The Opioid Settlements Being Paid in Naloxone Don’t Quite Add Up

May 7, 2024

Amneal Pharmaceuticals, a New Jersey-based manufacturer known for generics, has agreed to settle the 900-plus lawsuits alleging it failed to report “suspicious” orders for opioids. Over a 10-year period, states, counties, municipalities and Tribal Nations will receive $92.5 million in cash and an additional $180 million in naloxone. Or for recipients that don’t want the naloxone, 25 percent of its value in cash. They should take the cash.

Amneal is one of several pharmaceutical companies that manufactures a generic 4 mg naloxone nasal spray—functionally the exact same thing as the Narcan nasal sprays manufactured by Emergent BioSolutions, but less expensive than the name-brand version. After the first six years of the 10-year settlement term, Amneal will make remaining naloxone payments eligible for a cash conversion, up to $45 million total.

Amneal announced the “settlement in principle”—meaning the broad strokes have been agreed upon, with the understanding that some specifics won’t be known until later—on May 3 in its quarterly earnings report. As with similar agreements reached by other pharmaceutical companies, Amneal’s settlement includes “no admission of wrongdoing.”

The naloxone Amneal is offering instead of money is the same product it’s using in California, but the value is not the same.

In late April, Amneal’s generic 4 mg nasal spray was approved for over-the-counter sales, making it the second generic version of Narcan to go OTC, and the fourth OTC nasal spray in total. This didn’t attract much attention until April 29, when California Governor Gavin Newsom announced a partnership with Amneal to make the state’s naloxone budget go further. The current price of name-brand Narcan for public interest groups—syringe service programs, cops, schools, the California Department of Health Care Services—is $41 per kit, with each kit containing the standard two nasal sprays. Amneal will provide its nasal sprays at $24 per kit.

The naloxone Amneal is offering opioid settlement recipients instead of money is the exact same product it’s offering the state of California. If the company were valuing its settlement naloxone at $24 per kit, it would be paying out up to 7.5 million kits over the next 10 years. If it were valuing each kit at $41, it would be paying out almost 4.4 million kits.

But Amneal is using the wholesale acquisition price of $125—essentially the least generous way it could assign a monetary value, which means $180 million only buys 1.44 million kits.

This is still a much better deal than it might have been. In 2022, Teva Pharmaceuticals announced a similar agreement wherein it would settle all past, present and future opioid litigation for $4.25 billion, $1.2 billion of which was to be paid in naloxone.

Teva’s settlement used the same wholesale naloxone valuation of $125 per two-pack, which would buy 9.6 million kits. But it would only convert the naloxone to 20 percent of the value—maximum $240 million—to be paid out on a more convoluted schedule than what Amneal has agreed to.

Nasal spray products, no matter which ones, are all excessively expensive.

Teva was the first company to launch a generic version of Narcan, in late 2021.

It’s been nearly a decade since Emergent’s Narcan was approved as the first naloxone nasal spray product, and for most of that time it had no competition. Only in the past couple of years has the arrival of generic versions and OTC versions started to drive down the price; up until 2021, public interest groups were paying $75 per kit. The problem is that nasal spray products, no matter which ones, are all excessively expensive compared to the generic intramuscular naloxone these groups could be buying instead.

The way Amneal is choosing to value the nasal sprays, 25 percent of the $180 million would still buy more generic IM naloxone than the full 1.4 million kits Amneal is offering to begin with. The $45 million cash conversion, put toward IM naloxone, could theoretically mean the equivalent of more than 10 million kits. It won’t work out that way, and it’s always good idea for programs to have both IM and nasal sprays, but that’s an awful lot of naloxone to leave on the table..

There are a few overlapping reasons IM naloxone has never gotten the traction that Narcan has—needle stigma; cop culture; heavy lobbying by Emergent—but some of it is just inertia. Once the Amneal agreement is finalized, jurisdictions it’s settling with may be able to opt for a mix of naloxone and cash. Some might find that the cash gives them options too.



Image (cropped) via United States Department of Veterans Affairs

Kastalia Medrano

Kastalia is Filter's deputy editor. She previously worked at a number of other media outlets and wouldn’t recommend the drug coverage at any of them. When not at Filter, she works with drug users in NYC and drug checkers in North Carolina to track hyperlocal supply changes, and cohosts a national stimulant users call with Isaac Jackson.

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