The filing of Opioid-related securities litigation is not a new development; indeed, more than six years ago, I published a post in which I noted the outbreak at the time of a number of opioid-related securities suits against opioid drug companies. Now, in the latest opioid-related securities suits to be filed, and in the wake of the U.S. Department of Justice’s filing of a False Claims Act complaint against the company, a plaintiff shareholder has filed an opioid-related securities class action lawsuit against Walgreens Boots Alliance. A copy of the January 30, 2025, complaint can be found here.

Background

Walgreens is a health and retail pharmacy company operating in the U.S., U.K, and other countries. In connection with its sale of prescription drugs in the U.S., Walgreens is subject to the Controlled Substances Act (CSA). As the opioid crisis has developed and evolved in the U.S., and in response to the opioid crisis, Walgreens, according to the subsequently filed securities complaint, described itself as a “leader in providing education, and resources, as well as implementing best-in-class policies and procedures, to help combat opioid misuse and abuse.”

Notwithstanding these representations, the complaint alleges, the company has been the subject of multiple legal proceedings in connection with its alleged contributions to the U.S. opioid epidemic. Among other things, in 2013, the company entered an agreement with the DOJ in which the company acknowledged its failure to comply with the CSA. In more recent years, the company has entered a number of civil settlements to resolve claims that it has mishandled prescriptions for opioid painkillers. The company has also made a number of commitments to implement measures designed to detect and prevent the diversion of controlled substances, including of opioids.

On January 17, 2025, the U.S. Department of Justice announced that it had filed a civil complaint alleging that Walgreens had “dispensed millions of unlawful prescriptions in violation of the [CSA] and sought reimbursement for many of the prescriptions from various federal health care programs in violation of the False Claims Act.” The company’s share price fell over 12% on this news.

The Lawsuit

On January 30, 2025, a plaintiff shareholder filed a securities class action lawsuit in the Northern District of Illinois against Walgreens and certain of its directors and officers. The complaint purports to be filed on behalf of investors who purchased the company’s securities between April 2, 2020, and January 16, 2025.

The complaint alleges that during the class period the defendants made false or misleading statements or failed to disclose that: “(i) contrary to the Company’s purported commitment to improved regulatory compliance, Walgreens continued to engage in widespread violations of federal law governing the dispensation of prescription medication and reimbursement for the same; (ii) the foregoing conduct, when revealed, would subject Walgreens to a heightened risk of further regulatory scrutiny, civil liability, and reputational harm; (iii) Walgreens’ revenues from the sale of prescription medications were unsustainable to the extent that they derived from unlawful conduct; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.”

The complaint alleges that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks to recover damages on behalf of the class.

Discussion

As I noted at the outset, over the years there have been a number of opioid-related securities class action lawsuits filed. Some of them have even resulted in significant settlements (as discussed for example here).

However, the most significant opioid-related D&O claims have not been securities class action lawsuits; rather, the most significant opioid-related D&O claims have been derivative suits. As I have noted on this site, there have been very significant settlements in opioid-related derivative lawsuits. For example, as discussed here, in October 2024, Walmart settled an opioid-related shareholder derivative lawsuit for $123 million. As discussed here, the opioid related derivative suit filed against the board of McKesson settled for $175 million, one of the largest derivative settlements ever. Similarly, as discussed here, the opioid-related derivative suit pending against Cardinal Health settled for $124 million.

There have in fact been earlier opioid-related D&O lawsuits filed against retail pharmacy operations like Walgreens. For example, as discussed here, in March 2023, a plaintiff shareholder filed an opioid-related securities class action lawsuit against Rite Aid. And, as discussed here, in January 2021, a plaintiff shareholder filed an opioid-related securities class action lawsuit against Wal-Mart, based on allegations similar to those alleged in the shareholder derivative lawsuit, the settlement of which is noted above. Interestingly, the Rite Aid and Wal-Mart lawsuits, like the one just filed against Walgreens, came shortly after the U.S. Department of Justice had filed a False Claims Act complaint against the companies. 

All of that said, it is noteworthy that this lawsuit represents yet another D&O claim arising out of the opioid crisis and that it is arising at this late date. While the real action on the opioid crisis is elsewhere, this lawsuit, like the other D&O claims that have preceded it, is a reminder that the ongoing opioid crisis does represent a D&O risk for companies whose operations became associated with opioids. This new lawsuit is also a reminder that though the opioid crisis is now many years old, the potential D&O risk associated with the crisis continues.

As I noted at the time when the Wal-Mart lawsuit was filed: “It does seem to me that the accountability process associated with the opioid crisis is continuing to spread outward, from the manufacturers, to the distributers, and now to the dispensing pharmacists – and in that regard, it seems as if the process has let to Walmart simply because of its size. Looked at from a distance, it does appear as if opioids have as their own special quality a sort of reverse-Midas touch, in which everything they touch turns to dross (and if this were not a family-oriented publication I would use a stronger word that ‘dross’). The baleful effect of opioids seems to spell the ruination of everything and everyone who becomes involved with the drugs.”