DAY zI?ljlj ilelCl - DIESEL 2i .3i 34 2-i .3531? ECICI i .Erlrl.3rllj.3i TE DIRECT NUMBERS {31:13} 3t zI-t Eromesoav .cors. September 2019 FOIA CONFIDENTIAL TREATMENT REQUESTED BY JONES DAY PM ELE CTR Axial IL Gustav W. Eyler Director Consumer Protection Branch U. S. ep artment of Justice 95 Penns ylva ni a Avenu e, NW ER-"ashington, D.C. 20530?0001 GustavW .E yler@ us doj . gov Re: almart Inc. Dear Mr. Eyler: Iwrite on behalf of Walmart Inc. or ?the Company") regarding the Department of I us tice?s civil investigation into the Company regarding possible violations of the Controlled Substances Act and the False Claims Act investigation has been ongoing for nearly three years, and, during that entire period, Walmart has endeavored to work cooperatively with the Department. Walmart has produced to the government an enormous volume of information?nearly one million pages of documents and six million individual prescription records?and today it is providing an additional production of documents that DOJ has requested relating to the Company?s suspicious order monitoring program. In light of the Company?s extensive cooperation with DOJ to date and our desire to continue to support law enforcement nationwide in its efforts to combat the opioid crisis, we carefully considered the issues we raise in this letter and only send it to you because of what we perceive to be the troubling continued course of this investigation and certain recent events that have come to our attention. Despite the Company?s extensive cooperation, the volume of information available to the government, and the time the Department has had to analyze that information, the Working Groupl You have informed us that the Working Group includes 15 US. Attorney?s Offices across the countly: the District ofColorado, the Middle District of Florida, the Southern District ofIndiana, the District ofKansas, the Eastern District of Kentucky, the Western District ofMissouri, the District ofNew Mexico, the Eastern District ofNew York, the Eastern District ofNorth Carolina, the Eastern District of Oklahoma, the Middle District ofTennessee, the Eastern District of Texas, the Western District of Virginia, the Southern District of West lJirginia, and the District of ?v?v'yomitvg, as well as the Civil Fraud Section of the Civil Division, the Narcotics and Dangerous Drug Section of the Criminal Division, and the Consumer Protection Branch of the Civil Division. CONFIDENTIAL SUBJECT TO FRE 4GB SI. 4112} AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. .JD. .151 HS HAY W. Eyler September 2019 Page 2 still refuses to present a overview of its investigation. Instead, the Working Group continues to shift and expand its requests for and other inforntation. The ntamter itt which the Departntent ltas conducted this investigation, including the length of tinte and the antount of resources that it has expended itt an attentpt to bring a case against Walntart, is greatly disproportionate to Walmart?s current and historical role in the controlled substance dispensing and distribution ntarkets, particularly given the Company?s current efforts to contbat the opioid crisis?efforts that ltave drawn opposition front state regulatory bodies and ntedical practitioners who believe Walntart is being too aggressive itt restricting opioid dispensing. The Working Group and DUI are ntissing on significant opportunities to ntake a nteaningful intpact on the opioid crisis given the Department?s reluctance?and at tintes refusal?to accept assistance front Walmart to help bring unscrupulous prescribers to justice. As we ltave stated repeatedly, and as we state again today, Walntart stands ready to use its cutting edge analytical capabilities to help the Departntent bring cases against prescribers. The recent events that we need to address with you involve developntents itt the Eastern District of Texas We ltave learned that ED TX?co?chair of the Working Group?has within the past ntonth threatened Brad Nelson, a fornter Walntart contpliance entployee, with indictntent. According to inforntation we ltave received, it appears that the EDTX indictntent would be brought under the sante tlteoty and evidence that EDTX attentpted to advance against Walmart last year?and for which the Company received a declination from DOJ . Given the long history here and the extended discourse we had previously with the Departntent and EDTX, we are concerned about how a threatened indictntent against Mr. Nelson intpacts the overall investigation by the Working Group. We are concerned that either of the following ntay be true: the threat of an indictntent of Mr. Nelson is being ntade to pressure alntart itt a civil proceeding itt violation of DOJ procedures and the rules of legal ethics, or, just as concerning, EDTX actually intends to prosecute an individual not because the facts support it in an effort to entbarrass Walntart in retaliation for the previous declination of a crintinal case against the ICompany. We further understand that only last week AUSA Josh Russ, who, as representative, serves as IGo?Chair on the Working Group, participated itt a nteeting between Mr. Nelson?s cottnsel and EDTX crintinal AUSA Heather Rattan regarding her recent threats of indictntent. We understand that AUSA Russ was present in the roont while AUSA Rattan repeatedly told Mr. Nelson?s counsel that she believed ?Bad Brad" Nelson was a crintinal and falsely stated to Mr. Nelson?s counsel that Walntart was placing blante on Mr. Nelson. These developntents cause to question whether Walntart will be treated fairly based on the facts and on the nterits of its efforts to contbat the opioid crisis, or whether the investigation into Walntart is ntotivated by the previous declination of the criminal case. In view of these concerns, we respectfully request that the Working Group present the factual bases for any allegations of wrongdoing by Walmart before the tolling agreentent expires on October 25, 2019, and before the Company answers to any additional questions front the Working Group. We also intend CONFIDENTIAL SUBJECT TO FRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conftdenttal treatment requested. .152 .1111}; HS HAY. Gustav W. Eyler September 2019 Page 3 to suspend further production of documents under the Omnibus Subpoena until these issues relating to the status of this investigation are resolved. I. Investigation and ?Walmartis Cooperation Throughout the entirety of investigation into Walmart; the Company?s cooperation has gone far beyond what would be required of a litigant. This includes pulling massive amounts of prescription data into a format not kept in the ordinary course of business; compiling financial data related to controlled substances that would otherwise not exist; painstakingly preparing lists of scores of employees in pharmacy? and field-level positions over a five-year period; and satisfying numerous other Working Group requests that we believe are overbroad or otherwise unenforceable. As you know; the Company has also made multiple presentations to the government regarding its dispensing practices; answered scores of interrogatory?style questions posed by the Working Group on a range of topics; and produced its entire production of documents in the multi?district litigation; In re: Notional Prescription Opiate Litigation; No. (ND. Oh.) as well as its expert reports and depositions; employee depositions; and various filings in that action; all of which give the Working Group an incredibly detailed description of the Company?s historical distribution practices that far exceeds what the government could achieve through a typical investigation. A. ED Prior Criminal Investigation of ?Walmart The Department?s interaction with Walmart on this matter began nearly three years ago with an unjustified criminal investigation initiated by EDTX that culminated in a declination by DOJ several months before the formation of the Working Group. Given that some Working Group members may be unfamiliar with the complete history of this matter; we provide a brief overview of how almart has arrived at this position. Walmart first learned of the criminal investigation into the Company by EDTX on December 7; 2016; when the DEA searched the pharmacy at Walmart Store 206 in McKinney; Texas; for records relating to a local doctor. In March 201?; AUSA Rattan presented an email search warrant to the Company for emails involving certain pharmacists in Texas; and then broadened her request for information related more generally to the dispensing of controlled substances inJune 201?. almart agreed to work cooperatively with EDTX and quickly produced all records in response to AUSA Rattan?s initial requests without requiring a subpoena. Over the course of the next 13 