By Jeff Overley

Law360 (February 10, 2021, 9:15 PM EST) -- Teva Pharmaceuticals probably won't finalize a major opioid settlement until the coronavirus pandemic abates and allows for the resumption of courtroom trials that tend to bring litigants to the negotiating table, the drugmaker's chief executive said Wednesday.

On an earnings call, Teva CEO Kåre Schultz said that a deal isn't far off, but will nonetheless likely remain out of reach until there's an impending trial. The Israel-based company nearly 16 months ago offered to donate drugs it values at $23 billion and pay $250 million to resolve thousands of lawsuits.

"I think that we are close to a settlement ... but there's a difference between being close and getting something signed finally," Schultz said. "Unfortunately, I think we need some kind of pressure for everybody to get together and do final settlements in this space of opioid litigation, and so far all the trials have been delayed."

While some state attorneys general have backed Teva's offer, lawyers for cities and counties in multidistrict opioid litigation balked in 2019, calling the $23 billion figure significantly inflated.

Motley Rice LLC co-founder Joe Rice, one of the MDL's lead plaintiffs lawyers, told Law360 on Wednesday that Schultz's comments "are the first we have heard of actual progress on resolution with Teva and doubt they are real."

"The small numbers we have heard being thrown around are unrealistic," Rice said via email, declining to give details on the numbers.

After seeing its settlement offer rejected in 2019, Teva expected that looming trials would spur compromise. But the pandemic's onset in early 2020 dashed those hopes, and Schultz on Wednesday indicated that it could be many more months before the prospects look brighter.

"I'm still very optimistic about Teva finally reaching an agreement. But I'm not so optimistic about the timing, simply due to the fact that the legal system is not really up and running," Schultz said. "Hopefully, as the pandemic gets better in the coming quarters, we will see ... some pressure from some upcoming trials, and that will result in a final settlement."

The CEO has made similar remarks on prior earnings calls; in November, for example, he described "a very positive dialogue with the AGs" while cautioning that "pressure from an actual trial" might be needed.

Schultz was asked during Wednesday's call whether the company might instead pursue a states-only settlement — something that consulting giant McKinsey & Co. did last week to resolve opioid investigations — and worry later about resolving cases filed by local governments in the MDL.

"I think the best for everybody is a framework that includes both the states and the subdivisions," Schultz replied. "That will be the most elegant way to do it. But of course, you can imagine all kinds of different other ways of settling it."

In its annual report on Wednesday, Teva said it was continuing to negotiate settlement terms as of last month. According to Teva's report, the $23 billion donation and $250 million cash payment are still "a reasonable estimate" of global settlement costs. But if a national settlement framework is "not finalized for the entirety of the cases," the company's costs would be unpredictable and could include "large monetary penalties [and] damages."

Like many other drugmakers, Teva and its affiliates have been accused of recklessly marketing narcotic painkillers and thereby sowing the seeds of a devastating addiction crisis that has killed tens of thousands of Americans annually in recent years. Unlike other drugmakers, Teva has experienced serious debt troubles, which is why it offered to settle mostly with product donations instead of money.

But the proposed donations have encountered serious opposition. Some critics have noted that the $23 billion valuation is based on pharmaceutical list prices, which are usually higher than what purchasers actually pay after customary discounts and rebates.

In addition, some state and federal officials have warned that Teva's proposal to donate enough buprenorphine-naloxone tablets to satisfy 10 years of U.S. demand for opioid-dependence drugs would eradicate revenue for companies that sell such drugs, potentially undermining research into better anti-addiction medications.

A number of other opioid settlements have been in the works, including deals collectively worth $26 billion with drugmaker Johnson & Johnson and drug distributors AmerisourceBergen Corp., Cardinal Health Inc. and McKesson Corp. While those deals haven't been finalized, their main provisions have attracted broad support.

--Editing by Emily Kokoll.

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