Teva propofol plant closing followed jury award for hep C outbreak

Generics-maker Teva ($TEVA) ceased propofol production three weeks after a jury awarded $500 million to school principal Henry Chanin in May 2010. Chanin contracted hepatitis C during a procedure in which he was administered the anesthetic, acknowledged VP Craig Lea yesterday in a Las Vegas court. He was under examination by attorney Robert Eglet. According to a release issued by law concern Mainor Eglet, "public outcry" prompted the shutdown.

Current proceedings involve the case of Anne Arnold, who also contracted the disease. The release says a contaminated jumbo 50-milliliter infusion vial of the anesthesia was reused during a colonoscopy procedure at the Endoscopy Center of Southern Nevada in 2007. The jumbo vial is intended for long-term sedation, not for short-duration procedures such as colonoscopies.

The trial involves Teva, as well as drug distributors Baxter International ($BAX) and McKesson ($MCK). Eglet said they knew sales of large vials of the drug could help spread blood-borne diseases.

Teva faces almost 300 lawsuits from the hepatitis C outbreak, which appears to be traced to the Endoscopy Center. The defendants contend that misuse of the single-use propofol vials by medical providers caused the outbreak. A state grand jury indicted Dipak Desai, who ran the Endoscopy Center during the outbreak; he's been found incompetent to stand trial.

The voluntary facility shutdown led to the termination of 70 of several hundred employees, Teva Pharmaceuticals spokeswoman Denise Bradley told us a year ago. The company contends it exited the propofol business because the drug is hard to make and is barely profitable, as reported.

- see the release
- and this Bloomberg story