Kroger Agrees to Pay $1.2 Billion to Settle Opioid Claims

The News

The grocery chain Kroger said on Friday that it had agreed to pay about $1.2 billion to states, local governments and Native American tribes to settle claims that its retail pharmacies played a role in fueling the opioid crisis.

Kroger, which was accused of improperly monitoring prescriptions of highly addictive painkillers filled in its store pharmacies, said it would pay the settlement over 11 years, beginning in December. The company said legal fees, which will be paid over six years, would add $177 million to the total.

Kroger said it was not admitting wrongdoing by reaching the settlement.

Background: Pharmacy chains have been settling opioid claims.

Kroger is the latest in a growing group of pharmaceutical manufacturers, distributors and pharmacy chains that have agreed to large settlements with state and local governments that accused them of seeding a public health disaster.

Three large pharmacy chains that compete with Kroger — Walgreens, CVS Health and Walmart — reached similar settlements last year totaling about $13 billion. Another, Rite Aid, has not yet announced a nationwide settlement.

The claims against Kroger and its competitors have focused on the role of their pharmacies in flooding communities with legal painkillers. In lawsuits against Kroger, the attorneys general in Washington State and West Virginia accused it of failing to investigate overprescribing and of withholding data from its pharmacists that could help them safely dispense the pills.

Why It Matters: Opioid settlement money is funding recovery efforts.

As other opioid settlement payments have begun to be disbursed, states, municipal governments and Native American tribes have said they are using the money to fund services for opioid abuse victims and to buy drugs to reverse opioid overdoses.

The attorney general of North Carolina, Josh Stein, who helped lead the negotiations with Kroger, said in a statement on Friday that Kroger’s settlement “will help save lives, and we will make sure these companies can’t repeat their mistakes.”

What’s Next: A grocery mega merger.

Kroger, which operates stores in different parts of the country under grocery brands like Harris Teeter and Ralphs, has been trying to complete a merger with another chain, Albertsons, announced last year. Kroger said on Friday that the opioid settlement agreement would not impede the merger.

Kroger said on Friday that it planned to divest more than 400 stores, primarily in Western states, in an effort to assuage concerns from antitrust regulators.

Jan Hoffman contributed reporting.