• 21
  • September
    2011

In one of our recent posts, we wrote about a second lawsuit against Israel-based generic drug maker Teva Pharmaceutical Industries Ltd. in which the company was accused reusing tainted vials of the anesthetic propofol, which caused colonoscopy patients to develop hepatitis. As we noted, current and former distributors of the drug, Baxter International Inc. and McKesson Corp, were also implicated.

Propofol is used in the induction and maintenance of general anesthesia, sedating mechanically ventilated adults, and in procedural sedation. Teva stopped manufacturing propofol on June 4, 2010, citing ongoing difficulties in processing the drug as well as pending lawsuits involving the same. Numerous generic versions of the drug exist.

Last week, Baxter won a bid to force Teva to pay the costs of defending against Nevaa lawsuits in which plaintiffs allege the company's actions made them develop hepatitis. In a September 15 ruling, a Delaware Chancery Court Judge said that an arbitration panel found Teva is obligated under an agreement to cover all liability stemming from the claims.

The indemnity agreement, which requires Teva to reimburse Baxter for "all claims, damages, liability or losses" from the propofol cases, was concluded to be "valid and enforceable." A Law Vegas jury will be considering the agreement as evidence in the trial of several propofol cases.

After the decision was issued, Teva shares dropped 1.3 percent to 136.50 shekels, the lowest they've been since January 2007. In total, the stock has dropped 27 percent this year.

Source: Bloomberg, "Teva Drops to Lowest Since January 2007 After Court Ruling," Claudia Maedler, Sep 21, 2011.