Opioid Settlement Drags Walgreens To $3.7 Billion Quarterly Loss

Walgreens Boots Alliance reported a $3.7 billion loss in its fiscal first quarter thanks to its share of a massive global settlement with other drugstore chains to settle claims its pharmacies contributed to the opioid epidemic.

Walgreens Thursday reported a $3.7 billion net loss, or $4.31 a share, for its first quarter ended November 30, 2022. That was well off the year-ago period when Walgreens earned a net profit of $3.58 billion, or $4.13 a share.

“First quarter loss per share was $4.31 compared to earnings per share of $4.13 in the year-ago quarter reflecting a $6.5 billion pre-tax charge recognized in connection with the previously announced opioid litigation settlement frameworks and certain other opioid-related matters,” Walgreens disclosed Wednesday in its quarterly earnings report.

CVS, Walgreens and Walmart – the nation’s three largest retail U.S. pharmacy chains — agreed during the quarter to pay more than $13 billion in a massive global settlement to resolve claims they contributed to the opioid epidemic. The U.S. Centers for Disease Control and Prevention estimates the nationwide opioid crisis has led to more than a half million deaths from overdose in the last 20 years. Walmart, CVS and Walgreens combined have more than 23,000 U.S. pharmacies.

Investigations by state and federal attorneys as well as lawyers in private practices representing families of opioid victims have cited the role of distributors and pharmacies in the epidemic. A 2019 investigative report in the Washington Post said Walgreens “handled nearly one in five of the most addictive opioids” at the peak of the crisis surrounding the painkiller and acted as its “own distributor.”

Meanwhile, Walgreens Thursday reported sales dipped 1.5% to $33.4 billion as the company transitions to what its top executive calls a “consumer-centric healthcare company.”

“We’re making significant progress in driving our U.S. Healthcare segment to scale and profit, including the recent VillageMD acquisition of Summit Health,” Walgreens Chief Executive Officer Rosalind Brewer said in a statement accompanying the earnings report. “Our core retail pharmacy businesses in both the United States and United Kingdom remain resilient in challenging operating environments. Execution across segments reinforces our confidence in achieving full-year guidance, and our strategic actions are creating long-term shareholder value.”