months; EDTX caused five DEA Administrative Subpoenas to be issued as part of its criminal investigation of the Company. These various requests for documents and prescription data sought a vast amount of information across a large number of custodians related primarily to Walmart?s dispensing practices. Walmart complied with the subpoenas and attempted to engage with ED TX in an effort to understand and potentially resolve the investigation into the Company. CONFIDENTIAL SUBJECT TO FRE 403 SI. 4 113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. WMTCO RR. .JD. .153 JOIN HS HAY Gustav W. Eyler September 2019 Page 4 As part of that effort, Walmart met with US. Attorney Joe Brown of ED TX, along with both the criminal and civil divisions of the USAO, multiple DEA agents, and counsel from the Narcotics and Dangerous Drug Section ofDOJ?s Criminal Division, over May 3 4, 2018, to summarize its internal investigation and to explain that it did not find any evidence of criminal conduct on behalf of the Company or its employees. The Company invited ED TX to share any evidence in its possession that would typically be present when pharmacies or pharmacists are charged with crimes, including any evidence of collusion or inappropriate financial arrangements between pharmacists and prescribers, or any evidence of improper relationships between pharmacists and Walmart customers. EDTX offered no such information at that time or at any other time. After our presentation on the first day of the meeting, AUSA Rattan said that the USAO wanted to resolve the matter, but that any resolution would need to ?embarrass Walmart." Throughout her investigation, AUSA Rattan focused on the guidance contained in various emails sent by Mr. Nels on?specifically his repeated instructions to pharmacists that oards of Pharma cy did not allow pharmacists to blanket refuse prescriptions and his alleged failure to address pharmacists? concerns regarding problematic prescribers. But the government selectively ignored portions of the very same emails demonstrating that Nelson, without fail, directed pharmacists to refuse to fill any prescription they felt may not be issued for a legitimate medical need, and encouraged pharmacists to document those refusals so that he could personally share information about problematic prescribers or patients with the DEA. It became clear from the USAO ?s demands during the second day of the May 201 8 meeting that EDTX was attempting to leverage a civil settlement with the threat of indictment in clear violation of USAM The message from the then-Civil Chief as well as AUSA Rattan was that Walmart must either pay $250 million to EDTX or $1 billion to DOJ for a global resolution or the Company would be indicted. During the Summer of 2018, Walmart presented its appeal of what it believed to be entirely meritless criminal investigation to the Of?ce of the Deputy Attorney General. On August 31, 2018, the Department informed Walmart that it was declining to prosecute the Company. The next month, AUSA Rattan told the Company that, notwithstanding DOJ ?s criminal declination, her investigation into the Company remained ongoing and that Walmart should continue to comply with the various DEA Administrative Subpoenas related to her investigation. The Company did as requested for the next three months, until the Working IGroup?comprised of 15 separate US. Attorney?s Of?ces and three litigating components of DOJ?announced its mandate from DOJ leadership to engage with Walmart on a civil investigation of the Company. - In parallel amlx'or joint corporate investigations and proceedings int-?olviivg multiple Department components and-?or other federal, state, or local enforcement authorities, Department attorneys should remain mindful of their ethical obligation not to use criminal enforcement authority unfairly to extract, or to attempt to extract, additional civil or administrative moneta1y payments.? USANI CONFIDENTIAL SUBJECT TO FRE 4G3 RI. 411:} AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. .JD. .154 JON HS Gustav W. Eyler September 2019 Page 5 B. ED Civil Investigation and the DOJ ?Worlting Group By the time the Working Group was formally constituted in 2018, Walmart had been responding to broad document demands from EDTX Civil AUSA Josh Russ since November 201?. AUSA Russ stated at the outset that he was conducting a parallel civil investigation of potential CSA violations related to Walmart?s dispensing of controlled substances. From November 201? to April 2018, Walmart engaged in extensive dialogue with AUSA Russ. voluntarily produced tens of thousands of pages of records without requiring any service of process, and created documents and compiled data that did not exist in the ordinary course of business in an effort to cooperate with the USAO ?s civil investigation. On November 20, 2018, you and AUSA Russ, now the EDTX Civil Chief, contacted counsel for Walmart and revealed that a Working Group had been constituted to investigate Walmart for potential civil violations of the CSA and FCA. The Company offered its cooperation with the Working Group and entered into a tolling agreement, even agreeing to make the tolling agreement retroactive to May 2018 for potential CSA violations. The Company later extended the tolling agreement at the request of the DOJ . The Company met in person with the Working Group on December 14, 2018; February 2019; and August 22, 2019. for a total of approximately 12 hours. During the first Working Group meeting, we answered questions about Company processes and set forth plans for regular communications and productions to DOJ. During our second meeting, we gave an extensive presentation lasting more than four hours regarding the Company?s pharmacy dispensing practices and policies. a case study of previous allegations against the Company, and a proposed process that the Working Group adopted for the Company?s response to the Omnibus Subpoena. And at our most recent meeting. which lasted more than six hours. we presented answers to the nearly 150 detailed questions regarding dispensing and distribution practices and policies, Company systems, and other topics identified by the Working Group. At each of these meetings which were attended by nearly 20 DOT attorneys we asked questions of the Working Group in turn. but we have received few answers. Asjust one example. more than six months ago we produced records of of! prescriptions (notjust controlled subs tances) sold at Walmart Store 146? in amestown, Tennessee, from 2013 2018. We have repeatedly asked the Working Group to discuss its analysis of this store?s data to better understand the Working Group?s position on Walmart?s prescribing practices. But the Working Group has repeatedly declined to respond. The Company has also produced a vast amount of non-privileged responsive information in response to the Omnibus Subpoena issued by the Working Group on February 13, 2019. The Omnibus Subpoena requests a swath of information across 36 broad categories related to the dispensing and distribution of controlled substances, including records of all prescriptions filled? CONFIDENTIAL SUBJECT TO FRE 408 410 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. .JD. .155 HS HAY Gustav W. Eyler September 2019 Page a both controlled and non-controlled substances?at all pharmacies in the Working Group?s 15 districts over a five?year period; prescription records for all pres cribers who have been corporately blocked by the Company}1 along with 329 additional prescribers listed in the Omnibus Subpoena, over a five?year period; various broad document requests; and all witness statements, transcripts, pleadings, and discovery materials that the Company produced in the MDL. Even though the DEA likely is not authorized to issue a subpoena as overly broad as the Omnibus Subpoena under 21 U.S.C. BIG?and a court likely would not enforce vast portions of the Omnibus Subpoena as drafted given its unreasonable scope and breadth?Walmart has nevertheless produced an immense volume of information in response to it, including approximately one million pages of documents and more than six million individual prescription records related to more than 630 separate prescribers. As stated above, Walmart?s cooperation has gone far beyond the mere production of documents kept in the ordinary course of business. The Company has dedicated thousands of hours and substantial internal resources to provide extensive and difficult?to?gather information requested by the Working Group. Just today, for example, the Company produced all Suspicious Order Reports submitted to the DEA and the corresponding internal Remediation Plans issued during one phase of its suspicious order monitoring program, as requested by the Working