Teva Pharmaceuticals, the US subsidiary of Israel’s Teva Pharmaceutical Industries, has reached an agreement with the attorney general of Louisiana to pay $15 million to settle the state’s opioid-related claims against the company and provide an additional donation of medicines that aid in opioid addiction and recovery, valued at $3 million.
The legal settlement was announced on Tuesday and finalization is contingent on confirmation from the state by November 2, Teva indicated in a statement. Teva’s shares were up 6 percent to $9.81 following the announcement.
Under the terms of the deal, Teva will pay the $15 million settlement over a period of 18 years.
The company is facing legal proceedings in a number of US states including New York and California amid ongoing claims that Teva and other drugmakers like Johnson & Johnson, Endo International and AbbVie’s Allergan engaged in misleading marketing of opioid drugs and downplayed the risks of addiction.
The state of Louisiana claimed that Teva and other pharmaceutical companies “engaged in fraudulent marketing regarding the risks and benefits of prescription opioids, which helped fuel Louisiana’s opioid epidemic.”
Drugmakers and distributors are facing thousands of claims by state and local authorities that they helped fuel the addiction and overdose epidemic in the US, a health crisis that has claimed the lives of close to 500,000 Americans since 1999, according to the Centers for Disease Control and Prevention (CDC).
Johnson & Johnson and three major US drug distribution companies are proceeding with a $26 billion deal to settle these claims. Teva was initially part of the group of drugmakers that, in 2019, offered a settlement valued at $48 billion combined to settle. The company offered $250 million in cash and $23 billion in free drugs.
But the $26 billion national deal was struck without Teva, which is now navigating the lawsuits as they come. This is because the company did not offer as much cash, in part because of a debt load of over $20 billion, said Teva CEO Kåre Schultz in July.
“I think it’s fair to say the cash amount and therefore, the immediate interest from the plaintiff lawyers has been higher in the four companies than in our offer,” Schultz told analysts during an earnings call cited by Fierce Pharma. “That’s probably why they have decided to take the other four companies first and then move on to ours second.”
Schultz indicated that Teva was “optimistic” it would reach its own deal in the coming year, according to the report.
In its statement on Tuesday regarding the Louisiana deal, Teva said it “continues to negotiate a national settlement and remains open in parallel to pursuing opportunities with individual states such as the deal announced today, as long as it is consistent with the nationwide approach.”
“Teva believes that today’s settlement with Louisiana is a positive step forward in getting life-saving medicines to people suffering from opioid addiction,” the company added.
Teva has faced other legal troubles in the US. Last August, the US sued Teva for artificially raising the price of Copaxone, an immunomodulator medication used to treat multiple sclerosis, and other drugs.
During a 19-month period from 2013 to 2015, Teva was said to have significantly raised prices on around 112 generic drugs and colluded on at least 86 other drugs, the US said in the suit. Some of the increases were more than 1,000%.
Earlier this year, European Union regulators announced that they opened a formal investigation into Teva for possible antitrust violations.
Agencies contributed to this report.