NEW YORK—In a move that mirrors Merck's model for settling its Vioxx lawsuits, Pfizer Inc. announced it reached an agreement that would settle, for $894 million, nearly 92 percent of the current claims against the company surrounding the use of its products Bextra and Celebrex. The settlement deal will resolve a host of legal claims against the company ranging from personal injury and class action lawsuits, as well as claims brought against the company by attorneys general from 33 states and the District of Columbia, according to Pfizer.
Like Vioxx, both Bextra and Celebrex are Cox-2 inhibitors that were targeted for personal injury lawsuits which claimed the drugs caused heart attacks and strokes. Bextra was pulled from the market in 2005 at the behest of the FDA, which cited its assertion that Bextra had no advantages over other products, while expressing concern it could have life threatening side-effects. Celebrex, however, is still actively marketed.
"We are pleased by the favorable rulings we have achieved in this litigation and believe that now is the right time to resolve these matters," says Amy W. Schulman, senior vice president and general counsel of Pfizer, in a statement announcing the settlements. "Inevitably, litigation can be distracting and putting these matters behind us helps our shareholders and, most importantly, patients and doctors."
The settlement also comes on the heels of both federal and New York State court rulings which held plaintiffs' lawyers failed to provide viable scientific evidence of increased risk of heart attacks or strokes for Celebrex at its most commonly prescribed dose. These findings are in line with findings by the FDA in 2005 that showed the benefits of Celebrex outweigh its risks for patients at approved doses.
"Pfizer stands by the safety and efficacy profile of Celebrex. It is one of the most rigorously and continuously-studied drugs in the world, as evidenced by its approval and use in 111 countries during the past 10 years across several different pain indications," says Joseph M. Feczko, chief medical officer for Pfizer, in a press release.
The $894 million in settlements are in three pieces. The bulk of the money, $745 million, is set aside to settle the 7,000 personal injury claims against the company. An additional $60 million will be paid to settle claims brought by the attorneys general, with the remaining $89 million earmarked for the class action claims of consumer fraud.
This settlement was termed a win for consumers by Hagens Berman, a Seattle-based law firm pursuing the class action and other personal injury claims.
"This is a victory for purchasers, including third-party payers and consumers across the country, who will receive monetary relief from the settlement," says Steve Berman, managing partner at Hagens Berman. "It is also an example of the critical role private litigation plays in holding pharmaceutical companies accountable in an era when the FDA can't or won't act as a watchdog."
Market analysts were somewhat dismayed by the settlement.
Credit Suisse analyst Catherine Arnold said in a Wall Street Journal article that "It's strategically disappointing they're writing a check for $900 million for a legal settlement [rather] than for buying up assets, which is what they need for future growth."
Further, Arnold noted it would be important for the company to reassure the market that it was committed to trimming top-line expenses in order to counteract declining sales of its drugs Lipitor and its smoking-cessation drug Chantix, which also has suffered from safety concerns.
Arnold may have gotten her wish shortly after the company announced the settlement, when Pfizer reported strong earnings, as well as plans to reduce its costs by $1.7 billion compared with its 2006 budget. DDN
Like Vioxx, both Bextra and Celebrex are Cox-2 inhibitors that were targeted for personal injury lawsuits which claimed the drugs caused heart attacks and strokes. Bextra was pulled from the market in 2005 at the behest of the FDA, which cited its assertion that Bextra had no advantages over other products, while expressing concern it could have life threatening side-effects. Celebrex, however, is still actively marketed.
"We are pleased by the favorable rulings we have achieved in this litigation and believe that now is the right time to resolve these matters," says Amy W. Schulman, senior vice president and general counsel of Pfizer, in a statement announcing the settlements. "Inevitably, litigation can be distracting and putting these matters behind us helps our shareholders and, most importantly, patients and doctors."
The settlement also comes on the heels of both federal and New York State court rulings which held plaintiffs' lawyers failed to provide viable scientific evidence of increased risk of heart attacks or strokes for Celebrex at its most commonly prescribed dose. These findings are in line with findings by the FDA in 2005 that showed the benefits of Celebrex outweigh its risks for patients at approved doses.
"Pfizer stands by the safety and efficacy profile of Celebrex. It is one of the most rigorously and continuously-studied drugs in the world, as evidenced by its approval and use in 111 countries during the past 10 years across several different pain indications," says Joseph M. Feczko, chief medical officer for Pfizer, in a press release.
The $894 million in settlements are in three pieces. The bulk of the money, $745 million, is set aside to settle the 7,000 personal injury claims against the company. An additional $60 million will be paid to settle claims brought by the attorneys general, with the remaining $89 million earmarked for the class action claims of consumer fraud.
This settlement was termed a win for consumers by Hagens Berman, a Seattle-based law firm pursuing the class action and other personal injury claims.
"This is a victory for purchasers, including third-party payers and consumers across the country, who will receive monetary relief from the settlement," says Steve Berman, managing partner at Hagens Berman. "It is also an example of the critical role private litigation plays in holding pharmaceutical companies accountable in an era when the FDA can't or won't act as a watchdog."
Market analysts were somewhat dismayed by the settlement.
Credit Suisse analyst Catherine Arnold said in a Wall Street Journal article that "It's strategically disappointing they're writing a check for $900 million for a legal settlement [rather] than for buying up assets, which is what they need for future growth."
Further, Arnold noted it would be important for the company to reassure the market that it was committed to trimming top-line expenses in order to counteract declining sales of its drugs Lipitor and its smoking-cessation drug Chantix, which also has suffered from safety concerns.
Arnold may have gotten her wish shortly after the company announced the settlement, when Pfizer reported strong earnings, as well as plans to reduce its costs by $1.7 billion compared with its 2006 budget. DDN