Group during the August 22 meeting. Producing this latest set of documents required the Company to comb through various custodians? information to retrieve the relevant data and then compile the disparate information into an organized format?a process Walmart is not obligated to undertake in simply responding to a DEA Administrative Subpoena. In response to Walmart?s cooperation, however, the Working Group?s recent actions have all of the hallmarks of a fishing expedition in search of some violation?any violation?to hang on Walmart, rather than an investigation into identified legal infractions. And there appears to be no end in sight to the Working Group?s requests of Walmart. Instead of focusing its inquiries at this stage of the investigation, the Working Group continues to expand and shift its demands. Within the past two months, the Working Group has identified dozens of new custodians, with the indication that hundreds of additional custodians may be requested. The Working Group also recently posed nearly 150 interrogatory?style questions regarding the Company?s dispensing and distribution practices, only to ask an additional 20 or so additional questions after Walmart provided answers to the prior set of questions during our last in?person meeting. As recently as last week, the Working Group demanded dispensing data for 42 additional prescribers, many of whom are outside of the Working Group districts?even though the Company has already produced dispensing data for more than 630 prescribers across the coturtry. 3 That is, prescribers for whom Walmart will not fill (my controlled substances at any pharmacy. CONFIDENTIAL SUBJECT TO FRE 403 RI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf 1 entlal treatment requestedJON HS HAY Gustav W. Eyler September El, 2019 Page 7 C. The Group?s Theory of the Case At every turn in this investigation Walmart has asked the lli-"orking Group to explain the facts and law underlying its case and to identify any evidence that demonstrates Walmart violated the CSA or the FCA. To date, the Working Group has refused to do so. As best we can infer from some Working Group members? statements during our in?person meetings, theory appears to be that the Company should have instituted a corporate block policy?that is, prohibiting the filling of all controlled substance prescriptions written by a particular prescriber nationwide? sooner than it did. Such a policy is not even discussed in DEA guidance, much less required under the CSA or its regulations. As we have discussed with you previously, the Company has voluntarily implemented a corporate block policy as one aspect of its forward?leaning opioid stewardship efforts. The Company did so at significant risk, knowing that state boards of pharmacy and medicine believe that corporate blocks violate state law by overriding the professional judgment of pharmacists. As it turns out, since Walmart implemented the policy, many state boards of pharmacy liar-v? taken the position that the policy is under state law a development predicted by many on Walmart?s compliance team when the Company declined to implement the policy sooner. Indeed, just as one example, this past June, the Tennessee Board of Pharmacy raided a Walmart pharmacy after a prescriber complained that he had been corporately blocked. The Board?s Executive Director has requested that the Company discontinue its corporate block policy and the Board has since conducted?as recently as this wee surprise inspections at several of the Company?s pharmacies. This sort of pushback is by no means limited to the state of Tennessee.? In short, Walmart has implemented an aggressive policy to help its pharmacists navigate the challenging task of addressing prescriptions from questionable prescribers who may nevertheless still be authorized by the DEA to prescribe controlled substances. Walmart has also invested substantial resources into analytics to proactively identify questionable prescribers. Walmart has taken these actions even though they are not required by any law or regulation, and in the face of significant blowback from state regulatory agencies. It cannot be the case that Walmart should be held liable for not taking these actions earlier, especially when, to our knowledge, no other major pharmacy chain has to date pursued a similarly robust strategy. During our recent meeting on August 22, 2019, you stated that the Working Group was still months away from being able to articulate its specific allegations. Respectfully, we must question the merits of this investigation if the Department is unable at this point to provide a roadmap of the facts and legal violations it believes Walmart committed. Our request for a 4 For example, ?lv'almart has received an administrative warning from the Wisconsin Board of Pharmacy stating that there was evidence of professional misconduct where a pharmacy blocked controlled substance prescriptions from a clinic; the Idaho Board of Pharmacy sent a letter urging ?Ilv'almart to change its policy on corporate blocks; and the Alaska Board of Pharmacy sent a letter to pharmacists criticizing blanket decisions regarding refusals to fill. CONFIDENTIAL SUBJECT TO FRE 4er 51!. 4 it} AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. .JD. .15? HS HAY Gustav W. Eyler September 2019 Page 8 presentation from the Working Group is fair and reasonable, particularly given the millions of documents and prescriptions produced in this matter. II. Recent Developments in EDTX While Walmart has worked diligently to cooperate fully in responding to the Working Group?s many requests, recent events have required us to reassess the status of DOJ ?s investigation and the parties? interactions going forward. Below is a summary of information that has recently come to our attention that we feel compelled to raise in this letter. In May 2019, AUSA Russ contacted Mike Gibson, Mr. Nelson?s attorney, to seek an interview with Mr. Nelson regarding the Working Group?s investigation of almart. Mr. Gibson asked AUSA Russ if he intended to charge Mr. Nelson in a civil complaint against the Company. AUSA Russ said that he did not. Mr. Gibson then asked if Mr. Nelson was the target of any criminal investigation by EDTX, and AUSA Russ said that Mr. Gibson would have to speak to AUSA Rattan. Mr. Gibson contacted AUSA Rattan and told her that he understood the criminal case against Walmart had been declined in favor of allowing the matter to proceed civilly, and that he wanted to confirm that Mr. Nelson was not a target of any criminal investigation in EDTX. AUSA Rattan refused to confirm that Mr. Nelson was not a potential target. Mr. Gibson therefore told AUSA Russ that Mr. Nelson could not sit for an interview in the Working Group?s investigation given his conversation with AUSA Rattan. In late August or early September 2019, but a?ar Walmart?s most recent August 22 meeting with the Working Group at which Walmart pressed the govermnent again for its theories of liability, AUSA Rattan contacted Mr. Gibson and informed him that criminal investigation continues to be active; (2) Mr. Nelson is a criminal target of that investigation and could be indicted; and (3) Mr. Nelson must cooperate with the investigation and sit for a proffer or face indictment. Based upon the information we have received, AUSA Rattan provided no new facts and is threatening to indict Mr. Nelson presumably under the very same theory that resulted in the Department?s declining to prosecute the Company last August. Any objective observer of this situation could reasonably infer that the threat to indict Mr. Nelson constitutes an end?run around the Department?s declination, and that EDTX is acting on its frequently stated desire to ?embarrass" the Company; is attempting to use the criminal process to coerce a large civil settlement with the Working Group; or is attempting to force Mr. Nels on to sit for a proffer in an attempt to obtain ?dirt" against Walmart that does not exist. Any such motivation or conduct would violate both sound prosecutorial practice and DOJ policy for the handling of criminal and civil cases. CONFIDENTIAL SUBJECT TO FRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf1dent1al treatment requested. WWITCO RR, .153 HS HAY W. Eyler September 2019 Page 9 We are also deeply concerned that AUSA participated in a nteeting last week between AUSA Rattan and Mr. Nelson?s counsel. On September 20, 2019, Mr. Gibson ntet with AUSA Rattan regarding her recent threats of indictment, and AUSA was present itt tlte roont while AUSA Rattan repeatedly told Mr. Gibson that she believed ad rad" Nelson was a crintinal and falsely represented that the Company was trying to scapegoat AUSA Russ?s undisputed participation itt the nteeting raises