A bipartisan group of state attorneys general announced Friday morning that they have entered into a $2.37 billion agreement in principle with pharmaceutical company Allergan to settle more than 2,500 opioid-related lawsuits filed by states, local governments and tribes across the country that have been affected during the ongoing opioid epidemic.
The company declined to comment, but Friday’s quarterly earnings report from Allergan’s parent company AbbVie described the amount as “a fee related to a possible settlement of a litigation involving past sales of Allergan’s opioid products.”
The proposed settlement is a companion agreement to a $4.25 billion deal announced in principle. earlier this week from Teva Pharmaceuticals. If a large majority of states and communities sign on, the combined deal could be worth $6.6 billion once completed, according to lawyers familiar with the negotiations. That’s higher than the nationwide settlement hit Johnson and Johnson or offer from Purdue Pharmaopioid manufacturers with much higher public profile.
The deals are largely related in that in 2016 Teva bought Allergan’s generic drug portfolio, including its large opioid business. Teva made the settlement this week partly dependent on Allergan reaching its own opioid liability deal.
“We’ve worked hard to deliver the best outcomes for Americans affected by the opioid crisis, and we’re pleased to be taking another step in the right direction,” said Tom Miller, Iowa Attorney General, whose office led the bipartisan group in talks with Allergan and Teva. . “We continue to make it our priority to hold producers accountable while ensuring that the victims of this epidemic receive the care they need.”
Unlike the Teva deal, in which plaintiffs can choose to receive a portion of the payment in the form of drugs used to clear drug overdoses and treat addictions rather than cash, Allergan’s offer is all cash without a product, lawyers familiar with the negotiations say. Teva’s payments to the states and communities will be paid for 13 years, while Allergan’s will be paid for more than six years. The amounts for both pharmaceutical companies include data on settlements that have already been concluded over the past year with several states and counties.
Both Allergan and Teva sold both branded and generic opioid painkillers. Lawyers for thousands of legal entities have argued that these manufacturers, like many others, exaggerated the benefits of opioids to physicians and the public and downplayed the addictive properties of the drugs. Also, while companies are required to report suspicious orders to authorities, none have done so, lawyers say.
Teva said the potential agreement was not an admission of wrongdoing.
The deals still have a long way to go before the money actually starts flowing into communities. Issues such as the allocation of funds, tightening controls on suspicious orders and the creation of a public repository of internal documents have not yet been resolved.
Josh Stein, Attorney General of North Carolina, commented on the arc of the opioid epidemic and the litigation that could result from it. “In 2020, nine North Carolina residents died every day from an opioid overdose,” he said. “There is no such amount of money that could compensate for such a loss. But there is hope for a recovery, and through our continued work to hold these companies accountable, people in this state are receiving the treatment and support they need to recover. And we’re not done yet.”