Teva Pharmaceutical Industries Ltd. said it had agreed to pay more than $4 billion to resolve thousands of lawsuits filed against the drugmaker by state and local governments over its highly addictive opioid painkillers.
The Israeli drugmaker said Tuesday it reached a tentative deal to pay $3 billion in cash and $1.2 billion in donated overdose-fighting drug Narcan to resolve the claims. Native American tribes would also receive $100 million. The company said the total included $650 million it’s had committed in previous settlements. The deal would be paid out over 13 years, if finalized.
Teva Chief Executive Officer Kare Schultz said in a statement the company was “pleased to have reached a nationwide agreement in principle, pending participation by states and subdivisions, to resolve the majority of our costly legacy opioids litigation, and importantly, make critical medicines available to those most impacted by the U.S. opioid epidemic.”
The deal is designed to wipe out the company’s exposure to allegations some of its units wrongfully marketed its Actiq and Fentora opioid-based painkillers to rack up billions in profits. It also generates billions in treatment funds for the governments dealing with an ongoing public-health crisis tied to the medications.
More than 3,000 state, city, county and tribal governments in the U.S. sued Teva and other drugmakers over the havoc opioids wrought on their communities. The settlement comes as part of a consolidated opioid litigation before a federal judge in Cleveland that also produced a $26 billion accord covering Johnson & Johnson and the U.S.' three largest drug distributors.
The deal was a “direct result of the years of hard work by community leaders, first responders, and” the governments’ lawyers “who have dedicated their efforts to gathering the resources necessary to battle the opioid epidemic across the country for years ahead,” said the plaintiffs’ attorneys, Joe Rice, Jayne Conroy and Paul Farrell, who have led the consolidated litigation.
Teva’s settlement, which doesn’t include an admission of wrongdoing, is contingent upon Abbvie’s Allergan unit reaching a similar nationwide opioid deal, Teva officials said in the release. Teva paid more than $40 billion for Allergan’s generic drugs business in 2016. The companies have an indemnity agreement requiring Allergan to cover legal costs tied to opioid claims prior to the purchase of the generics business.
State and local governments that have sued Teva over opioids now must decide whether to accept the cash and the Narcan-donation portions of the settlement, according to the company’s release. Teva — which is dealing with more than $20 billion in debt — had been pushing the idea of settling the cases for a small cash contribution and an overwhelming donation of Narcan, used on many American streets to save overdosed opioid victims.
Teva already has reached some settlements with states that are included in Tuesday’s accord. The company agreed in March to pay $177 million in cash and donate $84 million in drugs to the state of Florida. The month before, Teva agreed to pay $150 million in cash and $75 million worth of drugs in a deal with Texas.
Still, Teva is awaiting a ruling from a New York state judge on how much the company may have to hand over to two Long Island counties and other New York municipalities for its wrongful marketing of opioid drugs in those areas. The company said it’s currently negotiating with New York officials to try and settle the cases.
The deal “shows that high-level litigation is a vehicle to ensure that companies like Teva are held accountable for their actions,” Hunter Shkolnik, one of the lawyers in the Long Island case, said in a statement. The accord also will provide “critical resources to all states and all communities that have been ravished by this epidemic,” said Paul Geller, another plaintiffs’ lawyer involved in the opioid litigation.
The consolidated case in Cleveland is In Re National Prescription Opioid Litigation, 17-md-2804, U.S. District Court, Northern District of Ohio (Cleveland).
