Takeda Pharmaceutical Co., Japan's largest drugmaker, said Wednesday that it has agreed to pay up to $2.4 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 U.S. involving about 9,000 people who say 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 percent of the litigants agree to the deal, and the company would pay $2.37 billion. If the number of participants rises to 97 or more, Takeda will pay $2.4 billion. 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. "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 $2.7 billion against earnings in the January-March quarter to cover the settlement and related costs.
It would cause the company a group net loss of $1.2 billion for the business year ended March 31, sending it into the red for the first time since its 1949 listing.
In one case, a jury in the U.S. 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-two diabetes. Following the companies' challenge, a federal judge in October slashed the amount of payment. The companies have since appealed.
The settlement announced Wednesday does not involve Eli Lilly.
In a 2011 drug safety update on Actos, the U.S. Food and Drug Administration cited a 40 percent 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.
