Teva Pharmaceutical, which is based in Israel, said the proposed agreement will include no admission of wrongdoing.
Photo: Kobi Wolf/Bloomberg News
Teva Pharmaceutical Industries Ltd.
said it reached a national settlement agreement worth up to $4.25 billion to resolve thousands of lawsuits over its alleged role in the opioid crisis.
The proposed settlement is the latest move by a company seeking to resolve the costly litigation.
Under the terms, the Israeli generic drugmaker said Tuesday it would pay more than $3 billion over the next 13 years to states and local governments, plus another $100 million to Native American tribes over the period.
The total sum covers the company’s previous settlements of lawsuits with governments, Teva said. It also said it would supply up to $1.2 billion of its generic version of opioid overdose reversal drug Narcan over 10 years.
States, local governments and tribes still need to sign off on the deal. Not enough governments signed onto a previous national settlement proposal from Teva for it to take effect.
Teva said the proposed agreement will include no admission of wrongdoing, and that it “remains in our best interest to put these cases behind us and continue to focus on the patients we serve every day.”
“This latest step will provide additional long overdue support to those on the front line in thousands of communities who will strongly benefit from the influx of financial and medical resources as they continue their lifesaving work,” said the committee of lawyers representing the counties, cities and Native American tribes.
Teva’s depositary receipts jumped more than 19% to $8.50 in after-hours trading Tuesday following the announcement.
Teva and other pharmaceutical companies, drug wholesalers and retail pharmacies have been embroiled in litigation with cities, counties, states and Native American tribes accusing them of contributing to the U.S. opioid epidemic.
The lawsuits brought by the governments broadly allege that Teva and other drug manufacturers pushed opioid painkillers for widespread use without properly warning of the risks of addiction.
State attorneys general who negotiated the settlement, including California, Tennessee and North Carolina, said the agreement would help those affected by the opioid epidemic.
Tennessee Attorney General Herbert Slatery said the settlement is a “major step in holding opioid manufacturers accountable.”
North Carolina Attorney General Josh Stein, who joined other attorneys general in leading negotiations, said a final settlement “remains contingent on agreement on critical business practice changes and transparency requirements.”
Paul Geller, a Florida lawyer who represents several cities and counties, said the settlement would provide much-needed funding and Narcan to communities seeking to help people with opioid addictions.
Like the other companies facing lawsuits, Teva has been involved in settlement talks for more than two years with the aim of resolving the litigation.
The company, the world’s biggest seller of lower-priced generic versions of prescription medicines, had roughly $16 billion in worldwide sales last year.
In 2019, Teva said it had reached an agreement in principle with governments including North Carolina, Pennsylvania, Tennessee and Texas to provide $23 billion in drugs to treat opioid addiction and pay $250 million over a decade.
Companies including Johnson & Johnson have reached settlement agreements with a number of states, cities and counties and Native American tribes in recent months, as both sides seek to avoid costly trials.
Other pharmaceutical companies including Purdue Pharma LP and Mallinckrodt PLC have sought bankruptcy protection to resolve opioid liabilities, filing for chapter 11 with settlements in place with most states.
Endo International PLC is weighing filing for chapter 11 without first reaching agreements with junior creditors and opioid plaintiffs, The Wall Street Journal has reported.
Litigation is continuing around the country against companies in the opioid supply chain, including an Ohio trial where CVS Health Corp., Walgreens Boots Alliance Inc. and Walmart Inc. were found liable.
Another case, in federal court in San Francisco, against Walgreens is awaiting a decision. Teva was previously a defendant in the case until reaching a settlement in July.
Teva’s new national agreement is similar to previous state litigation that led to settlements with drug distributors AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp.
Under the proposed settlement, the settlement money and medical resources, such as Narcan, would be distributed based on factors including population and proportionate share of the opioid epidemic impact as measured by overdose deaths and opioid use disorder diagnoses, according to the lawyers for the states.
In lieu of receiving the generic version of Narcan, states and local governments could receive additional cash from Teva, valued at 20% of the drug’s list price, according to the company.
In addition to requiring signoff from governments, Teva said its settlement depends on drugmaker AbbVie Inc. reaching its own national opioid agreement and also an indemnification deal with Teva on dividing up the liabilities.
AbbVie bought drugmaker Allergan in 2020, four years after Teva had bought Allergan’s generic-drug business.
An AbbVie spokesman didn’t immediately respond to a request for comment.
—Denny Jacob contributed to this article.
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