Walmart, CVS Set to Pay San Francisco $19 Million in Opioid Settlements

San Francisco will receive up to $18.8 million to abate the opioid overdose epidemic thanks to settlements with Walmart and CVS Pharmacy for their alleged negligent oversight of opioid prescription practices.

The San Francisco Board of Supervisors on Wednesday approved the two settlement agreements, both part of nationwide opioid-related lawsuits, which include up to $6.8 million from Walmart (PDF) over the next six years and up to $12 million over 10 years from CVS Pharmacy (PDF).

The latest drug settlements come as San Francisco faces a persistent overdose crisis where the majority of deaths are related to fentanyl, an opioid that can be up to 50 times stronger than heroin. It also arrives on top of a projected $130 million that the city is slated to receive through other settlements made directly with other pharmacy chains, drug manufacturers and distributors for their roles in the wide-reaching overdose crisis.

“For far too long, millions [of people] across America have lost loved ones to this crisis. And local governments in cities like San Francisco have had to shoulder the burden,” City Attorney David Chiu told KQED. “This is a crisis that did not come out of thin air. It was created by the opioid industry when extremely dangerous, addictive drugs were marketed to patients as safe. And we now know that to be a blatant lie.”

Last November, Walmart agreed to pay $3.1 billion to settle numerous opioid-related lawsuits across the nation. San Francisco’s cut comes from the $265 million payout made to California in that settlement. During the same month, CVS also agreed to a $5 billion settlement with 19 states for its role in the opioid crisis, and $470 million of that settlement was slated for California.

San Francisco has collected more than $7 million from settlements related to the drug crisis so far, according to Chiu. Additional settlements with companies such as Allergan and Teva are still pending approval and could bring the city’s total to $130 million. That includes the victory against Walgreens last year, but the amount from that settlement has not yet been determined.

Funding overdose prevention

The opioid settlement funds are slated to be used for overdose prevention efforts, such as purchasing and distributing Narcan, a fast-acting opioid overdose reversal medicine.

But several supervisors and overdose prevention advocates say the city should also use the funds to help nonprofits operate safe consumption sites, facilities where people can smoke or inject drugs with medical supervision to prevent overdose deaths and connect users to other health and social services.

Because safe consumption sites are still illegal at the state and federal levels, the city attorney has not yet agreed to use the settlement dollars for the facilities.

In 2022, Gov. Gavin Newsom vetoed a bill that would have allowed pilot safe consumption sites to operate in San Francisco, Oakland and Los Angeles.

The Board of Supervisors, with Chiu, who oversaw the city’s successful trial against pharmacies, drug manufacturers and distributors, will hold a closed-session discussion on April 18 to discuss whether the funds could be used for safe consumption sites.

“I’ve been providing consistent advice to policymakers on these issues, and those conversations continue,” Chiu said. “I do believe that overdose prevention centers can open in San Francisco, according to the so-called New York model.”

In New York City, a private nonprofit called OnPoint NYC funds and operates safe consumption sites, which are also illegal in New York. San Francisco is in fact poised to move forward with opening safe consumption sites using a model similar to New York’s; local health nonprofits including The Gubbio Project, the San Francisco AIDS Foundation and HealthRIGHT360 have said they would like to provide the services.

But financing safe consumption services privately will also be a challenge, the nonprofits’ leaders say. OnPoint NYC has said that its program, which covers two locations, costs $1.4 million annually.

“This is money that has been fought for for people who are suffering from the opioid crisis,” said Lydia Bransten, executive director of The Gubbio Project. “There is no one more deserving of having a center where they are protected from overdosing and dying than people who are living on the street using drugs.”

The San Francisco Board of Supervisors recently voted to allow city officials to solicit donations for the nonprofits to help speed their opening. But Bransten said her nonprofit has not received any additional funding since that financing option became available.

San Francisco Supervisor Hillary Ronen said opening safe consumption sites would be worth the legal risk because opening the sites could begin to slow the overdose epidemic.

“There is a difference of opinion on what is a legal decision and what is a policy decision for us, and I want us to have that discussion all together,” Ronen said during a Board of Supervisors meeting on April 4. “It is beyond time that we open these [facilities], and there is one person, the city attorney, who is standing in the way.”

More than 200 safe consumption sites operate around the globe to help prevent overdose deaths in countries such as Denmark, Norway, Portugal, Spain, Canada, France and Australia.

In the U.S., San Francisco and New York City are not alone in trying to navigate federal policy to open safe consumption sites: In Philadelphia, the medical nonprofit Safehouse has been tied up in a legal battle for several years over its supervised injection services.

In Providence, Rhode Island, lawmakers earlier this month approved a two-year pilot program to allow supervised consumption sites. That bill is now heading to the governor’s desk, and if it’s approved, the state could start running the services by 2024.