The issue of using opioids in pain management has proven a controversial one. While there’s little doubt they work, their potentially addictive nature has presented a serious problem to address. Healthcare stocks like AbbVie (NYSE:ABBV), Teva Pharmaceutical (NYSE:TEVA), CVS Health (NYSE:CVS), and Walgreens Boots Alliance (NASDAQ:WBA) have been put on the hook accordingly, and the latest step forward has hurt many of their stocks today.
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The national settlement between state governments and opioid producers/handlers have come one step closer to complete today as New York’s Attorney General Letitia James produced final approval for a national settlement valued at $17.3 billion. Of that, New York will be in line for a little over $1 billion, with Teva kicking in $523 million and over $548 million coming from CVS and Walgreens. New York plans to use the billion-plus for “…opioid abatement, education, and treatment efforts.”
Further, the companies involved have agreed to several other points as well. Teva will no longer be allowed to market opioids in the state and will be monitored by the state in a bid to “prevent misuse” of opioids. CVS and Walgreens, meanwhile, have similarly agreed to report and share information about prescriptions for opioids with the Attorney General’s office. Meanwhile, Walmart (NYSE:WMT) is said to be next on the block, with an agreement to come in the next several weeks.
The announcement didn’t move stocks much in either direction; Teva took it the hardest, down 1.15% in Friday afternoon trading. But it also has the greatest upside potential, with its average price target of $10.75 yielding 47.16% upside potential. Meanwhile, the lowest upside also came out the best; AbbVie added 0.78% in Friday afternoon’s trading, but its $165.88 average price target left it with 19.59% upside potential.
