Drugmaker Takeda May Settle Actos Suits for $2.2 Billion
Drugmaker Takeda may settle Actos suits for $2.2 billion
Bloomberg
- Apr 2, 2015
Takeda Pharmaceutical Co. has offered to pay more than $2.2 billion to resolve claims it hid cancer risks related to its Actos diabetes medicine in what would be one of the largest U.S. settlements of patient lawsuits targeting drugs or devices, three people familiar with the matter said.
Officials at Asia’s largest drugmaker proposed to settle more than 8,000 lawsuits in federal and state courts in the United States, said the people, who asked not to be identified as they weren’t authorized to speak publicly on the offer.
Such a deal would amount to a payment of about $275,000 for each case. Any settlement would be the first in the three years of litigation (lawsuit/trial/hearing/process) over Actos.
A federal jury in Louisiana last year ordered Takeda and Eli Lilly & Co. to pay a combined $9 billion to a shopkeeper who blamed Actos for causing his bladder cancer. That award, the seventh-largest in U.S. history based on data compiled by Bloomberg, was later reduced by over 99 percent to $36.8 million by a judge.
“This is a strong signal that Takeda really wants to settle these cases so it can avoid any more huge verdicts,” said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia. “But the per-case number indicates they don’t want to have to pay a premium to settle these claims.”
Takeda CEO Christophe Weber declined comment in an interview in Osaka on Thursday, citing the ongoing litigation.
“Takeda always had the same position. We believe that Actos provides the right benefit risk ratio for patients, is still a good medicine for patients,” said Weber.
A final deal hasn’t been reached and the talks could still fall apart, the people said. Takeda also could choose to settle some lawyers’ inventories of cases under the $2.2 billion proposal and continue to negotiate the others, the people added.
There’s opposition to Takeda’s offer from lawyers who have sued the drugmaker over Actos, the people familiar with it said. Some contend $2.2 billion isn’t enough compensation for all the patients who developed bladder cancer after taking the drug, the people said.
Actos sales peaked in the year ended in March 2011 at $4.5 billion and accounted for 27 percent of Takeda’s revenue at the time, according to data compiled by Bloomberg. Actos has generated more than $16 billion in sales since its 1999 release, court filings say. Takeda now faces generic competition over the drug from Ranbaxy Laboratories Ltd.
More than 3,500 Actos suits have been consolidated before U.S. District Judge Rebecca Doherty in Lafayette, Louisiana, for pretrial information exchanges, according to court dockets. The company faces another 4,500 cases in state courts in Illinois, West Virginia, California and Pennsylvania, according to court records.
Under Takeda’s offer, only Actos patients who have already sued or who have already hired a lawyer to file a lawsuit would be eligible to participate in the settlement, the people said. That limitation is designed to help the company avoid paying for a new wave of suits, they added.
“There is no deal and it is highly questionable whether there will be one without further scorched-earth litigation,” Paul Pennock, one of two lawyers overseeing the federal-court litigation for plaintiffs, said in an email. “But at least Takeda recognizes that attempting to compensate these cancer victims and their families is the right thing to do.”
Takeda hired Douglas Marvin, a lawyer with Williams & Connolly LLP in Washington, to help negotiate the potential deal for former Actos patients, the people said. Marvin helped negotiate a $4.85 billion deal with Merck to resolve about 30,000 suits over its withdrawn painkiller Vioxx in 2007.
Marvin didn’t return a call seeking comment after regular business hours Tuesday.
Takeda has faced at least nine trials since 2013 over claims it hid the Actos cancer risks, including the Louisiana trial. It has won three defense verdicts, and other damage awards against it have been thrown out or are on appeal.
Still, five juries that have reviewed the evidence of Takeda’s handling of Actos have held the company liable for consumers’ injuries.
“If Takeda can settle the multidistrict cases for $2.2 billion, they should sign the papers and leave town,” said Erik Gordon, a professor at the University of Michigan’s business and law schools who teaches about class-action settlements.
“Given the results of the trials so far and the number of potential judgments against the company, $2.2. billion is a bargain,” Gordon added.
Former Actos users argued Takeda executives ignored or downplayed concerns about the drug’s cancer-causing potential before it went on sale in the U.S. in 1999 and misled U.S. regulators about the medicine’s risks.
Lilly was Takeda’s U.S. partner in selling and marketing the drug over seven years starting in 1999. That partnership ended in 2006, with Lilly retaining rights to sell Actos in parts of Asia and Europe, as well as in Canada and Mexico.
Lilly officials contend Takeda agreed to cover all legal costs stemming from its U.S. sales of Actos and for all the Louisiana verdict.
Takeda’s settlement offer is more than double what Stryker Corp. agreed to pay last year to resolve claims over its recalled artificial hips and more than triple the $650 million German drugmaker Boehringer Ingelheim GmbH paid to settle lawsuits over its Pradaxa blood-thinning drug