Opening Arguments Given in First Week of New Mexico Opioid Trial | Levin Papantonio Rafferty - Personal Injury Law Firm

Opening Arguments Given in First Week of New Mexico Opioid Trial

Opening arguments were given earlier this week (September 6, 2022) in the bench trial for the state of New Mexico’s opioid case against Walgreens, Walmart, and Kroger. The three pharmacy giants stand accused of recklessly dispensing opioids and, in so doing, facilitating the state’s opioid crisis. Together, the defendants are responsible for more than 50% of the opioid pills in New Mexico, according to New Mexico Attorney General Hector Balderas, who opened the bench trial.

Balderas reported to Judge Francis Mathew that New Mexico has suffered overdose deaths per capita that exceed the numbers in West Virginia from 2000 to 2010.

Plaintiffs' attorney Dan Alberstone of Baron & Budd PC spoke after Baldera and called out the pharmacies for ambivalent operations wherein store managers’ drive for profit contradicted pharmacists’ duty to resolve and report red flags in prescriptions.

Levin Papantonio Rafferty attorney Jeff Gaddy spoke to another case issue: how the three defendants not only dispensed opioids but also distributed them. Gaddy told Judge Mathew that less than 60% of pharmacists completed their red flag checklists on prescription fills. According to Gaddy, Walmart’s fifty New Mexico stores implemented a “cut and ship” policy for suspicious orders. This meant that they would trim the size of the order but partially fill it. He further stated that compliance employees were shut down when they asked for better monitoring of suspicious orders.

Walmart failed to fulfill a settlement it had reached with the DEA in 2011 by implementing a policy to flag orders more than three standard deviations from the average—effectively dropping more than 99.97% of orders, Gaddy said. He added that the company also failed to include “common signs of diversion” detailed in the DEA settlement in the pharmacy operations manual, according to a 2011 email from a manager. According to Gaddy, pharmacists were not told they had the option to refuse prescriptions. In one 2015 email, a pharmacist wrote, “We were afraid of getting fired for refusing to fill.”

Gaddy pointed to another 2015 email that “sums up” Walmart’s “callous” nature. In the email, corporate compliance employee Brad Nelson replied to a request for insights into data generated from the refusal-to-fill paperwork required by the memorandum of agreement by saying, “The MOA…expires in 30 days….We have not invested a great amount of effort in doing analysis on the data.”

With regard to Kroger, Gaddy said the supermarket franchise has twenty-four New Mexico stores, which are branded as Smith’s. The company distributed drugs from centers called Peyton’s outside the state. Gaddy informed the judge that a 2005 DEA agreement put the company on notice to implement a “comprehensive regulatory program.”

The company was sanctioned by the judge for not turning over an audit conducted by third-party provider BuzzeoPDMA, according to the plaintiffs. Before opening statements, the judge heard argument on reconsidering the sanction, but the earlier decision stands. Gaddy interpreted this decision as establishing from a legal perspective the substandard nature of Kroger’s regulatory program up to the date of Buzzeo’s report (March 12, 2013). Kroger worked to develop a suspicious order monitoring program for 18 months following the Buzzeo report. The program eventually launched in August 2014 but was used for only two months because the only drug Kroger self-distributed (hydrocodone) was reclassified to a more stringent schedule for which Kroger was not licensed. As such, distribution was moved to a national distributor.

Gaddy described Kroger’s dispensing arm as reflecting a “systemic issue with lack of training.” Not only were pharmacists unfamiliar with the DEA regulations, but they also were ignorant of the key terms, Gaddy said.

The State of New Mexico is represented by Dan Alberstone and Mark Pifko of Baron & Budd PC; Jeff Gaddy of Levin Papantonio Rafferty; Anthony Majestro of Powell & Majestro PLLC; and Luis Robles of Robles Rael Anaya.

Law 360 reported on the opening Plaintiffs’ opening arguments