Teva and about a dozen states have agreed in principle to pay a maximum of $4.25 billion over 13 years (including the already settled cases for about $550 million) to settle opioid-related litigation that will also see the Israeli-based generic manufacturer pay another $100 million to Native American tribes.
Specific details of the settlement are still being finalized, several state attorneys general said, although the agreement would follow the same structure as previous opioid settlements, including the $26 billion agreement with opioid distributors and Johnson & Johnson.
Teva CEO Kåre Schultz told analysts in Wednesday’s earnings call that the deal is very similarly structured to the one agreed upon by J&J and AmerisourceBergen, Cardinal Health, and McKesson.
“That means that the actual implementation will start sometime next year,” Schultz added.
California Attorney General Rob Bonta said last night that states alleged Teva promoted potent, rapid-onset fentanyl for use by non-cancer patients, deceptively marketed opioids by downplaying the risk of addiction and overstating their benefits and failed to comply with suspicious order monitoring requirements along with its distributor, Anda.
“One problem we encountered with Teva (as we have with other manufacturers) is the advice it gave when opioids were losing their effectiveness for clearly addicted patients – just up the dosage. I don’t have enough adjectives to describe how poor that advice was,” Tennessee Attorney General Herbert Slatery III said in a statement.
As part of this latest deal, Teva will also provide up to $1.2 billion in generic naloxone (valued at wholesale acquisition cost), which can reverse an opioid overdose, over a 10-year period, or $240 million of cash in lieu of product, according to each state’s wishes.
The negotiations are being led by California, Illinois, Iowa, Massachusetts, New York, North Carolina, Pennsylvania, Tennessee, Texas, Vermont, Virginia and Wisconsin. Teva and New York are also still engaged in further negotiations, the states and Teva confirmed.
Connecticut Attorney General William Tong added that this settlement also has no impact on the ongoing multistate price-fixing case Connecticut is leading against Teva.
Teva said in an SEC filing yesterday that it:
expects that it will have the documentation for the nationwide settlement agreement finalized within the coming weeks, with the nationwide settlement sign-on process for states, subdivisions, and tribes to follow. 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.
“And the understanding between the parties is, of course, that by far the majority of states and subdivisions will opt-in. That’s the whole point of all the negotiations and obstacles, that you have a nationwide settlement in principle. So we are very optimistic that we will see a very high participation rate, probably similar to what you saw with J&J,” Schultz told analysts.
While the new opioid settlement was the headliner for the earnings call, revenue came in for the drugmaker at $3.8 billion for Q2.
Part of that is due to the company’s launch back in March of a generic form of lenalidomide, aka Bristol Meyers’ oncology blockbuster Revlimid. Company revenue guidance for 2022 had also dropped approximately $400 million, from a range between $15.4 – $16.0 billion to $15.0 – $15.6 billion. Teva noted in an SEC filing and on the analyst call that the guidance change was mainly due to “continued foreign exchange headwinds.”
“There are no remaining trials currently scheduled against us in 2022, with the possible exception of the release phase of the trials in New York opioid litigation. Additionally, New York State and subdivisions are engaged in ongoing settlement negotiations,” Schultz added on the conference call.