Israeli generic drugmaker Teva Pharmaceuticals Industries said that its US affiliate has finalized the terms of a proposed nationwide settlement to resolve $4.25 billion in opioid-related claims.
The settlement involves a flurry of lawsuits against Teva by multiple US states and local governments over the generic drugmaker giant’s marketing and sales of opioids, a class of drugs to reduce pain.
Starting in 2017, Teva has been battling legal proceedings in US states, including Louisiana, Florida, California, Texas and New York, over claims that the drugmaker engaged in misleading marketing of opioid drugs and downplayed the risks of addiction.
The opioid crisis, which has led to more than 500,000 deaths over 20 years in the US, has triggered thousands of lawsuits against drugmakers, distributors and pharmacies from victims as well as cities, counties and states. Other drugmakers include Johnson & Johnson, Endo International and Abbvie’s Allergan. Abbvie announced separately that it has agreed to the nationwide settlement, which involves paying up to $2.37 billion to resolve a dispute related to claims of Allergan’s generic opioid business that Abbvie divested to Teva in 2016.
Finalizing the “documentation” of the proposed nationwide settlement paves the way for the “sign-on process for states,” Teva said in a statement.
“Given the high participation rate in other nationwide opioids settlements — and Teva’s settlements with Texas, Florida, Louisiana, Rhode Island, West Virginia, San Francisco and New York — we remain optimistic that a high participation rate in this nationwide settlement will be achieved, enabling us to put these cases behind us and continue to focus on the patients we serve every day,” Teva said.
Sabina Levy, head of research at Leader Capital Markets, said the announcement marks a “significant, but expected milestone,” which hopefully will bring the opioid-related litigation saga to an end.
“The expectation is that a significant percentage of the plaintiffs will sign the settlement for Teva to be able to close the litigation process,” Levy told The Times of Israel. “Until now there was a high level of uncertainty and investors did not want to touch Teva stock.”
With the clouds of uncertainty dissipating, “investors are likely to go back and analyze exposure to the stock based solely on Teva’s performance,” she added.
Throughout the legal proceedings related to the opioid-related allegations, neither Teva nor Abbvie admitted to any wrongdoing.
“The finalized agreements with Allergan and Teva are significant steps forward in our continued efforts to hold those responsible for the opioid epidemic accountable and obtain the necessary resources to battle its catastrophic effects,” read a joint statement by attorneys representing US states and local governments. “While our efforts thus far have obtained nearly $50 billion for communities nationwide, our work is far from finished, and we will continue to work to hold those responsible for this epidemic fully accountable.”
Earlier this month, US pharmacy chains CVS Health and Walgreens agreed to preliminary settlements to pay a total of $10 billion in opioid claims to resolve lawsuits from US states, cities and tribes. Death caused by drug overdose involving opioids, including prescription pills and heroin, increased 38% during the coronavirus pandemic in 2020, according to data by the US Centers for Disease Control and Prevention.
Teva’s announcement on the progress of the proposed opioid settlement comes as the generic drugmaker announced the appointment of Richard Francis as its new CEO replacing Kåre Schultz after a five-year tenure. Previously, Francis served five years as CEO of Sandoz and headed Novartis’ generic drug business. Francis, who was also a senior executive at Biogen, will take over the role as Teva’s CEO and president effective January 1, 2023.
“Under Kåre’s leadership, we have stabilized the business and undergone a significant operational transformation across our international footprint,” said Sol J. Barer, chairman of Teva’s board of directors. “The Company is now well positioned for an exciting future and, by leveraging Richard’s compelling track record of growing businesses in the life sciences, biologics and generic drug sectors, his entrepreneurial and pragmatic leadership style and emphasis on a collaborative and innovative culture, the Board and I are confident that Teva will build on this solid foundation.”
AFP contributed to this report.