The office of the Utah Attorney General at the Capitol in Salt Lake City is pictured on Tuesday, Jan. 16, 2024. (Photo by Spenser Heaps for Utah News Dispatch)
Utah will continue to see millions of dollars in settlements with drug companies, stemming from large, multistate lawsuits over the opioid crisis and the manipulation of generic prescription drug prices.
On Monday, the Utah Attorney General’s Office announced a $1.37 billion settlement agreement with the grocery store chain Kroger which, according to filings in federal court, was the state’s largest pharmacy buyer and dispenser of opioids between 2006 and 2014, operating as Smith’s Food and Drug.
That settlement, which was announced by a group of 30 bipartisan state attorneys general, will bring about $45 million to Utah. Per state code, opioid settlements must go toward drug treatment, harm reduction, public health campaigns or other “opioid abatement” programs. Those payments will begin next year.
And last week, on Oct. 31, the attorney general’s office announced another settlement between 50 states and territories, and drug manufacturers Heritage Pharmaceuticals and Apotex. According to a complaint filed in federal court, the companies allegedly engaged in “one of the most egregious and damaging price-fixing conspiracies in the history of the United States.”
Those settlements — an initial $10 million from Heritage and a pending $39.1 million from Apotex — are intended to reimburse people who purchased generic prescription drugs from either company between 2010 and 2016.
Kroger to pay Utah millions for drug rehab, public health
According to court records, Kroger purchased more than 140 million units of oxycodone and hydrocodone between 2006 and 2014, more than any other pharmacy in Utah — the Utah Attorney General’s Office said in a statement that the company was responsible for roughly 15% of the state’s volume of those two drugs.
In a statement, the office highlighted Price, Utah, a community in Carbon County of about 8,000 people. There, a Kroger store bought enough oxycodone and hydrocodone over seven years which would have supplied 71 pills to every person in town, according to the Attorney General’s Office.
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What’s more, prosecutors for the state say Kroger implemented policies to give bonuses to pharmacists based on how many prescriptions they filled.
The Kroger announcement brings Utah’s total amount of settlement funds related to the opioid crisis to more than $500 million, most of that stemming from pharmacies, drug manufacturers and marketing agencies.
“These dollars will help liberate many caught in the cycle of addiction and prevent another generation of Utahns from ever becoming dependent on opioids in the first place,” said Utah Attorney General Sean Reyes in a statement.
A ‘culture of collusion’ among drug manufacturers
The settlements with Heritage and Apotex are part of ongoing litigation, led by Connecticut Attorney General William Tong, against dozens of corporate defendants and company executives over what prosecutors call a conspiracy to unlawfully discourage competition, raise prices, and enforce “an ingrained culture of collusion.”
“Competitors met with each other during industry dinners, ‘girls nights out’, lunches, cocktail parties, golf outings, and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements,” a news release from the Utah Attorney General’s Office reads.
The litigation first started in 2016, targeting Heritage and 17 other corporations for their role in manufacturing and selling 15 generic drugs, and Jeffery Glazer and Jason Malek, two former Heritage executives, who later entered into settlement agreements.
In 2019, another complaint was filed against Teva Pharmaceuticals and 19 of the county’s largest generic drug manufacturers. And a third, more recent complaint names 80 generic drugs that “account for billions of dollars of sales” in the U.S., according to the Attorney General’s Office, naming 26 corporate defendants and 10 individual defendants.
“The overwhelming evidence of illegal practices is based on databases of over 20 million documents, millions of call detail records, and contact information for over 600 sales and pricing individuals in the generics industry,” said Reyes. “The settlement with just two of these manufacturers returns nearly $50 million to individuals who overpaid and demands internal changes to prevent future unfair competition and price gouging.”
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