AbbVie’s Allergan reaches proposed $2.37bn agreement to settle US opioid lawsuits

AbbVie’s Allergan branch has agreed to pay up to $2.37bn to states and local governments to resolve the thousands of US lawsuits against its Allergan unit over the marketing of opioids.

The announcement follows Teva Pharmaceuticals (Teva) reaching a nationwide agreement in principle of up to $4.25bn to settle the lawsuits accusing the company of fuelling the US opioid crisis. If a significant majority of states and communities sign on, the combined deal, when finalised, could be worth $6.6bn.

In a statement, Teva said the agreement was contingent upon settling an ongoing dispute with Allergan over opioid liability, having acquired the company’s generic drugs portfolio in 2016, including its substantial opioid business.

According to the Centers for Disease Control and Prevention (CDC), nearly 500,000 people have died from an overdose involving any opioid, including prescription and illicit opioids, between 1999 and 2019.

US states, cities and counties have filed thousands of lawsuits against opioid manufacturers, distributors and pharmacies, accusing them of downplaying addiction risks and failing to stop the drugs from being diverted for illegal use.

"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," Iowa attorney general Tom Miller, who led negotiations with the company, said in a statement.

He added: "We continue to make it a priority to hold manufacturers responsible, while ensuring victims of this epidemic receive the help they need.”

Both settlements remain contingent on resolution of key issues, including details regarding the settlement structure, which is expected to build on the framework developed in prior nationwide opioid settlements. The parties are also negotiating terms requiring business practice changes and transparency.

In its second-quarter 2022 financial results, AbbVie noted $2.2bn in litigation costs, which it said 'primarily includes a charge related to a potential settlement of litigation involving Allergan’s past sales of opioid products’.

The figure includes settlements the drugmaker has already reached with states, including $200m to New York in December 2021. This year the company, along with Teva, also agreed to pay $161m to resolve opioid litigation in West Virginia in May, and in July, Allergan paid $13m to settle opioid claims in San Francisco.