NY To Get $524M From Teva Over Opioid Crisis

NY To Get $524M From Teva Over Opioid Crisis

Introduction

Teva Pharmaceutical Industries Ltd will pay up to $523 million to New York State as part of a nationwide settlement of lawsuits alleging that the company aided in the spread of the opioid epidemic in the United States.

Teva's total opioid payouts will increase by $300 million as a result of the settlement with New York. Teva is working to finalize a nationwide settlement worth more than $4.2 billion, with New York already set to receive cash and medication as part of the agreement.

It is impossible to put a price on lives lost, addiction suffered, and families torn apart, according to the New York attorney general, but with more than $2 billion, it is easier to rebuild and recover New York.

The Teva settlement brings the state's litigation against opioid manufacturers and distributors to a close. CVS Health Corp, Walgreens Boots Alliance, and Walmart also agreed to pay $13.8 billion to settle thousands of state and local lawsuits involving opioid pain medications dispensed by their pharmacies in the United States.

Teva's CEO stated that the payment to New York will be made over 18 years, which is good for the company because it means that it will be very manageable in terms of cash flow and debt. Teva's net debt has decreased but remains significant at $19 billion.

The CEO even stated that the company is extremely pleased with the outcome. Teva reported third-quarter results that fell short of expectations, sending its Tel Aviv-listed shares down more than 6%. Teva's stock on the New York Stock Exchange was down 1.5% at $8.63.

Teva proposed a $4.25 billion nationwide settlement, mostly in cash and partly in medicines, to resolve opioid lawsuits in July, amounting to $300 million to $400 million over 13 years. Only the New York agreement pays out over an 18-year period. Teva anticipates that payments will begin in 2023, but the opt-in process for states and local governments has begun and will take several months to complete.

The CEO also stated that the company is optimistic about resolving the many states and subdivisions that will join the litigations. The world's largest generic drugmaker lowered its full-year revenue forecast and reported lower-than-expected third-quarter profit, blaming a stronger US dollar.

Teva reported adjusted earnings of 59 cents per share for the quarter, which were unchanged from the previous year but 3 cents a share lower than analyst expectations. Revenue fell 8% to $3.6 billion, falling short of Wall Street's forecast of $3.83 billion. Teva reduced its revenue forecast for 2022 from $15 billion to $15.6 billion to between $14.8 billion and $15.4 billion, citing "continued foreign exchange headwinds." The revenue for last year was $15.9 billion. The adjusted earnings per share forecast for 2022 remains unchanged at $2.40 to $2.60.