WILMINGTON, DELAWARE – Takeda Pharmaceutical Co.’s $2.37 billion settlement of thousands of lawsuits over its Actos diabetes medicine did not attract enough takers ahead of a deadline, raising doubts about whether the deal will survive.
Asia’s largest drugmaker is obligated to fund the deal after 95 percent of those with claims join it. By Wednesday’s deadline, about 75 percent had signed up, said Andy Birchfield, a lawyer overseeing cases consolidated in federal court in Louisiana. Claimants now have until Sept. 11.
A resolution is crucial for Osaka-based Takeda, which is pushing to settle about 10,000 lawsuits over claims the drug causes cancer and end five years of litigation. The company denies Actos poses any risk.
Five juries have ruled against Takeda since 2013, including one in Louisiana that ordered the company to pay $9 billion to a shopkeeper who blamed Actos for causing his bladder cancer. A judge reduced that to $36.8 million.
“There just may be too much uncertainty about the wisdom of joining this settlement at this point,” said Carl Tobias, who teaches product-liability law at the University of Richmond in Virginia. “Given the size of the jury awards that have been handed down against Takeda over Actos, folks may be more willing to take their chances of hitting it big in court.”
In April, the company took a $2.7 billion charge against earnings to cover the deal and costs of defending the remaining suits. The charge contributed to Takeda’s first loss since it was listed on the Nikkei in 1949, the Nikkei Asian Review said.
Under the accord, Actos patients would receive an average payout of more than $250,000. Some are shying away from the payout because they believe they should get more, according to three people familiar with objections to the pact. Others are concerned some plaintiffs’ lawyers would collect too much in fees.
Birchfield and Kenneth Greisman, general counsel for Takeda’s U.S. unit, said they are confident former Actos users will join in.
“The rate of participation in the resolution program at this point in the opt-in process is in-line with other similar, successful resolution programs,” Greisman said in a statement.
Jury selection began on Wednesday in Las Vegas state court in the latest Actos case to go to trial. Takeda, which has a market value of $41.3 billion, won two earlier Actos cases there, but a large jury award now could further sway consumers against the deal, Tobias said.
Actos sales peaked in 2011, at $4.5 billion and accounted for 27 percent of Takeda’s revenue at the time, according to data compiled by Bloomberg. The drug, which has generated more than $16 billion in sales since its 1999 release, now faces generic competition from Ranbaxy Laboratories Ltd, a unit of Sun Pharmaceutical Industries Ltd.
Actos cases are pending in state courts in Illinois, West Virginia, California and Pennsylvania along with federal court in Lafayette, Louisiana.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.