Giant Eagle loses bid to escape Ohio opioid claims

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REUTERS/Regis Duvignau

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(Reuters) - Supermarket and pharmacy chain Giant Eagle has lost a bid to escape claims by two Ohio counties that it fueled opioid addiction by ignoring red flags that prescriptions were being used for illegal sales.

The order Wednesday by U.S. District Judge Dan Polster in Cleveland, Ohio, means Giant Eagle will face trial next month alongside Walgreens Boots Alliance and Walmart Inc. Rite Aid Corp, which had also been a defendant in the case, recently settled.

The trial will serve as a bellwether to test public nuisance claims against pharmacies in the sprawling multidistrict litigation over opioids.

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"Giant Eagle is committed to responsible pharmacy operations and dedicated to serving our communities ... in each of the five states in which we operate," Dan Donovan, a spokesperson for Giant Eagle, which is represented by Robert Barnes of Marcus & Shapira. "We look forward to detailing our record of compliance with state and federal laws and regulations at trial."

Frank Gallucci of Plevin & Gallucci, a lawyer for plaintiffs Lake and Trumbull Counties, declined to comment.

The retailer had argued that it was entitled to summary judgment because both the U.S. Drug Enforcement Agency and Ohio Board of Pharmacy had repeatedly inspected its facilities and found it in compliance with applicable laws, including the Controlled Substances Act.

That law requires pharmacies to have procedures in place to prevent the diversion of prescription drugs, including opioids, into illegal channels, including a system for reporting suspicious orders.

Polster, however, said the counties had presented "extensive evidence" of possible violations of anti-diversion laws that inspectors did not find, but that Giant Eagle knew about. That evidence included expert testimony that pharmacists repeatedly filled "obvious 'red flag'" prescriptions and documented instances of diversion in the two counties linked to Giant Eagles' prescriptions, he said.

The judge also noted that the counties alleged that the inspections were "limited in scope" and could not necessarily uncover all violations.

While Giant Eagle did not have to show perfect compliance with the law to avoid a public nuisance claim, the judge said, the extent to which it complied was "best left to a jury."

More than 3,000 lawsuits have been filed by local governments around the country accusing drugmakers of falsely marketing opioids as safe and pharmacies and distributors of shirking their duty to monitor and report suspicious prescriptions and orders.

The nation's three largest distributors and Johnson & Johnson have offered to pay up to $26 billion to settle cases against them, though it is not yet clear which states will opt into that deal. OxyContin maker Purdue Pharma LP has won approval for a bankruptcy plan that will resolve claims against it.

Major pharmacy chains, however, have yet to propose a nationwide settlement.

The opioid crisis has been blamed for hundreds of thousands of overdose deaths over the last two decades.

The cases are County of Lake, Ohio v. Purdue Pharma LP et al, No. 18-op-45032, and County of Trumbull, Ohio v. Purdue Pharma LP et al, No. 18-op-45079, in the U.S. District Court for the Northern District of Ohio.

The MDL is In re National Prescription Opiate Litigation, U.S. District Court, Northern District of Ohio, No. 17-md-02804.

For the plaintiffs: Frank Gallucci of Plevin & Gallucci, Jayne Conroy of Simmons Hanly Conroy, Joe Rice of Motley Rice, Paul Farrell of Farrell & Fuller and W. Mark Lanier of Lanier Law Firm

For Giant Eagle: Robert Barnes of Marcus & Shapira

(NOTE: This story has been updated with a comment from Giant Eagle.)

Read more:

Six U.S. states do not join $26 bln opioid settlements with distributors, J&J

Judge will approve Purdue Pharma bankruptcy plan that shields Sacklers

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Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.