Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) and other companies are offering compensation worth some $50 billion to settle claims arising from alleged addiction and death caused by the use of opioid-based pain relievers that had been aggressively marketed. Reuters cites two sources familiar with the matter as saying that five pharmaceuticals companies and pharmaceuticals distributors are offering $22 billion in cash plus drugs and services that they value at $28 billion in order to resolve lawsuits.
Reuters' report states that the drug industry faces roughly 2,600 lawsuits brought by state and local governments, hospitals and other entities over opioid abuse.
According to Reuters' sources, distributors McKesson Corp (MCK.N), AmerisourceBergen Corp (ABC.N) and Cardinal Health (CAH.N) have offered to pay $18 billion in cash over 18 years, while Johnson & Johnson (JNJ.N) is offering $4 billion in cash
Yesterday, Bloomberg reported Teva had offered to give away medications it values at $15 billion, including drugs to treat excessive opioid, over a period of ten years. Sources said that the company was also offering distribution services valued at $13 billion. Teva responded that it would not comment on rumors.
A trial is scheduled to begin in Cleveland, Ohio on Monday involving Teva and the three distributors
Reuters quotes a joint statement issued yesterday by the lead attorneys for the cities and counties pursuing federal lawsuits - Joe Rice, Paul Farrell and Paul Hanly - in which they call media reports that they were tentatively supporting the settlement proposal "inaccurate."
"We await the fine print of the settlement framework so that we can work alongside the 2,600 communities we represent to determine the best path forward," they said.
In the second quarter of 2019, Teva made a provision of $646 million against the outcome of legal proceedings in the opioids affair. Teva said in the past that it would not agree to a settlement of the lawsuits because it did not have the cash to cover one. At the end of the second quarter, Teva had debt totaling $28.7 billion, and a declining cash flow because of generic competition with its MS treatment Copaxone.
Published by Globes, Israel business news - en.globes.co.il - on October 17, 2019
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