serious concerns regarding the current dentands of the Working Group. Disproportionate Focus on ?Walmart These recent events reaffirnt our view that focus on Walmart is disproportionate contpared to other investigative targets of the governntent. DOJ ?s dedication of such extraordinary resources over an ttnlintited period of tinte is unwarranted given almart?s role. history, and good citizenship itt the battle against opioid abuse. The size and scope of the investigation suggests that it ltas reason to believe Walmart is a bad corporate actor itt the opioid story. But there is no evidence or allegations of intentional ntisconduct or intproper efforts to prontote or profit from the use of opioids like those seen itt other cases that DOJ ltas brought itt its figltt against the opioid epidentic. Nor can there be any suggestion that Walmart is sitting on the sidelines itt that figltt. Walmart ltas intplentented what we believe is the ntost forward?leaning opioid stewardship progrant of any retail pharntacy chain, with initiatives that include exceptional cooperation with law enforcentent that go beyond what ntany other pharntacies ltave done, and far beyond what the law requires. and has done so despite significant resistance front state regulators and ntedical practitioners who believe Walmart has gone too far. The Department should not focus its enforcentent efforts on a Company that ltas defied significant opposition to enact market? leading policies to contbat opioid abuse. A. Understanding ?Walmart?s Role and Obligations in the Filling of Opioid Prescriptions Unlike other defendants itt opioid litigation, Walmart is neither positioned nor incentivized to prontote prescription opioid use and there are no credible allegations whatsoever that it ltas done so. Walmart does not manufacture. market. or prontote the use of opioids, and when it distributed opioids which it no longer does it distributed tltent only to its own pharmacies. never to pill mills. pain clinics or internet pharntacies. Also, itt contrast to other participants itt the opioid market. opioid dispensing is a sntall part of Walmart?s overall business; Walmart?s success does not depend on revenues generated by its pharmacies. let alone by the dispensing of opioids at its pharmacies, and there is no evidence that Walmart?s corporate policies were designed to drive opioid sales. These are critically intportant facts that should ntake clear that Walmart is not antong the principal wrongdoers in the opioid stoty. CONFIDENTIAL SUBJECT TO FRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conftdenttal treatment requested. .JD. .159 .1111}; HS HAY Gustav W. Eyler September 2019 Page 10 1. Dispensing Practices Walmart?s primary interaction with opioids is through the ?lling of prescriptions at its pharmacies. We have not uncovered, and DOJ has not brought to our attention, any conduct by Walmart of the kind present in cases the Department has brought against other pharmacies and pharmacists, nor any evidence of intentional wrongdoing by Walmart?s pharmacists. Of course, a scorched-earth investigation of virtually any entity engaged in millions of highly regulated transactions over a great many years could find some mistakes. Such an investigation is obviously not an appropriate use of DOJ resources, and the present investigation appears to bejust that kind of fishing expedition. Moreover, the Working Group?s prolonged search for prescriptions that may be questioned in hindsight is also troubling in this context because con?icting dictates of state and federal regulators put pharmacists in an almost impossible situation. Federal law requires a pharmacist to exercise his or her ?corresponding responsibility? not to knowingly ?ll a prescription that was not ?issued for a legitimate medical purpose? by a practitioner ?acting in the usual course of his professional practice.? 21 C.F.R. When making this determination, pharmacists do not have access to nearly as much data as the doctor who wrote the prescription. Moreover, federal and state regulators have provided shifting and conflicting direction on how a pharmacist should fulfill the ?corresponding responsibility? obligation. For example, the DEA has at times indicated that the ?corresponding responsibility? is fulfilled by ensuring that a given prescription was written by a licensed pres criber in a facially appropriate dosage, while more recently it has suggested that pharmacists must engage in a much more far-reaching inquiry despite limited ability to examine patients and second?guess licensed doctors. State Boards of Pharmacy and Medical Boards maintain, in contravention of a more active view of pharmacists? role, that pharmacists are not permitted to second-guess doctors. See, rag, American Medical Association, AMA Meeting: Pharmacists warned on intruding into prescribing decisions (July 1, 2013), 30T099?o?f (AMA adopted policy stating that a pharmacist who inappropriately queries a physician?s rationale behind a prescription, diagnosis, or treatment plan is interfering with the practice of medicine); Report of the AMA Board of Trustees, am ystemf files:r 20 1 a 9? refc omm?b?addend um. (adopting a resolution criticizing pharmacies and others for ?a blanket proscription against filing [sic] prescriptions for opioids that exceed numerical thresholds without taking into account the diagnosis and previous response to treatment for a patient . . . Although the DEA has argued that there are occasions when pharmacists must simply refuse to fill a prescription because there is a risk the customer will abuse or even further distribute the drug, sea a. Ralph J. Bertolino, Ralph . Bertolino Pharmacy; Revocation of Registration, 55 FR 4729-01, 1990 WL 3527175 (Dept. ofJust., Feb. 9, 1990):. Holiday CVS, LLC, dfbfa CVSEPharmacy Nos. 219 and 5195; Decision and Order, 7? FR 623 113?0 1, 2012 WL 48327?0 (Dept. of Just., Oct. 12, 2012), medical authorities including HHS have warned that abruptly cutting off a customer from some prescription opioids may cause the customer to suffer damaging CONFIDENTIAL SUBJECT TO FRE 40S RI. 410 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf1dent1a1 treatment requested. WWITCO RR, '1 ED HS HAY Gustav W. Eyler September 2019 Page 11 or life-threatening withdrawal and thus it is improper for the pharmacist to refuse to ?ll in that situation. Sea, tag, Department of Health and Human Services, Pom Best Practices Inter?Agency Task Force Report: Liodotes, Gaps; and RacommendoZions, (May 23, 2019), 201 9?05?23pdf (limiting the duration of prescriptions, making unrequested changes to doses, or placing barriers to obtaining properly prescribed pain medications has had the unintended consequence of limiting access to optimal pain care," which can lead to ?significant medical complications, prolonged suffering, and increased risk of conditions"). For the Department to mount a case based on retrospective questioning of pharmacists? professional judgments in this context presents profound fairness concerns. Likewise, any attempt to pursue Walmart based on its corporate policies with respect to dispensing also raises serious questions. As explained more fully below, Walmart now has policies allowing for three scenarios in which controlled substance prescriptions will not be filled: (1) An individual pharmacist has always been empowered to refuse to fill a prescription based on the exercise of the pharmacist?s professional judgment. (2) A pharmacist can blanket refuse to fill all prescriptions written by a particular prescriber. (3) Walmart can corporately block a particular prescriber, prohibiting all Walmart pharmacies from filling prescriptions written by that prescriber. The Working Group has focused on the time before Walmart implemented its corporate? block policy and questioned Walmart?s earlier decision not to institute that policy. But building a case on that earlier decision would be an unfair and unsupported theory of liability. As noted above, state boards of pharmacy have taken the position that binding state laws directly prohibit corporate blocks, requiring that every prescription be considered on its own merits. And state boards of pharmacy and the AMA have strongly criticized Walmart?s policy, a position that reflects longstanding views of pharmacists? role held by regulators at the state level and the medical profession. In the face of state pharmacy board enforcement actions challenging its corporate block policy, 1u?