Teva proposes $15 billion deal to settle opioid claims
The proposed settlement comes only days ahead of a landmark federal trial in Cleveland, Ohio, against the company and five drug distributors.
By EYTAN HALON, REUTERSThe CEO of Teva Pharmaceutical Industries Kare Schultz speaks during a news conference to discuss the company's 2019 outlooks in Tel Aviv, Israel February 19, 2019(photo credit: REUTERS/AMIR COHEN)
Leading Israeli drugmaker Teva Pharmaceutical Industries has proposed to give away over $15 billion of generic drugs to settle claims related to its alleged liability in the US opioid crisis, Bloomberg reported on Wednesday.The proposed settlement, which would be carried out over 10 years and include drugs to tackle opioid overdoses, comes only days ahead of a landmark federal trial in Cleveland against Teva and five drug distributors.Scheduled to commence on Monday, the trial follows proceedings brought by two Ohio counties and combines 2,600 claims submitted by state, local and tribal governments, hospitals and other entities to courts across the country.Teva reportedly opted to propose a “drugs-for-dismissal” settlement offer due to its current debt load, which “leaves little free cash flow for an opioid settlement.” The company, currently the subject of wholesale restructuring and ambitious cost-cutting measures amid dropping revenues, reported debts exceeding $28.7b. as of June 30.Citing people familiar with the discussions, The Wall Street Journal reported on Tuesday that three drug distributors also slated to be defendants in the trial are in talks with state and local governments to settle thousands of opioid lawsuits for $18b.McKesson Corp., AmerisourceBergen Corp. and Cardinal Health would collectively pay the amount over 18 years under the deal currently on the table, according to the Journal. Johnson & Johnson is also involved in the discussions to contribute additional money, the daily reported.Later on Tuesday, Bloomberg reported that Johnson & Johnson had offered to pay $4b. to settle claims related to the opioid epidemic.Earlier this month, J&J said it would pay $20.4 million to settle claims by the two Ohio counties, becoming the fourth drugmaker to settle claims ahead of the Federal Court trial. “As previously stated, we remain open to viable options to resolve these cases, including through settlement,” it said in a statement on Tuesday.In May, Teva reached an agreement with the State of Oklahoma to resolve the state’s claims against the company. Teva said that the settlement, a one-time payment of $85 million to the state, “does not establish any wrongdoing on the part of the company,” and that it had not contributed to opioid abuse in Oklahoma in any way.“Teva recognizes the devastating impact to communities across the US as a result of illegal drug use and the misuse and abuse of opioids that are available legally by prescription,” the company said in a statement. “Teva continues to advocate for collaborative solutions throughout the country.”Since 1999, approximately 400,000 Americans have died from an opioid overdose, including prescription and illicit opioids.According to government health figures, around 68% of more than 70,000 drug overdose deaths in 2017 involved an opioid. The number of overdose deaths involving both prescription and illicit opioids was six times higher than in 1999.A new report published on Tuesday by the Society of Actuaries revealed that the epidemic has cost the US economy at least $631b. since 2015. Nearly one-third ($205b.) of the economic burden was attributable to excess healthcare spending.Mortality costs, driven by lost lifetime earnings for those who died prematurely, accounted for 40% ($253b.) of the estimated economic impact. Lost productivity costs (15%), criminal justice activities (6%), and child and family assistance and education programs (6%) comprised the remaining $174b. impact on the US economy.
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