CVS Health reaches agreement in principle for global opioid settlement

Rhea-AI Summary

CVS Health (NYSE: CVS) has reached an agreement in principle to resolve opioid-related lawsuits and claims with states and tribes across the U.S. The company plans to pay approximately $5 billion over the next decade, with $4.9 billion allocated to states and local governments, and $130 million to tribes. This settlement will fully resolve claims dating back over ten years and is not an admission of liability. CVS continues to defend against unresolved litigation while reinforcing its commitment to combat opioid misuse through various community initiatives and investments.

Positive

• CVS has agreed to a substantial resolution of opioid lawsuits, which may help improve its legal standing and public image.
• The settlement allows CVS to invest in strategic priorities while managing financial liabilities over ten years.

Negative

• The total settlement amount of $5 billion could put a strain on CVS's financial resources.
• CVS continues to face ongoing litigation not covered by the settlement, which may impact future financial performance.

WOONSOCKET, R.I., Nov. 2, 2022 /PRNewswire/ -- CVS Health® (NYSE: CVS) announced today that it has agreed in principle to a financial resolution designed to substantially resolve all opioid lawsuits and claims against the company by states, political subdivisions, such as counties and cities, and tribes in the United States.

If all conditions are satisfied and the non-monetary terms – which still need to be determined – are finalized, CVS Health has agreed it will pay approximately $5 billion ($4.9 billion to states and political subdivisions and approximately $130 million to tribes) over the next ten years beginning in 2023, depending on the number of governmental entities that agree to join the settlement. 

The agreement would fully resolve claims dating back a decade or more and is not an admission of any liability or wrongdoing. CVS Health will continue to defend against any litigation that the final agreement does not resolve.

"We are pleased to resolve these longstanding claims and putting them behind us is in the best interest of all parties, as well as our customers, colleagues and shareholders," said Thomas Moriarty, Chief Policy Officer and General Counsel, CVS Health. "We are committed to working with states, municipalities and tribes, and will continue our own important initiatives to help reduce the illegitimate use of prescription opioids."

CVS Health has undertaken numerous initiatives to fight opioid abuse, which include:

• Significant investments in technology and procedures to support its pharmacists in exercising their professional obligations.
• Innovative, comprehensive, and industry-leading policies, procedures and controls relating to the dispensing of controlled substances.
• Effective educational programs on prescription drug misuse that have reached 1.8 million teens and parents.
• Rollout of more than 4,750 safe medication disposal units in stores and local police departments across the country, which to date have collected more than 4.5 million pounds of unused medication.
• Installation of time delay safes in more than 7,650 pharmacies across 45 states and Washington, DC to help deter opioid robberies.
• Nationwide access in CVS Pharmacy locations to life-saving opioid overdose reversal medication.

The timing of cash settlement payments, spread over multiple years, allows the company to continue to invest in its strategic priorities. More information about the settlement will be provided during the CVS Health third quarter 2022 earnings conference call on Wednesday, November 2 at 8:00 a.m. ET. 

Cautionary Statement Concerning Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of CVS Health. By their nature, all forward-looking statements, including the statements in this press release related to the scope and coverage of the ultimate settlement and the expected financial and other impacts that could result from the Settlement Framework, are not guarantees of future performance or results and are subject to risks and uncertainties that are difficult to predict and/or quantify. Actual results may differ materially from those contemplated by the forward-looking statements for a number of reasons as described in our Securities and Exchange Commission filings, including those set forth in the Risk Factors section and under the heading "Cautionary Statement Concerning Forward-Looking Statements" in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q.

You are cautioned not to place undue reliance on CVS Health's forward-looking statements. CVS Health's forward-looking statements are and will be based upon management's then-current views and assumptions regarding future events and operating performance, and are applicable only as of the dates of such statements. CVS Health does not assume any duty to update or revise forward-looking statements, whether as a result of new information, future events, uncertainties or otherwise.

About CVS Health
CVS Health® is the leading health solutions company, delivering care like no one else can. We reach more people and improve the health of communities across America through our local presence, digital channels and over 300,000 dedicated colleagues – including more than 40,000 physicians, pharmacists, nurses and nurse practitioners. Wherever and whenever people need us, we help them with their health – whether that's managing chronic diseases, staying compliant with their medications or accessing affordable health and wellness services in the most convenient ways. We help people navigate the health care system – and their personal health care – by improving access, lowering costs and being a trusted partner for every meaningful moment of health. And we do it all with heart, each and every day. Follow @CVSHealth on social media.

Media contact
Mike DeAngelis
401-770-2645
Michael.DeAngelis@CVSHealth.com

Investor contact
Larry McGrath
800-201-0938

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SOURCE CVS Health

FAQ

What is the total amount CVS is paying to settle opioid lawsuits?

CVS has agreed to pay approximately $5 billion to settle opioid lawsuits and claims.

When will CVS start making payments for the opioid settlement?

Payments for the opioid settlement will begin in 2023 and will be spread over ten years.

Is CVS admitting liability in the opioid settlement?

No, the settlement agreement does not constitute an admission of liability by CVS.

What initiatives is CVS undertaking to combat opioid misuse?

CVS is investing in technology, education programs, and safe disposal units to combat opioid misuse.

How could the opioid settlement affect CVS's financial performance?

The $5 billion settlement could impact CVS's financial resources but allows for strategic investments over time.