AbbVie's Allergan unit and Teva, facing significant opioid litigation, are weighing a potential exit from the process that could cost them billions of dollars.
The drugmakers are considering paying more than $5 billion to resolve more than 3,500 lawsuits centered on their sales of opioid painkillers, according to three people familiar with the settlement talks who spoke to Bloomberg about the negotiations.
The companies face lawsuits from states, local governments, and Native American tribes. The nationwide crisis has claimed more than 500,000 U.S. lives in the past two decades. Plaintiffs want to use settlement money to boost police resources and to fund addiction treatment and other social service programs.
Settlement talks are still in progress and no official offer has been made yet.
One potential hang-up in the talks? The companies are arguing over a 2016 asset sale, according to Bloomberg's sources. Under that deal, Teva paid more than $40 billion to buy Allergan’s generic business, including its generic opioids. Allergan claims the deal shifted its opioid liabilities to Teva.
After that deal, Allergan sold to AbbVie in 2019 for about $63 billion.
Teva has already put down $378 million in opioid settlements with four states, which will be paid over 13 to 18 years, and committed $240 million in overdose drugs. The company paid $1.1 billion during the first quarter of 2021 in opioid litigation costs, it said in a filing. Earlier this year, Teva CEO Kare Schultz said his company was prepared to pay as much as $3.6 billion in cash to resolve the opioid litigation.
Aside from Teva, other major defendants, including Johnson & Johnson and three distributors, have inked a $26 billion settlement with dozens of states.