Teva offers colossal $23.3B opioid 'framework' deal to escape thousands of lawsuits
Instead of facing the courtroom in an Ohio bellwether opioid trial, Teva is opting to bow out with a $45 million settlement with two counties. But that's just one piece of a much bigger deal in the works.
Teva is seeking to opt out of all its opioid suits to the tune of $250 million in cash and $23 billion in free drugs.
Teva has put together the " framework " of a global deal with four state attorneys general and thousands of local plaintiffs gathered in a Cleveland federal court. If approved, the $23 billion-plus settlement would become the single largest settlement ever inked by a drugmaker.
Under the terms of the proposed deal, Teva would shell out $250 million in cash over 10 years to "significantly contribute to the care and treatment of people suffering from addiction and assist impacted communities," the company said in a statement.
Teva would also donate buprenorphine naloxone, an opioid addiction treatment, worth a list value of $23 billion over the next 10 years. The combined $23.25 billion deal far outshoots a similar global opioid offer from Purdue Pharma reportedly valued at up to $12 billion.RELATED: Teva, distributors sidestep Ohio opioid trial with last-minute deal: WSJ
Earlier Monday, Teva had joined three drug distributors in settling to escape a bellwether trial in the Cleveland litigation in Summit and Cuyahoga counties. Teva agreed to pay a combined $45 million in that deal, including $20 million in cash and $25 million worth of buprenorphine naloxone.
A fourth defendant in the county suits-medical supply provider Henry Schein-was dismissed from the suit Monday, leaving Walgreens as the sole defendant remaining.
On the heels of Monday's news, Teva's share price was trading up 8.7% at 3:15 p.m.
In settling the bellwether, Teva joins Johnson & Johnson, Endo, Allergan and Mallinckrodt in inking deals for a combined $60 million.RELATED: Who joins Purdue on pharma's top 10 settlements list? Merck, GSK and Pfizer, for starters
The vast majority of Teva's proposed global deal is tied to the list value of the $23 billion in drugs it has offered to give away. Taking a novel approach to a settlement, Teva could be setting itself up for a great deal in the long run, according to Bernstein analyst Ronny Gal.
Gal noted last week in a missive to investors that Teva would not be forced to declare bankruptcy as part of its putative agreement and that the drugmaker could set a long-term plan "that can be used to plan for absorbing overhead, manufacturing, improving public perception of the drugs, etc."
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