UK (Commonwealth) _ GSK, a major pharmaceutical company in the UK, has agreed to pay up to $2.2 billion (£1.68 billion) to resolve thousands of complaints in US courts over allegations that cancer was caused by a discontinued version of its heartburn medication Zantac.
The company declared that agreements had been struck with ten legal firms on behalf of almost eighty thousand plaintiffs. Ninety-three percent of the cases are settled.
Additionally, GSK has agreed to pay $70 million to settle a laboratory’s whistleblower lawsuit, which claimed the pharmaceutical company had deceived the US government by hiding Zantac’s carcinogenic dangers. In all of the cases, GSK refuted any misconduct.
Although there is “no consistent or reliable evidence” that the medicine increases the risk of cancer, the firm stated in an investor statement that the settlements “remove significant financial uncertainty.”
In the US, Zantac was originally authorized for sale in 1983. It became the best-selling medication in the world in five years, with yearly sales exceeding $1 billion.
Because of concerns that one of the medication’s main ingredients, ranitidine, would transform into a chemical that could cause cancer when heated, US regulators removed Zantac from store shelves in 2020.
Tens of thousands of lawsuits against the drug’s producers resulted from such action.
Doctors in the UK were instructed to cease prescribing four different varieties of Zantac as a “precautionary measure” the year prior.It happened in response to worries expressed in a number of nations that the products might be tainted.
In addition to GSK, Pfizer, Sanofi, and Boehringer Ingelheim are other well-known pharmaceutical companies that have marketed the medication. Sanofi and Pfizer have both consented to litigation settlements. The one exception is Boehringer Ingelheim. It hasn’t disclosed any significant agreements. A medication known as Zantac 360 is still on the market today; it doesn’t include ranidine.
GlaxoSmithKline (GSK)’s stock price increased by more than 6% following the company’s announcement that tens of thousands of US lawsuits pertaining to its heartburn medication Zantac had been resolved for up to $2.2 billion (€2.01 billion).
The medication, which is currently off the market, was accused of causing cancer on multiple occasions. Approximately 80,000 claimants, or 93% of the cases that GSK handled, are covered by the settlement.
An additional $70 million (€64 million) will be paid to settle a whistleblower complaint made by the US independent laboratory Valisure. The complaint alleges that GSK deceived the US government by concealing the risk that Zantac could cause cancer.
The whistleblower agreement is a Financial Conduct Authority (FCA) “Qui Tam” settlement, which permits informants to bring legal action on behalf of the United States government.
Zantac was one of the world’s best-selling medications when it was originally introduced in the US in 1983, with sales of over $1 billion (€0.91 billion) annually. Additionally, Pfizer, a significant US pharmaceutical business, Germany-based Boehringer Ingelheim, and French pharmaceutical giant Sanofi sold it.
However, the drug’s appeal has waned recently. This was brought on by growing concerns that, if the medication was kept at a higher temperature or kept on store shelves for an extended period of time, its primary active ingredient, ranitidine, would transform into the carcinogen N-nitrosodimethylamine (NDMA).
Due to this, several ranitidine manufacturers in the UK voluntarily recalled the medication back in 2019, and the European Union and Australia followed suit. In 2020, the US Food and Drug Administration (FDA) also issued a recall for Zantac.
Strongly disputing these allegations, GSK continues to assert that it is not at fault and that it is not able to rely on expert testimony regarding Zantac’s carcinogenic hazards.
In a news release about the settlement, GSK stated that the scientific community is still in agreement that there isn’t any solid or consistent proof that ranitidine raises the risk of any kind of cancer. GSK is adamant that these agreements, which eliminate the substantial risk of financial uncertainty and distraction associated with drawn-out litigation, are in the best long-term interests of the business and its shareholders.
Regarding the State Courts Settlement, the Qui Tam Settlement, and the remaining 7% of active state court product liability lawsuits, GSK plans to recognize an incremental charge in its Q3 Results for 2024 of £1.8 billion (€2.15 billion), partially offset by anticipated lower future legal costs.
The funds that are currently available will be used to pay for these settlements. The development goal and R&D investment plans of GSK remain unchanged in light of these settlements.”
