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Kroger grocery chain to pay $1.2 billion to settle opioid lawsuits

Kroger, one of the nation’s largest supermarket chains, has agreed to pay more than $1 billion to settle lawsuits alleging it failed to monitor suspicious orders of addictive pain pills that fueled the nation’s opioid crisis.

The company announced Friday it will pay up to $1.2 billion to states and local governments, and $36 million to Native American tribes over 11 years.

The money adds to more than $50 billion in settlements obtained by state and local governments suing opioid-industry players alleged to have flooded the nation with addictive pills, despite red flags that they were being diverted to the black market.

Governments aim to use the money to ease the opioid crisis and save lives. Among the ways: paying for drugs to reverse overdoses, bolstering addiction treatment services and creating education campaigns.

The nation’s addiction crisis is still raging, even if far fewer people are dying from prescription-pill overdoses. In recent years, the drug crisis has increasingly been propelled by illicit fentanyl manufactured in secret labs in Mexico and smuggled into the United States. More than 110,000 people died of overdoses in 2022, two-thirds of them from synthetic opioids such as fentanyl, according to federal estimates.

Attorneys representing states and other governments hailed the settlement as the first involving regional supermarket pharmacies.

“With many cases against regional pharmacy defendants still pending, we will continue to aggressively litigate these remaining cases,” said a statement by attorneys Jayne Conroy, Paul T. Farrell Jr. and Joe Rice, part of the plaintiffs’ executive committee of lawyers.

Local governments in 33 states, as well as D.C., can opt into the settlement, the attorneys said. Payments are expected to begin in December.

Other well-known chains such as CVS, Walgreens and Walmart previously announced settlements to resolve thousands of opioid-related lawsuits.

Kroger, which operates more than 2,200 pharmacies nationwide, did not admit wrongdoing but said in a statement the settlement was a “milestone” in resolving opioid lawsuits.

“This is an important milestone in the Company’s efforts to resolve the pending opioid litigation and support abatement efforts,” Kroger said in a statement.

The announcement comes as Kroger is seeking to merge with Albertsons, another of the nation’s largest grocery chains, in a deal that still needs regulatory approval. The companies also announced Friday they are selling 413 stores to C&S Wholesale Grocers, a move intended to placate antitrust regulators at the Federal Trade Commission.

The company, in a news release, acknowledged it expects to a take a $1.4 billion loss during the second quarter of 2023. In a second-quarter earnings call Friday, Kroger Chief Financial Officer Gary Millerchip said the settlement and payments won’t affect the company’s ability to complete its proposed merger.

In recent months, Kroger has settled opioid claims with West Virginia for $68 million and New Mexico for $58.5 million.

States have alleged that chain pharmacy operations were among many companies that failed to spot suspicious orders of addictive pain pills. In a lawsuit filed last month, Salt Lake County in Utah alleged that Kroger saturated the county with more than 69 million doses of hydrocodone and oxycodone pills between 2006 and 2014.

The Drug Enforcement Administration requires companies to flag suspicious orders of controlled substances. Kroger acted as a distributor and dispenser of the pills, the lawsuit said, and “instead of taking any meaningful action to stem the flow of opioids into communities, they continued to participate in the oversupply and profit from it.”

Plaintiffs’ attorney Jeff Gaddy, of Levin Papantonio Rafferty, said the settlement “is another step toward fulfilling our commitment to hold responsible all entities that contributed to the opioid epidemic that has taken so many lives and impacted far too many.”

Jaclyn Peiser contributed to this report.

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