Japan’s largest drug-maker Takeda Pharmaceutical said yesterday that it has agreed to pay up to £1.55 billion to thousands of patients and their families over its diabetes drug Actos which has been linked to cancer.
Takeda has faced product liability lawsuits in the US involving about 9,000 people who used Actos to treat Type 2 diabetes but claim that the company failed to inform them of the drug’s cancer risks.
The company said the settlement would resolve most of the lawsuits though it does not admit liability.
The settlement will go into effect if 95 per cent of the litigants agree to the deal, and the company would pay £1.53bn. If the number of participants rises to 97 per cent or more, Takeda will pay £1.55bn. The amount would be split among the plaintiffs.
Takeda said the settlement is aimed at resolving the lawsuits more quickly and allowing the company to move on.
“Takeda’s decision to settle does not change the company’s continued commitment to Actos,” it said in a statement. “Actos continues to be available as a treatment option in the US, Japan and other countries.
“Takeda stands behind the substantial data that confirm a positive benefit/risk profile for Actos, which includes more than 14 years of clinical and patient experience with the product.
“The settlement will reduce financial uncertainties for the company and provides a significant degree of assurance toward resolving a high percentage of the Actos product liability claims.”
Then Takeda can focus on developing medicines, it said.
Takeda said it would set aside £1.75bn against earnings in the January-March quarter to cover the settlement and related costs.
It would cause the company a group net loss of £778 million for the business year ended 31 March, sending it into the red for the first time since its 1949 listing.
In one case, a jury in the US district court in western Louisiana last year ordered Takeda and its partner Eli Lilly and Co, which promoted the drug, to pay punitive damages, while awarding a patient and his family compensation for his bladder cancer linked to Actos, used to treat Type 2 diabetes. Following the companies’ challenge, a federal judge in October slashed the amount of payment. The companies have since appealed.
The settlement announced yesterday does not involve Eli Lilly.
In a 2011 drug safety update on Actos, the US Food and Drug Administration cited a 40 per cent increase in bladder cancer risk in people who used the drug for longer than a year. It ordered the cancer risk to be added to a warning label for the medicine, sold since 1999.
Takeda is still defending the drug, however, saying that the claims were “without merit”.
Actos used to account for up to a third of Osaka-based Takeda’s revenues and has generated more than £10.3bn in sales for the company since its release in 1999.
However the drug’s patent has since expired and Takeda is struggling to maintain sales in the face of generic copies created by its rival Ranbaxy.
Tokyo investors did not react to the news yesterday as the domestic financial markets were closed for a public holiday.