to watch for include:

• Prescriptions for drugs based on patients’ drug-seeking requests rather than medical needs;
• Prescribers who write prescriptions for the same drugs and dosages for large numbers of patients;
• Prescriptions for “cocktails” of drugs known to be abused; and
• Prescriptions for excessive quantities of controlled substances.

The complaint against Walmart further speaks to the importance of making refusal-to-fill information easily retrievable for pharmacists. “Until mid-2015, Walmart did not even have a system that enabled its pharmacists to search for refusal-to-fill information completed by other pharmacists,” the complaint states. “The only ways a Walmart pharmacist could learn about previous refusals-to-fill were through word-of-mouth or by requesting red-flag information from Walmart’s compliance unit before filling a prescription.”

Around approximately 2015, Walmart introduced a new platform through which pharmacists could submit refusal-to-fill forms. While the system allowed pharmacists to search for refusal-to-fill forms submitted by other pharmacists for specific prescribers or patients, it didn’t automatically notify pharmacists to red-flag information. “Nor were they able to review all comments other pharmacists had made on refusal-to-fill forms,” the complaint states. Walmart also failed to train pharmacists on the availability and use of these refusal-to-fill forms in this new system.

Another compliance lesson from the complaint: Take care to follow up on red flags. Because Walmart did not do so, the complaint alleges, “the company often avoided obtaining readily available information that would have corroborated, rather than resolved, the red flags.” For other compliance officers, examples of such readily available information to watch for includes state databases for prescription drug monitoring, public records of state medical licensing boards, and public criminal records.

The complaint also indicates pharmacists have an ethical obligation, and a right, to be judicial about the prescriptions they receive. In Walmart’s case, while it eventually changed its policy, its compliance unit at one point prohibited pharmacists from categorically refusing to fill all prescriptions issued by pill-mill prescribers. “Rather, the compliance unit told pharmacists that they needed to consider each individual prescription—an approach that made it impractical for pharmacists to reject all prescriptions issued by these pill-mill prescribers,” the complaint states.

Walmart fights back

In a reactionary blog post, Walmart called the lawsuit “misguiding and misleading.” It argued its pharmacists have “refused to fill hundreds of thousands of opioid prescriptions they thought could be problematic,” and that “Walmart has blocked thousands of questionable doctors from having their opioid prescriptions filled by any of our pharmacists, as part of our good-faith efforts to help address the opioid crisis.”

Walmart described the lawsuit as “riddled with factual inaccuracies, mischaracterizations and cherry-picked documents taken out of context.” It added that “it is outrageous 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 dispute here, Walmart argued, is not whether pharmacists should fill a prescription that is knowingly faked or forged. They shouldn’t. “The Department’s lawsuit raises a different issue: What a pharmacist should do with a prescription that is valid on its face and written by a state-licensed and DEA-approved doctor,” Walmart said.

The government’s lawsuit also highlights the damned-if-you-do, damned-if-you-don’t position that it puts Walmart and other companies in. “Many doctors have sued pharmacists and pharmacies—including Walmart—for blocking their prescriptions, saying they have tarnished their professional reputations,” Walmart noted. “The Department is putting pharmacists and pharmacies between a rock and a hard place by demanding they go further in second-guessing doctors, while state health regulators are saying they are going too far.”

On Oct. 22, Walmart filed a lawsuit against the Department of Justice seeking to clarify the roles and responsibilities of pharmacists and pharmacies under the CSA. That case is pending before the U.S. District Court for the Eastern District of Texas.

The DOJ’s lawsuit comes at a time when the U.S. government is increasingly targeting companies for their role in the opioid epidemic. This has resulted in multi-billion-dollar enforcement actions against companies like Purdue Pharma and Reckitt Benckiser Group. Chief compliance officers also have faced charges for their individual roles in the opioid epidemic.