By Dietrich Knauth
(Reuters) - Rhode Island is set to square off on Monday against Teva Pharmaceutical Industries (NYSE:TEVA) Ltd, as a multibillion-dollar trial begins over whether the Israeli company contributed to an opioid crisis that has caused more than 500,000 deaths over the past two decades.
Rhode Island says Teva created a "public nuisance" by downplaying the risks of opioid addiction and promoting the off-label use of powerful fentanyl-based opioids that were approved only for certain types of cancer pain.
Rhode Island is seeking $5.9 billion from the companies, according to a Teva court filing. Rhode Island officials declined to comment on the specific amount.
Teva subsidiaries Actavis (NYSE:AGN) Pharma and Cephalon Inc are also defendants in the case in Rhode Island Superior Court in Providence.
The companies have denied the allegations, saying they sold drugs that were legal and approved for pain treatment.
In court filings by Teva, it calls Rhode Island's lawsuit an improper attempt to blame a wide-ranging public health crisis on "a small subset of opioid manufacturers" that make "niche" medicines like Actiq and Fentora. According to Teva's filings, those cancer drugs account for just 0.02% percent of all opioid prescriptions in the state since 1998.
The company also sells generic opioids such as oxycodone.
The Rhode Island lawsuit is one of more than 3,300 filed by state, local and Native American tribal governments across the country accusing drugmakers of minimizing the addictiveness of opioid pain medications. The lawsuits also accuse distributors and pharmacies of ignoring red flags that the drugs were being diverted into illegal channels.
The trial will begin as Teva attempts to negotiate a nationwide settlement of its opioid liability. After a recent $225 million settlement with the state of Texas, Teva Chief Executive Kåre Schultz told Reuters the company will likely end up paying $2.7 billion to $3.6 billion to resolve opioid claims.
Other defendants in the Rhode Island case settled before trial, including drug distributors McKesson Corp (NYSE:MCK), AmerisourceBergen (NYSE:ABC) Corp and Cardinal Health Inc (NYSE:CAH), which joined a nationwide $21 billion settlement.
Purdue Pharma LP, which was also a defendant, won initial approval last week for a $6 billion settlement funded by its Sackler family owners that would resolve litigation over its role in the opioid crisis.
The public nuisance theory has been used with mixed results in cases against other opioid distributors, manufacturers and pharmacies.
The Rhode Island trial comes more than two months after a New York jury found Teva liable for creating a public nuisance in the state. And a federal jury in November found that pharmacy chain operators CVS Health Corp (NYSE:CVS), Walgreens Boots Alliance (NASDAQ:WBA) Inc and Walmart (NYSE:WMT) Inc created a public nuisance in two Ohio counties, in the first trial against those companies over the opioid epidemic.
Damages have not yet been decided in either the New York or Ohio cases.
Courts in California and Oklahoma have ruled the other way, finding in favor of opioid defendants, including Teva and Johnson & Johnson (NYSE:JNJ), in public nuisance cases.