The opioid crisis has affected communities across America. Every day, about 130 people in the US die of an opioid overdose, with a large fraction of those deaths attributable to prescription painkillers, according to the Centers for Disease Control.
Major contributors to the epidemic include big drug companies, like Purdue Pharma, which pushed opioid painkillers on the healthcare establishment under the false premise that they were safe and non-addictive. They also include doctors and other health care providers who looked the other way when confronted with worrisome information about the drugs and knowingly allowed patients to abuse them.
Then there are other players further down the chain — such as pharmacy chains and small businesses that sold or distributed legal prescription opioids without arguably knowing about the risks. Obviously, responsible parties need to be held to account for the crisis, but it’s a bit unclear where the culpability should end.
When being ensnared in government investigations and enforcement cases over opioids, these companies have often been stiffed on coverage. When they hear “opioids,” insurers seem apt to run for the hills and leave policyholders to fend for themselves.
Take the story of Giant Eagle. Giant Eagle is a Pittsburgh-based grocery chain that was started in 1918. It has since grown to be a sizable privately-held grocery company with stores in Pennsylvania, West Virginia, Ohio, Indiana, and Maryland. The company also owned Youngstown, Ohio-based pharmacy chain Phar-Mor. Like other pharmacies in the 1990s and 2000s, Phar-Mor filled prescriptions for opioid painkillers, among other medications.
The grocery chain has liability insurance from major insurers Zurich and XL, providing more than $225 million in coverage. Yet the insurers have denied the grocer’s request for coverage of legal expenses associated with opioid claims, according to Giant Eagle. The company alleged in a lawsuit filed against the insurers that it is facing claims worth potentially billions of dollars. Zurich has “denied coverage and refused outright to defend Giant Eagle,” the retail chain said in its court filings.
The opioid epidemic hit Ohio particularly hard. Pharmacies in Ohio received shipments of 3.4 billion prescription opioid pills between 2006 and 2012, according to the Cleveland Plain Dealer. In some areas of the state, enough painkillers were supplied to provide each resident with 600 pills per year. The grocery chain said it was merely a pass-through and did not deserve blame for the crisis.
Courts have often agreed with the pharmacies, especially in lawsuits against skittish insurance providers. Recently, a federal court in Illinois found that Cincinnati Insurance was responsible for paying a wholesale drug company’s $3.5 million settlement with the West Virginia Attorney General’s Office over opioid distribution. The insurer had alleged that it should not have to provide coverage because the underlying issue, the health effects of opioids, did not constitute an “occurrence” under the policy.
Although a lower court initially agreed, the Seventh Circuit of Appeals overturned that holding. Ultimately, the lower court ruled that the matter at issue constituted a “negligence-based claim,” which was entitled to receive coverage and that the wholesale drug provider had acted appropriately to settle the case with the West Virginia officials.
Try as they might, insurance companies have not been able to wriggle out of opioid claims.