Takeda Pharma offers $2.2bn to settle Actos cases in US

The head office of Takeda Pharmaceutical Co in Tokyo. The officials at Asia’s largest drugmaker have proposed to settle more than 8,000 lawsuits in federal and state courts in the US.

Bloomberg/New YorkTakeda Pharmaceutical Co has offered to pay more than $2.2bn to resolve claims of hiding its Actos diabetes medicine’s cancer risks in what would be one of the largest US settlements of patient lawsuits targeting drugs or devices, three people familiar with the matter said.Officials at Asia’s largest drugmaker propose to settle more than 8,000 lawsuits in federal and state courts in the US, said the people, who asked not to be identified because they weren’t authorised to speak publicly about 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-year litigation over the diabetes drug.A federal jury in Louisiana last year ordered Takeda and Eli Lilly & Co to pay a combined $9bn in damages to a shopkeeper who blamed Actos for causing his bladder cancer. That award, the seventh-largest in US history based on data compiled by Bloomberg, was later reduced by more than 99% to $36.8mn by a judge.“This is a strong signal that Takeda really wants to settle these cases so it can avoid any more huge verdicts,” 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’s chief executive officer, Christophe Weber, declined to comment in an interview in Osaka today, 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 $2.2bn proposal and continue negotiations on others, the people added.There’s opposition to Takeda’s settlement offer from some lawyers who have sued the drugmaker over Actos, the people familiar with it said. Some attorneys contend $2.2bn isn’t enough compensation for all patients who developed bladder cancer after taking the drug, the people said.Actos sales peaked in the year ended March 2011 at $4.5bn and accounted for 27% of Takeda’s revenue at the time, according to data compiled by Bloomberg. Actos has generated more than $16bn in sales since its 1999 release, according to court filings. Takeda now faces generic competition over the drug from Ranbaxy Laboratories.More than 3,500 Actos suits have been consolidated before US 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 to resolve a new wave of suits, the people 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 e-mail “But at least Takeda recognises 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 in Washington, to help negotiate the potential deal with lawyers for former Actos patients, the people said. Marvin helped negotiate a $4.85bn settlement with Merck to resolve about 30,000 lawsuits over its withdrawn painkiller Vioxx in 2007.Takeda has faced at least nine trials since 2013 over claims it hid Actos’s cancer risks, including the Louisiana trial. The company has won three defence verdicts and other damage awards against the drugmaker have been thrown out or are on appeal.Still, five juries that have reviewed the evidence of Takeda’s handing of Actos have held the company liable for consumers’ injuries.“If Takeda can settle the multidistrict cases for $2.2bn, they should sign the papers and leave town,” Erik Gordon a professor at the University of Michigan’s business and law schools who teaches about class-action settlements.