Walgreens is in the midst of a bad-news hurricane. The Department of Justice has accused the retailer of violating regulations and ignoring red flags in filling millions of opioid prescriptions.
“Walgreens, by prioritizing profits over patient safety and public health, not only violated federal law but also contributed to a devastating public health crisis that continues to impact communities across the country,” the DOJ says in the complaint. “This action sends a clear message that those who enable opioid abuse and fraud will be held responsible.”
In 2022, Walgreens agreed to pay $4.95 billion in restitution over 15 years.
In a statement, Walgreens says the company “stands behind our pharmacists, dedicated healthcare professionals who live in the communities they serve, filling legitimate prescriptions for FDA-approved medications written by DEA-licensed prescribers in accordance with all applicable laws and regulations.”
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Earlier this month, Walgreens released financial results showing progress as it struggles to find a way out of a business model that led to billions in losses.
Sales for the first quarter climbed to $39.46 billion, up from $36.71 billion in the comparable period. Losses grew from $67 million to $265 million. Those results exceeded Wall Street expectations.
"Our first quarter results reflect our disciplined execution against our 2025 priorities: stabilizing the retail pharmacy by optimizing our footprint, controlling operating
costs, improving cash flow and continuing to address reimbursement models,” said
The Deerfield, Illinois-based company is fending off another storm regarding a meltdown in the relationship with Cooler Screens. The screens turned every cooler and freezer door into a digital billboard, and many hailed the technology as a boon to retail media. But the partnership hasn't gone well.
Cooler Screens sued Walgreens in June of 2023 for breach of contract, demanding overdue payments on the $200 million deal. Walgreens countersued for monetary damages, saying the screen technology was glitchy and unreliable.
But Bloomberg just reported a fridge-door bombshell: Cooler Screens dialed up the intensity by reportedly cutting the data feed to the digitized smart doors in retaliation. Walgreens didn’t notice the outage affecting hundreds of coolers for a week. And while the retailer won a temporary order to restore service, Bloomberg quotes Walgreens lawyers, claiming the “brazen pressure tactic intended to harm Walgreens’s business and customer reputation during the busy holiday shopping season,” Bloomberg says.
On Walgreens recent earnings call, another bit of bad news surfaced. Walgreens' CEO admitted that the wildly unpopular tactic of locking up certain products has hurt its business.
"When you lock things up ... you don't sell as many of them," Wentworth said. "We've kind of proven that pretty conclusively."