After more than two years of squabbling over production of records in a lawsuit filed by the state, a judge ordered Walgreens to hand over documentation about the company’s profits on sales of opioid drugs in Florida for the past 25 years.
Pasco County Circuit Judge Kimberly Sharpe Byrd on Friday gave Walgreens until Dec. 31 to start turning over “financial information sufficient to show all rebates, discounts, chargebacks, coupon reimbursements and any other money back it received on opioids” it purchased or sold in Florida since 1996.
Byrd’s order came in a lawsuit filed by the Florida attorney general’s office in 2018 seeking unspecified damages against drug manufacturers, retailers and distributors. The case is one of myriad similar legal challenges throughout the country about the devastation wrought by highly addictive prescription opioids such as oxycodone.
Lawyers for Attorney General Ashley Moody last month filed a motion seeking sanctions against Walgreens for making “misrepresentations in sworn testimony and in proceedings before this court” about profits the company made from the sales of opioids.
“Walgreens repeatedly represented to this court, including through a sworn statement by a Walgreens employee, that it does not calculate opioid-related profits in the ordinary course of business. This turned out not to be true. Walgreens’ documents reveal that its executives do calculate Walgreens’ opioid-related profits,” the Nov. 9 motion said.
After Walgreens maintained that it did not have records of its profits from the sales of opioids, Byrd three times ordered the company to provide documents that would allow the state to calculate the revenues.
“In response, Walgreens produced some documents and data, but omitted key information,” the state’s motion said. “By withholding this information, Walgreens artificially inflated its opioid-related costs and deflated its opioid-related revenues.”
Walgreens’ failure to produce the documents deprived the state of evidence that is key to the litigation, lawyers for the state argued.
“Walgreens’ opioid-related profits are at issue in this case because plaintiff seeks disgorgement of what plaintiff alleges are Walgreens’ ill-gotten gains from opioids sales. Walgreens jeopardized the fairness of these proceedings by representing that it does not maintain financial information that it does in fact possess, regularly consults, and analyzes,” the motion said.
The judge’s Friday ruling gave Walgreens until the end of the month to produce the information about opioid-related rebates and other refunds “on an annual basis, and not average percentages based on all the medications Walgreens purchased and sold.”
In addition, the company has to provide affidavits from “a knowledgeable finance or accounting employee” by Dec. 31 attesting to the sources of the rebate information, how Walgreens’ “deal ledger system” and other databases work, and other related information.
“Walgreens is ordered to produce all opioid-related profit calculations Walgreens possesses for Florida, from 1996 to present, including any underlying data sources that show Walgreens’s opioid-related profits in Florida, whether accurate or estimated, including but not limited to” those identified in documents provided by the state, Byrd’s order said.
The judge’s order, which adopted a proposed order submitted by the state, also prohibits Walgreens “at any phase of this case, including at trial” from “criticizing or presenting any information” regarding the state’s calculation of the company’s opioid-related costs, revenues or profits.
Byrd also ordered the company to pay the state’s attorney fees, expert fees and other costs incurred “as a result of Walgreens violations of this court’s orders.”
The state and Walgreens have battled over documents related to the company’s sale of opioids for more than two years.
While the company provided some records, Walgreens did not include information about rebates or other refunds it received from manufacturers and distributors and repeatedly denied that the earnings information existed, according to the state’s motion.
“Plaintiffs only discovered the extent of these misrepresentations through its own investigation of Walgreens’s documents and in its depositions of two Walgreens employees,” the state’s lawyers wrote.
But in a response filed Nov. 16, Walgreens argued that the state’s motion for sanctions “is both mistaken and unnecessary.”
“Walgreens does not generate or maintain any calculation of opioid profits in the ordinary course of business. If it did, it would have been far more straightforward — and would have required the expenditure of far fewer resources — to provide plaintiff with both that calculation and the data used to generate it,” the company’s lawyers wrote.
The company has “not intentionally withheld” information about purchase discounts or rebates and “has gone to great lengths to identify and provide responsive data to allow plaintiff to make those calculations and put forward what it asserts to be an estimate of profits,” they added.
Sanctions are unnecessary because Walgreens “will promptly produce any additional relevant information on purchase price discounts and rebates and will make a corporate witness available to testify about that information,” the company’s lawyers argued.