In late July 2022, Teva Pharmaceutical Industries announced a $4.25 billion proposed nationwide settlement to resolve thousands of lawsuits over its alleged role in the United States opioid epidemic. Israel-based Teva would pay state and local governments up to $3.7 billion in cash over a thirteen year period, plus a $1.2 billion contribution of Naloxone, an opioid overdose reversal drug.
The proposed settlement would also allow state and local governments to opt for additional cash instead of an allotment of Naloxone, at a value of 20% of the drug’s list price. Past negotiations have bottlenecked due to Teva’s insistence on including drugs as a major component of its opioid settlements.
The proposed $4.25 billion in cash includes amounts Teva has already agreed to pay under settlements with individual states, funds for participating states and subdivisions, and the $240 million of cash in lieu of product (the $1.2 billion in generic naloxone included in the settlement).
These negotiations are led by the following states: California, Illinois, Iowa, Massachusetts, New York, North Carolina, Pennsylvania, Tennessee, Texas, Vermont, Virginia, and Wisconsin. While New York is among the 12 states that negotiated this proposed settlement framework, Teva and New York are still engaged in further negotiations.
Prior Proposal
In 2019, Teva proposed to settle its nationwide opioid liability for $250 million in cash and $23 billion in contributed medicines. The proposal was rejected by state and local governments due to the small amount of cash.
Contingent on Allergan Settlement
Teva’s settlement is contingent on settlements made by Allergan, as Teva acquired Allergan’s generic drugs business (Actavis) in 2016. For this $4.25 billion settlement to take effect, Allergan must reach its own nationwide opioid settlement. From there, the two companies must then settle a dispute over the amount Allergan owes Teva for claims filed prior to the 2016 sale.
Several days after Teva announced the proposed settlement, Allergan announced the companion proposed settlement. While the specifics are still being ironed out, the Allergan proposed settlement is north of $2 billion.
Additional Contingencies
The Teva settlement will also not be finalized unless a sufficient number of state and local governments agree to accept the terms. Teva has already reached settlements with West Virginia, Texas, Florida, Rhode Island, and Louisiana, the value of which are included in the overall settlement figure.
New York State has already noted it will not participate in the settlement and will continue to seek a judgment against Teva. This follows a December ruling by a New York jury that found Teva responsible for the state’s opioid crisis.
Reactions
Iowa Attorney General Tom Miller was a lead negotiator for the states and called the settlement “another major step in addressing the opioids crisis,” noting that the settlement funds could “make a significant difference in preventing fatal overdoses and treating opioid addiction disorder.”
Teva said in a statement, “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.”