Pharmaceutical company Teva has agreed in principle to pay $4.25 billion after reaching a nationwide settlement with multiple states and local governments over its alleged role in the U.S. opioid crisis.
The Israeli-based pharma giant on July 26 announced the agreement, which is set to end thousands of lawsuits filed against the company.
The announcement came ahead of the company’s earnings results.
Drug manufacturer Teva makes Actiq and Fentora, both of which are branded fentanyl products and used to treat breakthrough pain in adults who have cancer. It also makes a number of generic opioids including oxycodone which is used to treat moderate to severe pain.
Both drugs are highly addictive and Teva was one of the biggest producers of opioid painkillers during the height of the opioid epidemic.
The settlement is part of an ongoing effort by states to hold opioid manufacturers and distributors accountable for their alleged role in the opioid crisis, with overdose deaths reportedly costing the United States at least $1 trillion a year, according to a bipartisan congressional report released in February.
The United States had alleged that Teva had “promoted potent rapid-onset fentanyl products for use by non-cancer patients,” and engaged in deceptive marketing of opioids while downplaying the risks of addiction, and overstating their benefits. They also claimed that Teva, along with its distributor, Anda, had failed to comply with suspicious order monitoring requirements.
According to the company, the key financial terms agreed upon in the settlement will see $4.25 billion primarily go to states and local governments involved in the settlement, pending approval by a sufficient number of plaintiffs.
‘Costly Legacy Opioids Litigation’
Teva will also pay approximately $100 million to Native American tribes and pay attorneys fees incurred by the states, local governments, and tribes over the next 13 years.
The final figure also includes $1.2 billion worth of generic Narcan, a life-saving medication that can reverse the effects of opioids, which would be supplied over the next 10 years or additional cash in lieu of the product, at a value of 20 percent of the drug’s list price, which is $240 million.
Teva CEO Kare Schultz said the pharma giant 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.”
Despite coming to an agreement in principle, Teva stopped short of admitting to its alleged role in the opioid epidemic.
“While the agreement will include no admission of wrongdoing, it remains in our best interest to put these cases behind us and continue to focus on the patients we serve every day,” the company said.
Teva has already agreed to settlements with West Virginia, Texas, Florida, Rhode Island, and Louisiana.
In December, a New York jury found Teva responsible for contributing to the state’s opioid crisis. New York was not included in Tuesday’s settlement as the company is engaged in ongoing settlement negotiations with city officials.
Other than New York, Teva said it has no pending trials for the remainder of the year.
‘Another Major Step’
Teva acquired opioid manufacturer Allergan in 2016, and Teva noted that the agreement is also “contingent upon Teva reaching an agreement with Allergan with respect to any indemnification obligations, and Allergan reaching a nationwide opioids settlement.”
California Attorney General Rob Bonta, whose state was among those who filed a lawsuit against the drug maker, praised the settlement as “another major step toward addressing the opioid crisis and healing our communities.”
“Nothing can undo the harm opioids makers like Teva have inflicted on families across the country or the lives lost to the opioid epidemic,” Bonta said in a statement. “But this agreement will provide much-needed relief for its victims and importantly, critical funds for overdose prevention and opioid addiction disorder treatment.”
Data from the nonprofit group Families Against Fentanyl published in February shows that fatalities from fentanyl have more than doubled in 30 states across the United States in just 24 months, while 15 states have seen fatalities more than triple.