Takeda to pay $2.7bn to settle Actos cancer claims

In one of the largest product liability settlements to date, Takeda Pharmaceutical has agreed to pay $2.7bn over claims that its blockbuster diabetes drug Actos causes bladder cancer.

The settlement comes a year after a jury in Louisiana awarded $9bn against Takeda and its partner Eli Lilly for concealing possible health risks linked to Actos.

In a trial reminiscent of a John Grisham novel, the judge criticised Takeda over a large number of missing documents, and the jury awarded huge punitive damages.

The $9bn was cut to $36.8m on appeal, but Japan's largest pharmaceutical company kept losing lawsuits over Actos, with thousands more outstanding. That heightened pressure for a settlement.

The agreement highlights the huge potential cost to companies from product liability lawsuits in the US as well as the vexed safety record of some of the world's biggest prescription drugs.

In 2007, Merck paid $4.85bn to settle claims its anti-inflammatory drug Vioxx caused heart attacks, while GlaxoSmithKline paid $3bn to the US Department of Justice in 2011 to settle a case over its diabetes drug Avandia.

Takeda said that the claims were without merit and it did not admit liability. The company said that Actos would remain available as a treatment for diabetes.

"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," said the drugmaker.

Actos was once the world's best-selling diabetes drug, with peak sales of $4.5bn a year. Takeda has struggled since Actos went off-patent and the settlement will drag the group to its first annual loss - which the company forecast at Y145bn - since it listed in 1949.

Takeda will pay $2.37bn into a fund once 95 per cent of current litigants agree to the settlement. That will rise to $2.4bn if 97 per cent of litigants agree. The final $300m will cover the cost of defending the remaining cases.

The settlement is a major step for chief executive Christophe Weber - the first foreigner to run Takeda in its 230-year history - as he seeks to turn the company round.

The Louisiana jury found the company knew the risks of Actos and covered them up. "The breadth of Takeda leadership whose files have been lost, deleted or destroyed is, in and of itself, disturbing," ruled Rebecca Doherty, US district judge.

"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," said the company.

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