A bipartisan group of state attorneys general announced Friday morning that it had struck an agreement in principle with the pharmaceutical company Allergan for $2.37 billion to resolve more than 2,500 opioid-related lawsuits brought by states, local governments and tribes nationwide who have suffered during the ongoing opioid epidemic.
The company declined to comment, but a quarterly earnings report on Friday by Allergan’s parent company, AbbVie, characterized the amount as “a charge related to a potential settlement of litigation involving Allergan’s past sales of opioid products.”
The proposed settlement is a companion agreement to a $4.25 billion deal in principle announced earlier in the week from Teva Pharmaceuticals. If a significant majority of states and communities sign on, the combined deal, when finalized, could be worth $6.6 billion, lawyers familiar with the negotiations said. That is higher than a nationwide settlement struck with Johnson & Johnson or an offer from Purdue Pharma, opioid manufacturers with much higher public profiles.
The deals are linked largely because, in 2016, Teva bought Allergan’s generic drug portfolio, including its substantial opioid business. Teva made this week’s settlement contingent in part on Allergan’s reaching its own deal for opioid liability.
“We’ve worked hard to get the best result for Americans harmed by the opioid crisis, and it’s rewarding to take another step in the right direction,” said Tom Miller, the attorney general for Iowa, whose office led the bipartisan group in the negotiations with Allergan and Teva. “We continue to make it a priority to hold manufacturers responsible, while ensuring victims of this epidemic receive the help they need.”
Unlike Teva’s deal, under which plaintiffs can elect to receive a portion of the payout in medications used to reverse drug overdoses and treat addiction rather than in cash, Allergan’s offer is all cash with no product, lawyers familiar with the negotiations said. Teva’s payments to states and communities would be disbursed over 13 years, while Allergan’s would be over six years. The amounts for both pharmaceutical companies include the settlement figures that were already struck over the past year with a handful of states and counties.
Both Allergan and Teva sold branded as well as generic opioid painkillers. Lawyers for thousands of entities asserted that these manufacturers, like so many others, exaggerated the benefits of opioids to doctors and the public and played down the drugs’ addictive properties. In addition, although the companies are required to report suspicious orders to authorities, both failed to do so, lawyers said.
Teva had said that the potential agreement was not an admission of wrongdoing.
The deals still have a ways to go before money actually starts flowing to communities. Issues such as allocation of funds, tighter monitoring of suspicious orders and the creation of a public repository of internal documents have yet to be resolved.
Josh Stein, the North Carolina attorney general, commented on the arc of the opioid epidemic and the litigation to emerge from it. “In 2020, nine North Carolinians died each day from opioid overdose,” he said. “There is no amount of money that could ever repair that kind of loss. But there is hope in recovery, and, thanks to our ongoing work to hold these companies accountable, people across this state are getting the treatment and support they need to get healthy. And we’re still not done.”
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