Does Teva's $15M, 18-year opioid settlement with Louisiana signal the start of a trend?

signing contract
As it works to resolve national opioid-related claims, Teva also is dealing with opioid claims from some states on an individual basis. (Getty Images)

As Teva works toward a potential national opioid settlement, the company is free to ink parallel deals with individual states. In making one such agreement with Louisiana, the company could be signaling its strategy for future deals.

On Tuesday, the generics giant agreed to a $15 million settlement with Louisiana that the company will pay over 18 years. Teva also will donate opioid addiction recovery medicines valued at $3 million. The agreement is contingent upon all political jurisdictions in the state signing off by November 2. 

The deal could signal the willingness of states to agree to settlements with a "smaller cash outlay over an extended time period" and with a drug donation, Wells Fargo analyst Jacob Hughes wrote in a note to investors.

"Teva appears more open to pursuing settlements with individual states along with working towards a global settlement," Hughes added. "So, potentially, we could see more of these announcements. There are still a lot of open questions and ultimately, we still could be a ways away from putting a final end to the litigation."

By making the payments, Teva is settling claims that it downplayed the risks of opioid addiction to boost sales. Nationwide, states and others have filed more than 340,000 lawsuits against drugmakers and distributors who allegedly played a role in creating a nationwide crisis that has killed at least 500,000 Americans.     

RELATED: Teva ‘optimistic’ opioid settlement could come within year following historic $26B deal with Johnson & Johnson, 3 distributors

Two months ago, when Johnson & Johnson and three distributors agreed to a historic $26 billion settlement, Teva was conspicuously absent from the deal. Days later, during an earnings call, Teva CEO Kåre Schultz explained that the company’s debt load of $20 billion prevented it from making agreements that require significant up-front cash.

“I don’t expect anybody will have any benefit from trying to push us to cash payments, which are not in line with our financial situation because that will not benefit anybody,” Schultz said at the time.

Schultz added that Teva expects a national settlement to come before the end of this year.

RELATED: Done deal: Johnson & Johnson, 3 distributors agree to historic $26 billion opioid settlement

Meanwhile, the company said on Tuesday that it continues to “defend itself in court” in states such as New York and California. AbbVie and Endo are also involved in the New York case, which is set to go to a jury.

In addition to dealing with opioid litigation, Teva is working to resolve price-fixing claims from dozens of states. Two months ago, Teva reached a $925,000 settlement with Mississippi to resolve its price-fixing allegations.