*

Judge tosses claims over suspicious orders, 'red flags'

*

Claims that company knowingly filled invalid prescriptions

remain

By Brendan Pierson

March 11 (Reuters) - A federal judge on Monday narrowed

the U.S. government's lawsuit accusing Walmart ( WMT ) of fueling the

opioid epidemic, dismissing a claim that the retail giant failed

to report suspicious prescription drug orders to the U.S. Drug

Enforcement Administration (DEA).

Chief U.S. District Judge Colm Connolly in Delaware in the

order also dismissed a claim that Walmart ( WMT ) pharmacists failed to

document "red flags" associated with prescriptions.

However, the judge allowed a claim that pharmacists

dispensed prescriptions that the company's compliance personnel

knew were invalid to go forward.

A fourth claim, that pharmacists dispensed prescriptions

that they themselves knew were invalid, was not part of

Walmart's ( WMT ) motion to dismiss and remains pending.

Walmart ( WMT ) said in a statement that the ruling "reinforces what

we have said all along: the government's lawsuit is misguided

and misapplies the law."

It said the claim allowed by the judge "forces pharmacists

and pharmacies into second-guessing DEA-approved doctors, and to

come between patients and their doctors."

The U.S. Department of Justice declined to comment.

The Justice Department sued Walmart ( WMT ) in December 2020,

accusing the company of repeatedly violating the federal

Controlled Substances Act (CSA) going back to 2013.

It said the company had an obligation under that law to

report suspicious opioid orders received by its wholesale drug

distribution centers to the DEA, but that its procedures for

doing so were inadequate. It said the company failed to report

"at least hundreds of thousands" of such orders.

However, Connolly ruled Monday that the CSA had no such

requirement until it was amended in 2018 to include one

explicitly. Walmart's ( WMT ) wholesale distribution centers stopped

distributing controlled substances earlier that year.

Connolly also found that failure by pharmacists to

investigate and document "red flags," by itself, was not grounds

for liability under the CSA under the text of the law.

The lawsuit is one of the most significant actions by the

federal government against a company over the opioid epidemic.

Other companies targeted by the Justice Department over

opioids include Purdue Pharma, which pleaded guilty to criminal

charges in 2020 over its handling of the addictive painkiller

OxyContin, and drug wholesaler Cencora ( COR ), previously

called AmerisourceBergen.

Walmart ( WMT ) in 2022 settled thousands of lawsuits by state and

local governments over its role in the opioid crisis for $3.1

billion.

Nearly 645,000 people died from opioid overdoses between

1999 and 2021, and preliminary data suggests that the rate has

remained steady at more than 100,000 per year at least through

September 2023, according the U.S. Centers for Disease Control

and Prevention.

The case is United States v. Walmart ( WMT ) et al, U.S. District

Court, District of Delaware, No. 1:20-cv-01744.

For the government: Amanda Liskamm of the U.S. Department of

Justice

For Walmart ( WMT ): Yaakov Roth of Jones Day and others

Read more:

U.S. sues Walmart ( WMT ) accusing retailer of helping to fuel

opioid crisis

OxyContin maker Purdue Pharma pleads guilty to criminal

charges

U.S. sues AmerisourceBergen, says distributor helped ignite

opioid epidemic

CVS, Walmart ( WMT ), Walgreens agree to pay $13.8 bln to settle

U.S. opioid claims