Agreement aims to resolve a big portion of litigation in Delaware over discontinued heartburn drug
Oliver Barnes in New York and Ian Johnston
Pfizer has agreed to pay up to $250mn to settle more than 10,000 US lawsuits over cancer risks associated with its now-discontinued heartburn drug Zantac, according to people familiar with the deal.
The settlement — which was disclosed in a court filing in Delaware last week — is aimed at significantly reducing Pfizer’s potential liability. The New York-based drugmaker was set to pay plaintiffs between $200mn- $250mn to settle the cases, two people briefed on the deal said.
More than 70,000 cases have been brought against a host of drugmakers in the Delaware state court, while there are smaller numbers of cases in California, Illinois and Philadelphia, Pennsylvania.
Reaching a settlement is a means to reassure investors and avoid what could be protracted and expensive litigation. In 2022, companies linked to the drug lost a combined $40bn in value in a matter of days when an analyst note published by Morgan Stanley estimated potential liabilities of up to $45bn.
While the threat of liability has since been revised downwards, the prospect of expensive payouts has continued to weigh on companies’ share prices.
The exact settlement amount is not yet finalised as it is calculated on a per-plaintiff basis and depends in part on data collected by law firms on the usage years of people who took Zantac.
Pfizer, which sold Zantac between 1998 and 2006, said it continues to “vigorously defend against Zantac lawsuits, which we believe are not supported by reliable science”. It added that it “has explored and will continue to explore opportunistic settlements of certain cases if appropriate, and has settled certain cases”. Thousands of other plaintiffs are yet to settle with Pfizer.
“The company is confident that its Zantac products, which were reviewed and approved by the [US Food and Drug Administration], did not cause cancer when used as directed,” Pfizer added.
Separately, French drugmaker Sanofi settled 4,000 cases in March 2024, resolving all cases against it outside of Delaware, for an undisclosed amount.
Boehringer Ingelheim and GSK are also defending thousands of cases in state courts. Both drugmakers declined to comment.
A small Connecticut lab first identified “extremely high levels” of NDMA, a probable human carcinogen, in 2019 when it heated ranitidine, the active ingredient in Zantac. This prompted companies to suspend sales.
But companies facing parallel litigation in federal court received a boost when a judge in Florida rejected the findings of scientists on behalf of the plaintiffs, resulting in the dismissal of thousands of cases filed there, but litigation in state courts continues. A judge in Delaware state court is expected to decide soon whether to admit plaintiffs’ scientific evidence linking the drug to cancer.
GSK, which first received approval for Zantac in 1983 and is most exposed to the litigation, has already settled a handful of cases in courts in California. It disputes that the drug caused cancer. One jury trial over Zantac is ongoing in Illinois against GSK and Boehringer Ingelheim.
Fonte: FT