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The US Department of Justice has sued Walmart, claiming that the retail giant played a role in the opiate crisis in America. But there are several reasons why the stock can survive the process.
DOJ claims that there are no adequate staff at
Walmart
pharmacies and pressure from managers allowed suspicious orders to be placed on a large scale. According to the lawsuit, these decisions, which the DOJ says were motivated by profit, led to Walmart illegally releasing these drugs – a violation of the Controlled Substances Act – and thus played a role in the opioid crisis.
In turn, Walmart hit back at the agency. It is said that the process “invents a legal theory that illegally forces pharmacists to meet between patients and their doctors” and that its pharmacists have actually refused to complete “hundreds of thousands” of problematic prescriptions.
Walmart’s move and response are not too many surprises. This fall, Walmart sued the DOJ for more clarity on the role of pharmacies and their employees under the law. Walmart shares also did not react much to the news on Wednesday morning, falling 0.2% to $ 143.88 on the recent check.
The news is certainly not welcome for Walmart. DOJ claims that the managers pressured the pharmacists to fulfill the orders quickly, because the company believed that this service attracted buyers and kept them in stores. The lawsuit also says the company did little to help pharmacists who raised red flags and, in one case, completed prescriptions from a doctor under federal investigation who refused to answer pharmacists’ questions.
Walmart said it has “always empowered our pharmacists to refuse to fill” prescriptions.
At the same time, it could have been worse. The DOJ has previously considered criminal charges for Walmart, but ruled against the route, pursuing civil proceedings instead. Walmart is not the only company on the cross either. Bankruptcy Purdue Pharma, the maker of OxyContin, has already pleaded guilty to three federal offenses. Meanwhile, other local governments have sued Walmart, along with colleagues
CVS Health
(CVS),
Rite
Help (RAD) and
Walgreens Boots Alliance
(WBA), for their alleged roles in the crisis.
In the end, unless there are more bombs in the process, it probably won’t do too much beating in Walmart’s stock. Shares have risen by more than 21% so far, as the retailer has seen an increase in new buyers during the pandemic. Even if Walmart settled with the DOJ – as Purdue did earlier this year for a total of $ 8.34 billion – that would be just over 6% of third-quarter tax revenue, or 1, 5% of the nearly $ 555 billion in revenue is estimated to increase this year.
Write to Teresa Rivas la [email protected]