-a?almart has defended its implementation of corporate blocks because it is committed to protecting its customers against opioid-related risks and complying with the Department?s current view of the law. But for the DOJ to pursue Walmart because it earlier did not allow corporate blocks in accord with the general views of state regulators is neither fair nor appropriate. Even before establishing a policy allowing corporate blocks, Walmart?s policies and procedures for dispensing controlled substances empowered its pharmacists to refuse to fill prescriptions and exceeded those of other major national chain pharmacies. Walmart has hired many pharmacists who have worked for its competitors over the years and who say that Walmart?s controlled substance policies were superior, more ?strict," and provided them tools to refuse questionable prescriptions that simply did not exist at their previous employers. CONFIDENTIAL SUBJECT TO TIRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf1dent1al treatment requested. WWITCO RR, .151 .1111}; HS HAY Gustav W. Eyler September 2019 Page 12 To our knowledge, other major retail chain pharmacies have not historically had a tool empowering individual pharmacists to blanket refuse controlled prescriptions from doctors for whom they do not feel comfortable filling. Likewise, almart understands that other major retail chain pharmacies have never had a formal mechanism for a ?corporate block.? While DOJ has criticized Walmart for not adopting this policy sooner, its chief competitors, to our knowledge, have not adopted such a policy to this day. Even Walmart?s policies and procedures with respect to individual refusals to fill far exceed those of other major retail chain pharmacies. For example, since 2015, refusals to fill have been searchable by other Walmart pharmacists as a data point in future evaluation of prescriptions by that same prescriber. Walmart?s investigation shows that, while its competitors may have had the discretion to refuse to fill a prescription, there was no requirement that refusals to fill be documented in a way that was transmitted to a central repository that was searchable by other pharmacists. At most, competitor pharmacists have kept a paper record in a file at the pharmacy. 2. Distribution Practices It would be similarly turwarranted for DOJ to devote substantial resources to pursuing a case based on the period of time?prior to April 2018 when Walmart self?distributed controlled substances. Walmart recognizes that as a self-distributor it had an obligation to maintain appropriate controls to prevent diversion, including by monitoring for suspicious orders. See 21 U.S.C. 823; 21 CPR. 1301.24. But as several government officials have acknowledged, the law as set forth in statute and regulations?regarding what constituted a ?suspicious order? or what constituted adequate ?suspicious order monitoring? programs was either vague or entirely non?existent, and the DEA historically has been unwilling or unable to clarify it. See Tr. of Senate Judiciary Hearing on DEA Oversight, Testimony of Chuck Rosenberg at 30 (June 22, 201 a) think we?ve been slow. I think we?ve been opaque. I think we haven?t responded to [registrants? questions]. We?re trying to issue guidelines more quickly. We?re trying to answer their questions In re: Prescription Opia te Li ti ga tioa. (ND. Ohio 1 8 04), ep os ition of Deputy Assistant Administrator Joseph Rannazzisi Dep. 31?:12?22 (testifying that the DEA itself lacked internal guidance as to what orders constituted ?suspicious orders? under the regulation); In re: Prescription Opiate Litigation (ND. Ohio Deposition of Assistant Special Agent in Charge of the Cleveland DEA Office Keith Martin at 218:3?21 (testifying that he would not know how a registrant would detect a suspicious order). Instead, the position has been that ?one size does not fit all,? and each regulated entity should tailor its monitoring programs to the nature of its business and its distribution activities. See, e. g, In re: Matiortai Prescv'ivtioa Opiate Litigation (ND. Ohio li?MD?2804), Deposition of Deputy Assistant Administrator Thomas Prevoznik at 44?:2?14 (O: expects that each registrant will review its own business model and design a SOM system that fits its specific method of distribution?? A: ?That?s CONFIDENTIAL SUBJECT TO TIRE 40S SI. 410 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552(b}. FOIA confldentlal treatment requested. WWITCO RR, .152 HS HAY Gustav W. Eyler September 2019 Page 13 Walmart did precisely that. Walmart?s distribution activities were entirely confined to its own pharmacies. The critical purpose of requiring distributors to maintain controls against diversion is to detect and deter rogue pharmacies that ?ood communities with controlled substances without regard to CSA requirements. Walmart did not present that risk. Because Walmart distributed only to its own pharmacies, it knew at all times that its distribution activities did not lead to significant diversion. We do not believe the Department has evidence to the contrary. To the extent the Department intends to rely on September 2006, and December 200?. letters from Deputy Assistant Administrator Joseph T. Rannazzisi to identify speci?c distribution obligations that it contends were violated. that approach would run headlong into the Administration?s policy?codified in the Justice Manual in December EDIE?against treating a party?s noncompliance with a guidance document as a violation of applicable statutes or regulations. Those letters purport to ?reiterate the responsibilities? of distributors of controlled substances. but the requirements they articulate are found nowhere in the text of the CSA or in its implementing regulations. As the Department has made clear. however, ?guidance documents cannot by themselves create binding requirements that do not already exist by statute or regulation,? and the Department therefore ?should not treat a party?s noncompliance with a guidance document as itselfa violation ofapplicable statutes or regulations.? Justice Manual 1? 20.100. Reliance on the Rannazzisi letters presents a textbook example of that kind of regulatory abuse. B. ?Walmart?s Industry-Leading Efforts to Combat the Opioid Crisis Walmart is committed to being a market leader among pharmacies in the fight against the opioid epidemic. Walmart has developed a comprehensive opioid stewardship program?the Opioid Stewardship Initiative. described in more detail below that we believe is the most forward?leaning effort by any pharmacy chain to address the risks of prescription opioids. This program goes above and beyond Walmart?s legal obligations under the indeed, many aspects of the program have triggered significant backlash from state medical and pharmacy boards and others in the medical community for being too aggressive in restricting access to opioids. Walmart?s opioid stewardship program continues to evolve with more information and cooperation from law enforcement. The program is designed to reduce the volume of opioids dispensed; provide pharmacists with the best available information about the legitimacy of each opioid prescriptiom prevent diversion of opioids; provide safe opioid disposal solutions; educate patients. employees, and the public about the risks of opioids and use of alternative pain management methods; and save lives by making anti?overdose medications readily available. The specifics of the program are described below. CONFIDENTIAL SUBJECT TO TIRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA confldentlal treatment requested. WWITCO RR. .JD. .153 JON HS HAY Gustav W. Eyler September 2019 Page 14 l. 7-Day I 50 MME Policy Walmart has implemented what we believe to be a first-of?its?kind national pharmacy driven policy to restrict initial acute opioid prescriptions to no more than a seven-day supply, with up to a 50 morphine milligram equivalent (MME) maximum per day, and follows state law where it is more restrictive than Walmart?s policy.5 This policy is informed by guidance from the Centers for Disease Control (CDC) that indicates the risk of opioid addiction increases significantly for patients taking opioids for more than seven days, and the risk of accidental overdose doubles for those with prescriptions above :30 MMB. This limit on initial prescriptions for acute conditions also reduces the number of pills that go unused and remain in patients? homes, limiting the potential for diversion and abuse. When Walmart pharmacies receive initial prescriptions that exceed its policy limits, a pharmacist consults with the patient to ensure they are amenable to receiving fewer pills (which they usually are), except in rare circumstances where the pharmacists determine that in their professional judgment patient harm may result from following the policy. Prior to implementing this restriction, Walmart sent letters to more than 400,000 prescribers informing them about decision to implement the CDC guidelines as pharmacy policy for initial opioid prescriptions for acute conditions. In the face of numerous complaints from doctors and patients about the policies? impact on patient access to opioids, Company pharmacists consistently engage with patients and prescribers to educate them on the reasons for the policy. a. Pushback Against ?Walmart?s 7-Day 50 MME Policy T?Day 50 MME policy has come under fire from several agencies and health care organizations for being too aggressive in restricting patient access to opioids. For example, shortly after Walmart announced its policy, the American Medical Association (AMA) approved a resolution on the ?Inappropriate Use of CDC Guidelines for Prescribing Opioids," criticizing pharmacies such as Walmart for what it described as ?a blanket proscription against filing [sic] prescriptions for opioids that exceed numerical thresholds without taking into account the diagnosis and previous response to treatment for a patient . . . Sea Report of the AMA Board of Trustees, am ystem..