Teva Reaches Preliminary Settlement of $4.25 Billion Over Opioids

Teva Pharmaceuticals, one of the nation’s largest manufacturers of generic opioids, announced an agreement in principle with approximately 2,500 local governments, states and tribes on the company’s role in the deadly, ongoing opioid epidemic.

The deal — valued at up to $4.25 billion — came after a series of fierce court cases and previous individual-case settlements across the country last year.

Although much less well known, Teva, an Israeli company, and its subsidiaries produced far more prescription opioids than big-name opioid manufacturers like Johnson & Johnson during the peak years of the crisis. The production of both generic and branded pain relievers dwarfed the production of Purdue Pharma, maker of OxyContin, the drug most directly linked to triggering an avalanche of overdoses and deaths.

Under the agreement, Teva would make disbursements over a 13-year period targeted to state, local and tribal programs to help alleviate the opioid crisis, which has only deepened during the coronavirus pandemic. The total of $4.25 billion included nearly $550 million in settlements the company had already reached when the trials in San Francisco, Florida, West Virginia, Texas, Louisiana and Rhode Island began.

States and localities may choose to accept a portion of their payouts in the form of overdose-reversal drugs instead of cash.

The deal was negotiated by representatives for about a dozen attorneys general. “Today’s announcement demonstrates once again that those responsible for this tragic problem will be held accountable and that help will be available to those affected by the opioid epidemic,” said Tom Miller, the Iowa Attorney General, whose office was involved in the negotiations statement.

Teva said in a statement, “While the agreement will not include an admission of wrongdoing, it remains in our best interests to move on from these cases and remain focused on the patients we serve every day.”

People close to the talks said about 10 to 12 percent of the money would go toward fees for attorneys filing cases against the company beginning in 2013.

In 2016, Teva acquired Actavis, a generics unit of Allergan. In order for Teva’s deal to go through, Allergan must also reach settlements with these plaintiffs. Lawyers familiar with negotiations said they expected an announcement soon.

The deal is also subject to an overwhelming majority of state, local and tribal governments voting in favor of it.

Advocates for an executive committee that negotiates for local governments urged everyone to support the hard-won accord: “We encourage all these groups to sign this agreement so that these resources can get into the hands of those who need them as quickly as possible.” ‘ they said in a statement.

While that outcome seems likely, one participating state among the dozens that negotiated the terms has yet to sign: New York, and Nassau and Suffolk counties, which prevailed in a civil court case against Teva last December. In the shadow of a second phase of this process to determine financial remedies, New York is still in talks with the company, a spokeswoman for the New York Attorney General’s office said.

Getting an acceptable offer from Teva has been a particularly protracted struggle for the states, tribes, and localities that have filed lawsuits against it. For example, while Purdue Pharma has often been associated with over-the-top and misleading marketing of its brand-name drugs to physicians, generic-drug makers do not have formal sales pitches with them. Teva claimed that it does not market its opioids to physicians.

One of Teva’s first settlement offers of 2019 consisted almost entirely of drugs, along with a small amount of cash. While Johnson & Johnson and the three drug distributors who also participated in that early bid reached a settlement two years later, Teva continued the litigation.

But in December 2020, the Senate Finance Committee released findings that were particularly critical of Teva, among other manufacturers, for the millions of dollars it paid to tax-exempt groups that advocate for lawmakers and others and for better patient access pushed for painkillers. In court, the plaintiffs said that Teva, which gained a dominant position in the generics market by acquiring smaller companies, ignored red flags such as oversized pill orders.

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