Actos Bladder Cancer Settlement Could Cost Takeda $2.7 Billion

Washington, DCIn what has been described as perhaps the largest settlement for a pharmaceutical drug that actively remains on the market, Takeda Pharmaceuticals of Japan will set aside as much as $2.4 billion to settle upwards of 9,000 pending lawsuits alleging Actos bladder cancer. The settlement could actually cost Takeda $2.7 billion, once costs are factored in.

As in most settlements, Takeda is not required to admit liability. On the surface, it appears that Takeda will be potentially spending $2.7 billion for the right to say it did nothing wrong. But of course, the issue is much more complex than that.

While there have been various Actos and bladder cancer lawsuits tried in state courts, the one and only Actos lawsuit tried in Louisiana federal court resulted in a verdict worth a combined $9 billion in punitive damages to the plaintiff against Takeda and Eli Lilly, which was initially involved in the marketing of Actos. The New York Times (4/28/15) reports that a judge later reduced that award to $36.8 million.

However, the writing was on the wall for Takeda: settle, or potentially spend billions more in costly litigation.

Critics are not crying for Takeda, given that Actos (pioglitazone) has achieved sales exceeding $24 billion since the Type 2 diabetes drug first went on the market in 1999, with no fewer than 100 million prescriptions written. The fortunes of Actos, which for years languished behind GlaxoSmithKline’s (GSK) Avandia, benefited from a reversal of fortune for Avandia when it was revealed several years ago that the GSK drug carried a high risk for cardiovascular issues.

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Actos also carries cardiovascular risks, but they were thought to be less prevalent than that of Avandia. Doctors switched their Type 2 diabetes patients to Actos in droves.

At the time, there was little, if any, awareness of any potential for Actos and bladder cancer risk.

That all changed in recent years, and in 2011, the US Food and Drug Administration (FDA) mandated a label update to Actos suggesting that use of Actos for Type 2 diabetes for a period of two years or more could foster a 40 percent increased risk for Actos bladder cancer, according to the New York Times.

By then, it was too late for many Actos patients. At least four years had gone by since the troubles for Avandia first surfaced and doctors switched their Type 2 diabetes patients to Actos. Type 2 diabetes is an ongoing, chronic condition for most once it surfaces, with medication required to manage blood sugar on an ongoing basis. Unlike taking an aspirin for a headache, patients unable to manage their Type 2 diabetes through diet and exercise are relegated to medicinal management. By 2011 - when the FDA-mandated label change took effect - patients having been switched to Actos in 2007 had blown past the two-year window of caution by another two years. For Actos patients on pioglitazone prior to that, the exposure has been even longer.

Plaintiffs say they were aware of the risk for Actos heart failure, but any risk for Actos bladder cancer was news to them.

Many an Actos bladder cancer lawsuit followed - about 9,000 to be exact. Now, those plaintiffs have the opportunity to settle and avoid the time and expense of litigation. For the Actos side effects settlement to become effective, the vast majority of plaintiffs - 95 percent - must agree to settle from a pool of funds reaching $2.37 billion. Should 97 percent of plaintiffs buy in, that figure will rise to $2.4 billion.

The New York Times notes that plaintiff attorneys are pleased that Takeda has stepped up to the plate. For its part, Takeda says it is settling to “reduce the uncertainties of complex litigation,” and adds that in its view the lawsuits are without merit and that the benefits of Actos continue to outweigh the risk.

Bloomberg (4/27/15), which first reported the settlement, says Takeda will take a $2.7 billion charge against earnings in the fourth quarter of fiscal 2014 to cover the costs associated with the proposed settlement. In taking the loss, it will be the first time Takeda will finish in the red since it was first listed on the Nikkei in 1949.

Observers of the Actos lawsuit portfolio will be watching to see how all this rolls out. Bloomberg reports that the settlement would offer in excess of $296,000 per case to those who sign up for the settlement - although that amount has the potential to be reduced depending on a patient’s age, smoking history and exposure to toxins, according to three people familiar with the deal who asked not to be identified because they weren’t authorized to speak publicly about the settlement.

The consolidated Actos cases in Louisiana are In Re Actos (Pioglitazone) Products Liability Litigation, 11-md-02299, US District Court, Western District of Louisiana (Lafayette).