*r files:r 20 1 a 9?1'efc omm?b? ad dend um. pd f. Some state medical boards have also been critical of the policy. For example, the Texas Medical Board has privately expressed to Walmart the agency?s view that Walmart?s initial acute opioid policy is inconsistent with state law and may constitute the unauthorized practice of medicine. In a December 2018 bulletin, the Texas Medical Board publicly expressed ?concerns with pharmacy policies being cited as a reason to modify or partially dispense certain prescriptions 5 ?v?v'almart?s MM policy does not apply to chronic conditions, palliative care, or cancer treatment, where a longer course of treatment or larger dosage may be appropriate. The policy also does not affect a subsequent prescription that a prescriber may determine is necessaly after re?evaluating a patient?s condition. CONFIDENTIAL SUBJECT TO FRE 40S 51!. 410 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA confidentlal treatment requested. .JD. .154 HS HAY Gustav W. Eyler September 2019 Page 15 rather than following what state laws mandate." Sea Message from the TMB President: Key Clarifications Regarding Opioid Prescribing (Dec. 2018), 2. Blocking Illegitimate Prescriptions In addition to reducing the volume of pills dispensed for legitimate opioid prescriptions, Walmart is committed to blocking the fills of illegitimate prescriptions. Dispensing controlled substances is a complicated task for a pharmacist, both because there is con?icting guidance on the extent to which a pharmacist is required?or even allowed by law to second-guess the medical judgment of a physician, and because the pharmacist does not have access to complete information about the patient?s medical condition. A pharmacist is not a trained physician, has not examined the patient, and does not have access to the patient?s complete medical records, typically meaning that pharmacists do not have and cannot readily obtain the kind of information physicians rely upon before prescribing opioids to a patient. In addition, drug-seeking patients and ethically- compromis ed prescribers may provide inaccurate information to pharmacists, or the prescriber may refuse to answer a pharmacist?s questions about a prescription, which makes it more difficult for pharmacists to exercise professional judgment in deciding whether to ?ll a prescription. Despite these obstacles, both before and as part of the Opioid Stewardship Initiative, Walmart has implemented a series of escalating checks that empower individual pharmacists to refuse prescriptions in the exercise of their corresponding responsibility and that allow Company? wide blocks ofprescribers of concern. As described in more detail below, these tools also allow Walmart to proactively cooperate with law enforcement. 3. Opioid Analytics Walmart has dedicated significant resources to assemble a team of investigators and data to proactively ?ag and analyze prescribers or pharmacists with concerning records with respect to opioids. This team, working out of Walmart?s Investigative Risk Operations Center (IROC), has developed an algorithm that analyzes the data available to Walmart and ?ags problematic prescribing and dispensing patterns based on red ?ags identified by the DEA, refusals to fill and blanket refusals to ?ll ?led by Walmart pharmacists, and other factors. The team frequently updates the algorithm as it learns more about which factors most closely correspond to problematic prescribing patterns. The IROC team investigates prescribers or pharmacists ?agged by the analytics and refers concerning cases to a team of field investigators around the coturtry. Walmart has created this team of ?eld investigators by hiring former senior law enforcement agents?mostly from the DEA who can access information from Walmart pharmacies and from publicly available sources. If their investigation bears out the concerns ?agged by the CONFIDENTIAL SUBJECT TO FRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf1dent1al treatment requested. WWITCO RR, .155 HS Gustav W. Eyler September 2019 Page lo analytics, the Company takes action that may include a corporate block of the doctor or a referral to law enforcement. There is no legal requirement that Walmart devote the resources to build these analytics, hire these investigative teams, or proactively make referrals to law enforcement. Walmart has done so because of its commitment to being a good corporate citizen and supporting the communities in which it operates. Walmart has invited numerous law enforcement officials to tour the and many have done so, resulting in stronger relationships with law enforcement in the fight against opioid abuse. INalmart?s analytical capabilities are robust and industry?leading relative to its pharmacy peers. Nonetheless, the Company?s capabilities are intrinsically limited by factors beyond the Company?s control, such as information?sharing laws and lack of access to important data. The Company only has access to the narrow set of data permissibly collected by its own pharmacies, and does not have access to most distribution, pres criber, prescription, patient health, dispensing, insurance, state medical board investigation, and other data proprietary to other entities, that could help better identify suspicious prescriptions and prescribers. Policy and legal factors such as prohibitions on the Company?s centralized use of Prescription Drug Monitoring Program (PDMP) data to conduct this type of analysis also limit the Company?s analytic capacities. Additionally, the Company?s relatively small pharmacy market share in mostjurisdictions also limits the information available to the Company to identify suspicious prescribers and prescriptions. Walmart is doing the best it can with the data available to it, but the Company is seeking public policy changes that would allow it to access more data and thereby allow for better? educated judgments regarding a particular pres criber or patient. 4. Refusal-to-Fill Policies Walmart empowers its pharmacists to refuse to fill prescriptions that the pharmacist finds concerning. Based on the presence of certain ?red ?ags" or combinations of red flags, an individual Walmart pharmacist may refuse to fill a particular prescription (known as a ?refusal to fill,? or If a pharmacist has more general concerns about a prescriber?s controlled? substance prescribing practices, the pharmacist may refuse to fill all controlled-substance prescriptions written by that provider (a ?blanket refusal to fill," or And Walmart has established a process for placing a Company?wide prohibition on any Walmart pharmacy filling a controlled-substance prescription written by a given prescriber if that prescriber meets a higher threshold of concern (a ?corporate block"). To Walmart?s knowledge, no other national retail pharmacy has any analogous robust system for centrally identifying and blocking prescribers. To support these measures, Walmart provides guidance to its pharmacists on how to identify, analyze, and resolve red ?ags related to pres cribers, patients, or prescriptions. And when Walmart pharmacists make a refusal?to?fill decision because they cannot, in their professional judgment, dispense the controlled substance, Walmart is committed to supporting those pharmacists? decisions. CONFIDENTIAL SUBJECT TO FRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf 1 entlal treatment requested. MTG 0 RR, D. .155 HS HAY Gustav W. Eyler September 2019 Page 1? Walmart?s analytics tools, described above, help the Company make informed judgments about when to implement a corporate block. Because a corporate block could have serious implications for a prescriber and his or her patients, and because some factors that appear to be red ?ags can have legitimate explanations upon further review, the decision to block a prescriber