New York Attorney General Letitia James announced Monday that her office has uncovered evidence that “Teva Pharmaceuticals lied to evade accountability for the opioid crisis in New York.”
James is holding Teva Pharmaceutical Industries, Ltd. — the Israel-based parent company of Teva Pharmaceuticals USA — accountable for its role in the opioid crisis.
In a motion by order to show cause, James claims that Teva Pharmaceutical Industries, Ltd. (Teva Parent) made “significant and intentional misrepresentations to the Office of the Attorney General (OAG) and the court” about its involvement with Teva Pharmaceuticals USA (Teva USA) and role in the opioids industry in the United States “in order to evade legal action and accountability,” her office said.
“New evidence uncovered by OAG shows that, despite sworn testimony provided to the court that Teva Parent transacted no business in the United States, held no property in the United States, and had no role in its American opioids business, Teva Parent was a primary decision maker for its American subsidiary, maintained property and employees in the country, and exerted control over its finances,” James said.
“In fact, Teva Parent use a complex web of shell corporations to transfer significant funds out of Teva USA and into offshore accounts it owns and controls.”
James argued that for those reasons, the court should vacate its previous dismissal of Teva Parent from OAG’s opioid litigation to allow OAG an opportunity to examine Teva Parent’s real role in the opioid crisis and whether it compromises Teva USA’s ability to pay New York state by improperly transferring billions of dollars out of the company.
The OAG is seeking further discovery into Teva USA to ensure that any forthcoming judgment stemming from a December 2021 jury decision that found Teva USA harmed New Yorkers and violated the state’s public nuisance laws will be paid.
“We have already been successful in demonstrating the harm that Teva USA and others inflicted on New Yorkers, but this new evidence shows an even greater disregard for the pain and destruction that that this company fueled,” James said.
James filed a lawsuit against the manufacturers and distributors of opioids in March 2019 for their role in fueling the opioid crisis.
Teva Parent successfully removed itself from the litigation by arguing to the court that it had “no office, property, employees, or registered agent in the United States and does not transact business in the United States,” leaving its American subsidiary Teva USA as the head Teva defendant in OAG’s lawsuit.
“In its decision to dismiss OAG’s claims against Teva Parent, the court relied exclusively on representations made by Doron Herman, Senior Vice President and “Head of Tax” at Teva Parent.
“However, OAG uncovered evidence that clearly contradict many of Mr. Herman’s statements and basic premise, including multiple legal filings where Teva Parent has admitted, among other things, that it was in fact a “multinational pharmaceutical company that develops, manufactures, and distributes a broad portfolio of pharmaceutical products in the United States and abroad,” and that it directly operated certain facilities in the United States” James said in a news release.
“In that sworn affidavit, Mr. Herman made several other clear misrepresentations to the court, including that Teva Parent was never involved in manufacturing, promoting, or selling opioids in the United States; did not control the day-to-day activities of Teva USA or Cephalon; and that Teva Parent did not control either subsidiaries’ finances.
“Teva Parent was integrally engaged in the American opioid business and controls its American subsidiaries in every material way,” she contended.
“Teva Parent oversaw the launch of certain opioid lines in the United States, managed decisions about whether to ship suspicious orders, routinely traveled to the United States to meet with senior federal government officials in connection with their opioid products and conducted opioid-focused meetings with American physicians in the United States.”
The attorney general added that OAG also obtained a forensic analysis of Teva USA and Teva Parent’s financial relationship, which “demonstrated that Teva Parent moved billions of dollars from Teva Parent’s American subsidiaries to offshore accounts and obtained substantial tax benefits in the United States and Israel by claiming that it managed and operated all of its subsidiaries.”
James won the opioid trial against Teva USA late last year.
