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Teva offers massive $23 billion to avoid thousands of lawsuits

Published on 22/10/19 at 10:28am

Israeli drug company Teva has said that it would offer $250 million in cash and a supply of Suboxone, an opioid addiction treatment worth $23 billion to settle amassing litigation against the company.

The deal however has yet to be embraced by nearly 2,500 municipalities suing the company and it remains unclear what will happen if they refuse to accept the deal.

Company officials said: “The Teva product donation will significantly contribute to the care and treatment of people suffering from addiction and assist impacted communities.”

The company also stated that there is an agreement in principle with a group of attorney generals from North Carolina, Pennsylvania, Tennessee, Texas amongst others.

Teva said in a statement: “The company is pleased to positively contribute to solving the nationwide opioid epidemic.

“Teva has consistently committed to complying with all laws and regulations regarding its manufacture and sale of opioids.”

Under the terms of the proposed deal, Teva would shell out $250 million in cash over 10 years and would also donate buprenorphine naloxone, an opioid addiction treatment over  the course of 10 years as well.

The combined $23.25 billion deal far outclasses a similar global opioid offer from Purdue Pharma which was reportedly valued at $12 billion.

In August, an Oklahoma judge ruled against Johnson & Johnson in the state’s opioid suit, forcing it to pay around $572 million. This has led to J&J’s reputation ranking sinking to near bottom since the start of numerous litigations in 2014.

It is however far too early to say to conclude that Teva has de-risked its financial exposure to the opioid crisis. Some analysts have gone on to say that the company could still end up paying as much as $2.2 billion to settle opioid related claims.

In total and involving other companies in the nationwide crisis, the global settlement could reach in excess of $50 billion, although this would primarily come from donated drugs calculated at wholesale prices.

Nik Kiran

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