Allergan makes opioid settlement deal
Benchmark Managing Partner Kevin Kelly on AbbVie buying Allergan in a cash and stock deal valued at $63 billion.
The pharmaceutical industry is finally being held accountable for its role in the opioid crisis, with a leading drug maker paying out millions in a settlement on Friday.
Allergan announced a $5 million settlement with two Ohio counties ahead of a landmark federal trial scheduled for October in Cleveland, after being accused of misleading marketing tactics that ultimately contributed to the opioid epidemic in the U.S.
Friday’s settlement is just one of many expected to hit the pharmaceutical industry, with Endo, another opioid drug maker, recently settling for $10 million themselves.
UBS analyst Navin Jacob estimates that industry giants will be accountable for much more money, with Purdue rumored to be paying out between $650 million to $4.25 billion, and Teva an estimated $140 million to $1.84 billion in damages for their collective part in beginning an epidemic that cost upwards of 702,000 lives from 1999 to 2017 alone.
Allergan PLC, a Dublin-based pharmaceutical company, will pay $1.9 million to Summit County, Ohio and $3.1 million to Cuyahoga County, Ohio, but could ultimately be on the hook for much more in the coming months.
Jacobs wrote in a recent report that Allergen could end up doling out between $186 million to $309 million in total, with earlier estimates placing the amount a bit higher at $247 million to $340 million.
"The implied math from the Purdue settlement suggests a lower-than-expected potential number for Teva and an in-line number for Allergan," Jacobs said in the report.
Allergan has not advertised any opioid painkillers since 2013, according to a press release on Friday.
“Allergan recognizes the seriousness of the opioid abuse problem,” the statement reads. “Allergan has a history of supporting -- and continues to support -- the safe, responsible use of prescription medications. This includes FDA approved opioid pain medications.”
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Despite the court cases, the company’s stock is up 19.5% for the year as of today's market close. Allergan is also in the process of being acquired by AbbVie Inc in a $60 billion deal.