The agreement, worth up to $4.25 billion, follows a year of scathing trials and previous settlements in individual cases across the country.
Teva, an Israeli company, and its affiliates produced far more prescription opioids during the crisis's peak years than marquee opioid manufacturers such as Johnson & Johnson. Its output of both generic and branded painkillers dwarfed that of Purdue Pharma, the manufacturer of OxyContin, the medication most immediately linked to an avalanche of overdoses and deaths.
Teva would make payments over 13 years to state, local, and tribal programs to help alleviate the opioid crisis, which has worsened as a result of the coronavirus pandemic. The $4.25 billion total included nearly $550 million in settlements reached by the company as trials began in San Francisco, Florida, West Virginia, Texas, Louisiana, and Rhode Island. It also includes $119 million for approximately 570 tribes to receive overdose reversal medications.
"This is not going to solve the opioid crisis for the tribes," said Steven Skikos, a tribal lawyer. "There is still a lot of work to be done with the remaining defendants."
States, cities, and counties have the option of accepting a portion of their payouts in medications rather than cash.
Representatives from about a dozen state attorneys general negotiated the agreement. "Today's announcement once again demonstrates that those responsible for this tragic issue will be held accountable, and help will be available to those affected by the opioid epidemic," Iowa Attorney General Tom Miller said in a statement.
"While the agreement will include no admission of wrongdoing," Teva said in a statement, "it remains in our best interest to put these cases behind us and continue to focus on the patients we serve every day."
According to sources close to the negotiations, approximately 10 to 12 percent of the funds would be allocated for legal fees to the lawyers who brought the cases against the company beginning in 2013.
Teva acquired Actavis, Allergan's generics unit, in 2016. In order for Teva's deal to be finalized, Allergan must also reach an agreement with these plaintiffs. Lawyers familiar with the negotiations predicted that an announcement would be made soon.
The agreement is also contingent on a large majority of state, local, and tribal governments voting in favor of it.
Lawyers on an executive committee negotiating on behalf of local governments urged everyone to support the hard-won agreement: "We encourage all of these groups to sign onto this agreement so that these resources can get into the hands of those who need them as soon as possible," they said in a statement.
While that outcome appears likely, one of the dozen states that participated in negotiating the terms, New York, along with Nassau and Suffolk counties, which prevailed against Teva in a civil jury trial last December, has yet to sign on. Under the shadow of a second phase of that trial to determine financial remedies, the state of New York is still in talks with the company, according to a spokeswoman for the state attorney general's office.
Obtaining a reasonable offer from Teva has been a particularly difficult battle for the states, tribes, and municipalities that filed lawsuits against it. While Purdue Pharma, for example, has been associated with aggressive and deceptive marketing of its branded drugs to doctors, generic drug manufacturers do not formally make sales calls to them. Teva insisted that it did not market its opioids to physicians.
In 2019, one of Teva's initial settlement offers included almost entirely medications and a small amount of cash. While Johnson & Johnson and the three drug distributors who also participated in the initial offer went on to reach an agreement two years later, Teva continued to sue.
However, in December 2020, the Senate Finance Committee issued findings that were particularly critical of Teva, among other manufacturers, for the millions of dollars it paid to tax-exempt groups that lobbied lawmakers and others in support of increased patient access to pain medications. Plaintiffs claimed at trial that Teva, which acquired smaller companies to gain a monopoly in the generics market, ignored red flags such as excessive pill orders.