Teva Settles 'Vast Majority' Of Propofol Vial/Hepatitis C Infection Cases In Nevada

Teva Settles 'Vast Majority' Of Propofol Vial/Hepatitis C Infection Cases In Nevada

NORTH WALES, Pa. - (Mealey's) Teva Pharmaceuticals Industries Ltd. has agreed to settle "the vast majority" of its propofol vial/hepatitis C cases, a company spokesperson said Feb. 21.


Teva did not disclose the amount of the settlement or the number of cases settled.  However, the company previously disclosed that it had created a reserve of $270 million for settled cases, spokesperson Denise Bradley told Mealey Publications.  

Bradley said Teva will take an additional charge of about $15 million this quarter. 

"Teva is pleased to have put the vast majority of these matters behind us," Bradley said.   

$505M Appeal Settled 

In Teva's Form 20-F report to the U.S. Securities and Exchange Commission dated Feb. 17, the company said that in 2011 it reached agreements to settle the majority of hepatitis C cases. 

On Feb. 17, Teva and Henry Chanin, the first plaintiff to go to trial, told the Nevada Supreme Court that they had agreed to settle the company's appeal of a $505.3 million compensatory and punitive damages verdict (Teva Parenteral Medicines, Inc., et al. v. Henry Chanin, et al., No. 57085, Nev. Sup.). 

Plaintiffs in general sued Teva, subsidiary Sicor Pharmaceuticals Inc. and distributor Baxter Healthcare Corp. in Nevada's Clark County District Court.  They allege that they became infected with hepatitis C because Teva only sold so-called "jumbo" vials of the general anesthetic drug propofol to colonoscopy clinics. 

Teva is indemnifying Baxter. 

Vials Contaminated, Reused 

The plaintiffs allege that although the large vials were labeled to be used on only one patient, the large volume of anesthetic encouraged health care practitioners to use the vials on multiple patients.  They allege that when propofol was used for multiple patients, the vials became contaminated if one of the first patients was infected with the hepatitis C virus. 

In May 2010, a Clark County jury awarded Chanin and his wife, Loraine, $5.35 million in compensation and $500 million in punitive damages.  Teva appealed, and the Supreme Court scheduled arguments for April 3. 

In January, however, the Chanins asked the Supreme Court to order a global settlement conference, citing subsequent plaintiff verdicts stemming from the same set of facts.  On Jan. 23, the high court authorized a mandatory global settlement conference conducted by Senior Judge Stewart Bell. 

The U.S. Chamber of Commerce and the Las Vegas Sands Corp., a casino resort company based in Las Vegas, filed amicus briefs in the Chanin appeal. 

Mensing Preemption Limited 

In August, a judge in the Clark County court said that the U.S. Supreme Court's generic drug preemption ruling a few months earlier did not preempt claims by hepatitis C plaintiffs that generic drug makers could have sent out "dear doctor" letters warning health care practitioners about the risk of infection from jumbo vials. 

In the second trial, a Clark County jury in October awarded three plaintiffs $20.1 million in compensatory damages and $182.5 million in punitive damages.  That same month, another jury awarded another plaintiff and his wife $10 million in compensatory damages and $90 million in punitive damages. 

Another trial began in October but was stayed while the Nevada Supreme Court considered a change-of-venue appeal.  The trial resumed in January, but sessions have not taken place for most of February.  

In May 2010, Teva said it discontinued marketing propofol, saying the generic drug was not profitable. 

Chanin Counsel 

Teva is represented in the Chanin appeal by Daniel F. Polsenberg and Joel D. Henriod of Lewis & Roca in Las Vegas; Matthew E. Papex and Philippa Scarlett of Kirkland & Ellis in Washington, D.C.; Jay P. Lefkowitz of Kirkland & Ellis in New York; Mark E. Tully and U. Gwyn Williams of Goodwin & Proctor in Boston; and Alan M. Dershowitz of Cambridge, Mass. 

Chanin is represented by Robert T. Eglet, Robert M. Adams and Artemus W. Ham of Mainor Eglet and Will S. Kemp of Kemp, Jones & Coulthard, both in Las Vegas. 

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