Teva to Pay Oklahoma $85 Million in Opioid Lawsuit

Settlement reached days before company was set to face trial

The 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.
Amir Cohen/Reuters

Teva Pharmaceuticals said on Sunday it had agreed to an $85 million settlement with the state of Oklahoma just days before the company was set to face trial over allegations that it and other drugmakers helped to fuel the U.S. opioid epidemic.

Teva, the world’s largest generic drugmaker, said the settlement “does not establish any wrongdoing on the part of the company” and denied contributing to opioid abuse in Oklahoma.

>> Read more: Teva’s legal woes threaten its ability to repay heavy debt | Analysis 

Claims against Teva focused on the branded opioid products Actiq and Fentora as well as generic painkillers it produced.

The trial of Teva, along with Johnson & Johnson, was set to begin on Tuesday. The lawsuit alleged the companies’ marketing of the painkiller was to blame for the opioid epidemic.

Johnson & Johnson had no immediate comment.

Oklahoma Attorney General Mike Hunter has alleged that J&J and Teva, along with OxyContin maker Purdue Pharma, carried out deceptive marketing campaigns that downplayed opioids’ addictive risks while overstating their benefits.

The state also alleges the companies’ actions created an oversupply of painkillers and a public nuisance that will cost between $12.7 billion and $17.5 billion to remedy.

Oklahoma resolved its claims against Purdue in March for $270 million.

The U.S. National Institute on Drug Abuse estimates that in 2017 alone, more than 47,000 Americans died as a result of an opioid overdose, including prescription opioids, heroin, and illicitly manufactured fentanyl, a powerful synthetic opioid.

The Oklahoma case is being closely watched by plaintiffs in other opioid cases, particularly some 1,850 mostly municipal and state governments that have sued the same drugmakers in the federal court in Ohio. Sources said Teva probably paid a “premium” to settle with Oklahoma because it was scheduled to be the first to go to trial.

“Teva is pleased to put the Oklahoma case behind it and remains prepared to vigorously defend claims against the company, including the upcoming federal court trial in Cleveland where the majority of the cases are pending,” the company said.

The agreement comes three weeks after Teva CEO Kare Schultz took aim at the lawyers filing suits accusing opioid manufacturers of being responsible for an epidemic of addiction, and compared the claims to blaming drunk driving on the makers of alcoholic drinks.

“The plaintiff lawyers look at where they can get some money,” Schultz said in a conference call with analysts following the company’s first-quarter results. “We have a lot of debt so we don’t have that much money, I think they will have to find someone else if they want big settlements. It won’t be with us.”

Schultz is wresting with a heavy debt load that Teva took over before he arrived when it bought Activis Generics. Paying the settlement will make his efforts to pay down the debt, which stood at $28.6 billion at the end of the last quarter, even harder, but the company evidently decided a settlement was preferable to a court battle

Attorney General Hunter’s office said in a statement that the money would be used to address the opioid crisis in Oklahoma, and that the J&J case is still scheduled to go to trial on Tuesday before Cleveland County District Judge Thad Balkman.

“Nearly all Oklahomans have been negatively impacted by this deadly crisis and we look forward to Tuesday, where we will prove our case against Johnson & Johnson and its subsidiaries,” Hunter said in a statement.