goes through multiple layers of research and review, a process that proceeds as quickly and fairly as possible. a. Pushhack Against ?Walmart?s Refusal-to-Fill Policies Walmart?s refusal-to-fill policies are designed to support its pharmacists and to help prevent opioid abuse and misuse. However, these refusal?to-fill policies have been heavily criticized by state pharmacy and medical boards, private health care organizations, and pres cribers who argue that Walmart?s pharmacies and pharmacists are impermissibly interfering with the patient?physician relationship by refusing to fill prescriptions from certain prescribers. For example, a recent AMA report and resolution targeted ?Walmart?s corporate block program as an inappropriate prescriber ?blacklist" that impermissibly interferes in the physician?patient relationship. See Report of the AMA Board of Trustees, as temffilesr?E 9?1'efcomm?b?addendum .pdf. Walmart?s corporate block policy has also been opposed by some state medical and pharmacy boards. As discussed above, the Tennessee Board of Pharmacy has strongly opposed the Company?s corporate block policy, even to the point of stating that the policy is unlawful under a state law that makes it a Class A misdemeanor for the ?owner, manager, or operator of a pharmacy to knowingly restrict or interfere with, or knowingly require a protocol or procedure that restricts or interferes with, a pharmacist?s professional duty to counsel with patients and to evaluate the patients? appropriate pharmaceutical needs and the exercise of the pharmacist?s professional judgment as to whether it is appropriate to dispense a legend drug to a patient." Tenn. Code 53? 10-1 12. After Walmart refused to abandon its corporate block policy despite the Tennessee Board of Pharmacy investigation, the Board conducted at least six additional surprise inspections of Walmart pharmacies within a 48-hour period in September 2019. Other prescribers and pharmacy and medical boards have cited similar statutes in other states that they argue prohibit pharmacies (as opposed to pharmacists) from blocking prescription fills. Examples include Texas where a statute says that ?[njotwithstanding any other law, a pharmacist has the arciusfva authority to determine whether or not to dispense a drug," Tex. Occ. Code 551.006 (emphasis added); Illinois, which has a statute that provides authority to take disciplinary action ?for interfering with the professional judgment of a pharmacist by om: ?eet-rises,? 225 Ill. Comp. Stat. Ann. (emphasis added); and Florida, where state law provides that hen validating a prescription, neither a person nor a licensee shall interfere with the exercise of the pharmacist?s independent professional judgment," Fla. Admin. Coder. 64b] 6? 2183 (emphasis added). Additionally, Walmart is currently facing a number of defamation CONFIDENTIAL SUBJECT TO FRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conf1dent1al treatment requested. WWITCO RR, '15? HS HAY Gustav W. Eyler September 2019 Page 18 lawsuits ?led by corporately?blocked prescribers, and the Company and its pharmacists are routinely threatened with defamation lawsuits. is committed to these policies that it believes are making a real difference in the fight against the opioid crisis, despite significant pushback from the medical profession and regulators. 5. Improving Access to Opioid Disposal Options, Overdose Reversal Medications, and Opioid Abuse Education Walmart has adopted a series of policies aimed at increasing access to important public resources that can help address the opioid crisis, including: Providing Free and Accessible Disposal Solutions. Walmart is the first national pharmacy chain to provide a free, easy-to-use disposal solution, DisposeRa, in all of its pharmacies nationwide. As described by its supplier, DisposeRx is a proprietary powder that converts unused opioids to a non?divertible and biodegradable gel that can then be safely disposed of in the trash. Walmart also partners with the DEA in connection with medication take?back events and has instituted a pilot program in which certain pharmacies have in?store medication return kiosks that allow customers to return unused controlled substances directly to the pharmacy. Providing Overdose Reversal Medication. Walmart is committed to having the overdose medication naloaone behind pharmacy counters at its stores and dispensing the medication upon request, where allowed by state law. As an additional step, Walmart pharmacists provide naloxone recommendations for patients who might be at risk for overdose, in alignment with CDC guidelines. Supporting and Providing Education to Customers and Youth. Walmart pharmacy customers receive an opioid safety information brochure when picking up a new acute opioid prescription, and Walmart pharmacists counsel patients in line with the CDC guidelines on pain management. Walmart helps sponsor youth? based ctu'riculums on the risks associated with prescription medication abuse, including Prescription for Life with EverFi and programming through The Mark Wahlberg Youth Foundation. In addition, Walmart plans to continue its collaboration with Community of Anti-Drug Coalitions of America, including developing training for community groups and first responders on administering naloxone. Supporting and Providing Education to Pharmacists and Employees. Walmart supports its pharmacists by providing training in pain management as well as a CONFIDENTIAL SUBJECT TO TIRE 4G3 SI. 4112} AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. .JD. .153 .1111}; HS HAY Gustav W. Eyler September 2019 Page 19 digital Opioid Toolkit, which includes links to educational information. training materials, and guidance on pharnracy operations. Walmart pharnracists have provided education to their fellow Walmart enrployees related to opioid safety and potential misuse. C. ?Walmart?s Collaboration with Law Enforcement Walmart has a long and proud history of collaborating with federal. state, and local law enforcement on a wide variety of criminal investigations and providing both proactive and reactive assistance. Walmart annually responds to over 8,000 law enforcement requests for assistance on a broad array of investigations. The leads developed from Walmart?s analytical tools and field investigations have provided law enforcement with significant assistance in cases across the country ranging from opioids to rescuing kidnapping victims to bombing investigations. Specifically regarding controlled substances diversion, over the years. Walmart has provided substantial and escalating cooperation to law enforcement agencies and has identified suspected wrongdoing by prescribers, customers, and employees. Walmart?s culture of law enforcement collaboration manifested itself in late 201 8 with the creation of a team of former federal agents specifically designed to assist law enforcement with controlled substance investigations. This Global Investigations External Diversion Team has assisted more than 80 different federal. state, and local law enforcement agencies over the last nine months, providing detailed, actionable information, and referring specific incidents to law enforcement for possible prosecution. This proactive cooperation has resulted in nunrerous arrests with scores of investigations pending. The External Diversion Team engages in regular outreach to law enforcement in Walmart?s communities and provides presentations on Walmart?s analytical capabilities and its willingness to assist in controlled substance investigations and the identification ofbad actors. As mentioned above, Walmart has developed its industry leading IROC, a proprietary investigative tool that, among other things. can collect and analyze prescription data from Walmart pharmacies across the country. Walmart us es IROC data as part of the prescriber assessments that the External Diversion Team provides to law enforcement agencies. Walmart has given presentations on capabilities to dozens of federal. state. and local law enforcement agencies, including several US. Attorneys, state Attorneys General, and DEA officials. One state?s Attorney General, after visiting IROC and learning about its capabilities, was so impressed that he encouraged other state Attorneys General to do the sanre. By sharing access to Walmart?s analytics tools with law enforcement. Walmart has materially helped the fight against the opioid crisis. Since December 2018. Walmart has shared at least 98 prescriber assessments to assist with ongoing investigations, and in 2019 alone. Walmart has forwarded at least 104 leads on suspicious prescribers to DEA. The ICompany?s investigative team understands from several DEA officials and field agents that these leads are very useful to