Tuesday Senator Claire McCaskill lambasted Teva (TEVA) for stonewalling her inquiry into the company’s development and sales of opioids:
U.S. Senator Claire McCaskill blasted Teva Pharmaceutical Industries today, following the company’s repeated refusal to turn over information related to her committee investigation into the role opioid manufacturers and distributors play in the ongoing opioid public health crisis.
“Teva’s refusal to cooperate with Congressional requests strongly suggests they have something to hide,” McCaskill said. “I’d hope that everyone involved or associated with the company takes note that they’re dealing with an entity that’s stonewalling a Senate investigation examining a national public health crisis. Teva has been an outlier throughout our investigation, and they can rest assured that I’ll continue to pursue every possible avenue to get them to comply for as long as it takes.”
The senator originally requested information from Teva, Mallinckrodt (MNK), Allergan (AGN) and Endo (ENDP), amongst others, last year. The senator has sent a follow up request and a letter to Teva allegedly discussing her concerns about the company’s attempts to obstruct the investigation. Per CNBC’s Meg Terrill, this was Teva’s recent response to Senator McCaskill’s claims it may have “something to hide”:
The response gives assurances of Teva’s attempts to cease promotion of opioids. However, the point of the investigation is to provide Senator McCaskill with the necessary information so she and her staff can independently assess Teva’s role in the sale and marketing of opioids. The longer this public tete-a-tete goes on the worse it could get for Teva.
The Situation
America has an opioid crisis. The number of accidental deaths related to opioids and the number of people addicted to them continue to rise. Some believe the statistics are driven by the proliferation of opioid prescriptions. According to The Economist, between 1991 and 2011, opioid prescriptions supplied by retail pharmacies increased from 76 million to 219 million – a 5.4% CAGR. Several state attorneys general believe drug makers have in certain instances fraudulently misrepresented the serious side effects of opioid use.
The opioid crisis has drawn the attention of everyone from President Trump to state attorneys general. So far Senator McCaskill’s due diligence has borne fruit. In September McCaskill detailed how Insys Therapeutics (INSY) spiked approval of its fentanyl drug Subsys for inappropriate off-label use. McCaskill also introduced legislation to repeal a 2016 law that reportedly curtailed the Drug Enforcement Administration’s (“DEA”) ability to bring enforcement action against opioid distributors.
It appears that Senator McCaskill not only wants to perform due diligence on the role of drug manufacturers and distributors in the opioid crisis, but she is willing to bring enforcement action against wrongdoers. McCaskill also has a reputation for delivering results. In October she drafted a bill to thwart the transfer of Allergan’s (AGN) Restasis patents to the St. Regis Mohawk Tribe. The patent transfer was designed to undermine an inter partes review (“IPR”) from Mylan (MYL). Last month the Trial And Appeal Board (“PTAB”) of the U.S. Patent And Trademark Office ruled the Mohawks could not claim sovereign immunity to void the IPR, weakening Allergan’s defense. By shining a light on Allergan’s patent ruse Senator McCaskill may have strengthened the PTAB’s resolve in rendering denying sovereign immunity pursuant to the IPR.
