Equities

Pfizer's $250M Deal to Settle Zantac Lawsuits

Pfizer to pay up to $250 million to settle over 10,000 Zantac-related cancer lawsuits in the U.S.

By Jack Wilson

5/16, 00:16 EDT
GSK plc
Pfizer, Inc.
Sanofi
article-main-img

Key Takeaway

  • Pfizer agrees to pay up to $250 million to settle over 10,000 US lawsuits claiming Zantac cancer risks, aiming to reduce liability.
  • The broader Zantac litigation involves more than 70,000 cases and has impacted the market value of involved drugmakers by $40 billion.
  • Despite settlements, Pfizer and other companies like Sanofi and GSK continue to defend against claims, emphasizing FDA approval and disputing scientific evidence linking Zantac to cancer.

Pfizer Settles Zantac Lawsuits

Pfizer has reached a settlement agreement to pay up to $250 million to resolve over 10,000 lawsuits in the United States. These lawsuits allege cancer risks associated with Zantac, a heartburn medication that Pfizer discontinued. The settlement, disclosed in a Delaware court filing, aims to significantly mitigate Pfizer's potential liability, with the payment to plaintiffs estimated between $200 million and $250 million. This move comes as part of Pfizer's efforts to reassure investors and circumvent potentially lengthy and costly litigation.

Broader Litigation Landscape

The Zantac litigation encompasses more than 70,000 cases filed against various drugmakers in Delaware state court, with additional lawsuits in California, Illinois, and Philadelphia, Pennsylvania. In 2022, companies associated with Zantac experienced a sharp decline in market value, losing $40 billion collectively after a Morgan Stanley analyst note projected potential liabilities up to $45 billion. Although the liability threat has been adjusted downward, the prospect of substantial payouts continues to impact the share prices of the involved companies.

Scientific Dispute and Defense

Pfizer, which marketed Zantac from 1998 to 2006, maintains a strong defense against the lawsuits, asserting that the claims are not backed by credible science. The company emphasizes that its Zantac products were approved by the US Food and Drug Administration (FDA) and did not cause cancer when used as directed. Pfizer has also indicated its openness to "opportunistic settlements" where appropriate and has already settled certain cases. The final settlement amount is contingent on various factors, including the usage duration of individuals who took Zantac.

Other Companies and Legal Developments

In addition to Pfizer, other pharmaceutical giants like Sanofi, Boehringer Ingelheim, and GSK face thousands of Zantac-related lawsuits. Sanofi recently settled all its cases outside of Delaware, while Boehringer Ingelheim and GSK continue to defend against claims in state courts. The litigation landscape saw a significant turn when a Florida judge dismissed thousands of federal cases, challenging the plaintiffs' scientific evidence. However, state court litigations, including a pivotal decision in Delaware on the admissibility of scientific evidence linking Zantac to cancer, persist.

Management Quotes

  • Pfizer:

    "Vigorously defend against Zantac lawsuits, which we believe are not supported by reliable science... has explored and will continue to explore opportunistic settlements of certain cases if appropriate, and has settled certain cases." "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."