CONFIDENTIAL SUBJECT TO TIRE 40S SI. 4 l0 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA confrdentral treatment requested. WWITCO RR. .JD. .159 JOIN HS 111.0111" Gustav W. Eyler September 2019 Page 20 the Agency. Indeed. in early 2019. DEA officials sought support to create a dedicated. secure, online portal for the DEA to efficiently receive and vet Walmart?s opioid prescriber investigation leads. On July 28, the DEA officially turned on the new portal, and the Company has submitted at least 28 leads to the DEA through the portal injust the last two months. proactive and actionable cooperation has helped law enforcement produce numerous concrete victories in the fight against opioid diversion and misuse. In the last sixteen months alone, such examples include, but are by no means limited to: I ?Western District of Arkansas: Walmart assisted in the federal prosecutions of two prescribers in Arkansas. In November 2018, Walmart pharmacists provided information that helped establish probable cause to execute search warrants on the prescribers. ER-"almart continued to provide information and assistance throughout the investigation. On September 11, 2019, one of the prescribers pleaded guilty to illegally distributing controlled substances and a local news station identified ER-"almart pharmacists as among those who raised the alarm about his prescribing practices. - ?Western District of Virginia: On March 2. 2019. Walmart provided DEA investigators with detailed prescription data and a prescriber assessment regarding a prescriber in Virginia. Walmart also facilitated interviews with several of its pharmacists who could testify against the prescriber at trial. information assisted in the prescriberis conviction on May 9, 2019, for 859 counts of illegally prescribing controlled substances. - Eastern District of Tennessee: In March 2019. Walmart provided information resulting from an internal investigation to and DEA to refer a pres criber for investigation. On August 13, 2019. the prescriber pleaded guilty to one count ofmaking a false statement relating to a health care matter that stemmed from writing illegal opioid prescriptions. '5 - Middle District of Tennessee: Walmart conducted an investigation of a Tennessee prescriber for his prescribing habits, and in May 2019 shared that information with state and federal law enforcement. On May 2019. the prescriber was arrested on charges of illegally prescribing opioids. Following his arrest, Walmart provided law enforcement a Prescriber Assessment and facilitated interviews with Walmart pharmacists who could testify against the prescriber if the case were to proceed to trial. I Middle District of Tennessee: On July 9. 2019. Walmart provided the Tennessee Bureau of Investigation and the US. Attorney?s Office with a Law Enforcement Executive Summary and Prescriber Assessment for a prescriber in Tennessee to assist law DOJ Office of Public Affairs, Second Region Prescription Opioid oi?ee Tokedou-?e Res-oin- in Charges Againsr ?3 Individuois, if [Sep. 24, 2019}, 11 nip econd?appalachia n-region-prescription?opioid? strikefo rc e?ta ked own? res ul ts? charges?against?lii. CONFIDENTIAL SUBJECT TO FRE 40S 61!. 410 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1a1 treatment requested. .JD. .1323 Gustav Septem Page 21 .11'lh'liF-i HAY W. Eyler ber 22'. 2019 enforcement with their investigation and prosecution. The prescriber was previously arrested on April 2019. for seven counts of illegally prescribing Schedule II controlled substances. Middle District of Georgia: Walmart is assisting with the prosecution of a Georgia prescriber by providing prescriber analytic data and facilitating the selection of a pharmacist to testify at his upcoming trial. Southern District of Georgia: Walmart is assisting with the prosecution of a Georgia prescriber by providing prescriber analytic data and facilitating the selection of a pharmacist to testify at his upcoming trial starting on October 2, 2019. Walmart is providing information and attending meetings to assist the ongoing investigation by the FBI Healthcare Fraud Task Force and the Office of the Attorney General into a fraudulent prescription ring linked to prescribers in the New York, New Jersey. and Maryland. Nevada: Walmart is providing CCTV footage, prescription copies, and facilitating pharmacist interviews to assist in the investigation of a large prescription fraud ring operating in Las Vegas. Middle District Walmart pharmacist testified in the criminal trial of a prescriber in The pharmacist testified regarding the pharmacist?s corresponding responsibility, the prescriber?s prescriptions, and the pharmacist?s decision to refuse to fill. The prescriber was convicted on June 4, 2018. ?Western District of 1Virginia: On June 19. 2018. a Walmart pharmacist testified in the criminal trial of a prescriber in Virginia. The pharmacist testified regarding his experience with the prescriber?s prescription writing habits. The prescriber was convicted on August 1. 2018. District of ?'Tyoming: On November 29. 201 8, to assistwith the prosecution of a Wyoming prescriber, a Walmart pharmacy manager met with the federal prosecution team and was prepared to provide expert witness testimony on the pharmacy industry, as well as his experience with the prescriber. The pres criber was convicted on May 24, 2019. While most DEA ?eld offices and line agents. as well as state and federal pros ecutors. are eager to collaborate with Walmart and grateful for the information, some members of the Working Group appear to be unwilling to benefit front the assistance Walmart could provide. Walmart has repeatedly offered to work collaboratively with the ?W?orking Group and provide the ICompany?s data so that the orking Group Districts can bring cases against problematic prescribers. While that offer remains open, some Working Group members still refuse to accept the assistance. For CONFIDENTIAL SUBJECT TO FRE 40S 61!. 410 AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA conf1dent1al treatment requested. .JD. .1 1" 1 HS HAY W. Eyler Septentber 2019 Page 22 exantple, a DEA agent in the Dallas area recently called one of Walmart?s investigators and said that his supervisor at DEA does not want to receive any ntore inforntation front the Contpany ?because it is Walntart," and advised ltint to ?nd another way to obtain the relevant inforntation. Despite tltis, Walmart remains contntitted to assisting DOJ and the DEA itt any of their pres criber investigations. IV. Conclusion After nearly three years of investigation by the Departntent, the Working Group be able to give Walntart an explanation of its case?a courtesy routinely extended by Departntent attorneys nationwide earlier itt even larger investigations. The Company also is deeply concerned the threatened indictntent of Mr. Nelson and the involventent of a Working Group ntentber. Accordingly, Walmart is requesting a presentation of the government?s case before the tolling agreentent expires on October 25, 2019. In light of the concerns raised above, we do not believe it is appropriate to continue voluntarily answering interrogatoty-style questions posed by the Working Group or continue producing under the Ontnibtts Subpoena until these issues are resolved. The Contpany also requests an opportunity to discuss with you the troubling developntents itt EDTX and the concerns they raise regarding the dentands of the Working Group. If the Working Group declines Walmart?s request for a presentation of its case, Walmart forntally seeks a nteeting with senior leadership of the Departntent before the Working Group is authorized to file a Motion to Contpel related to the Omnibus Subpoena or file any civil Contplaint against the Contpany. Very ttul yours, JONES DAY WW Karen P. Hewitt cc: David Morrell, Deputy Assistant Attorney General Josh Russ, Civil Eastern District of Texas Josh Fowkes, onsunter Protection Branch James l-Iarlow, Consunter Protection Branch Natalie Waites, Civil Fraud Section Harry IvIatz, NDDS CONFIDENTIAL SUBJECT TO TIRE 403 SI. 4113' AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 ?552{b}. FOIA conftdenttal treatment requested. WWITCO RR, .112 JON HS HAY Gustav W. Eyler September 2019 Page 23 Kirt Marsh, NDDS Lena Watkins, NDDS Kevin Traskos, Civil Chief AUSA, District of Colorado Amanda Rocque, AUSA, District of Colorado Michael Anders on, AUSA, Eastern District of North Carolina Elliott Schachner, AUSA, Eastern District of New York Rand}F Harwell, Civil Middle District ofFlorida CONFIDENTIAL SUBJECT TO FRE 4G3 Si 411:} AND FRCP ll FOR PURPOSES OF SETTLEMENT DISCUSSIONS ONLY This document contains information exempt from disclosure under FOIA, 5 U.S.C. ?552{b}. FOIA confidential treatment requested. WWITCORR .JD. .1 3,3