USA — GSK, the pharmaceutical company facing claims that its drug Zantac caused cancer, has chosen to settle a crucial lawsuit instead of proceeding with a jury trial.
The settlement, described as “confidential,” was reached with the plaintiff, James Goetz, just days before the trial was scheduled to begin in a California court.
GSK emphasized that it does not admit any liability in the settlement and will continue to vigorously defend itself in other Zantac cases, relying on factual evidence and scientific findings.
Barclays analyst Emily Field highlighted the significance of the settlement, noting that the looming trial date had caused investor apprehension regarding GSK’s headline risk.
The settlement reflects GSK’s commitment to avoiding prolonged litigation
The decision to settle was motivated by GSK’s desire to avoid prolonged litigation and does not imply any acknowledgment of liability, as stated in their official announcement. This development had a positive impact on the company’s shares, which rose by nearly 6%.
Earlier attempts by GSK to halt the jury trial in the California court and prevent testimony from several expert witnesses called by the plaintiff were unsuccessful.
This setback was interpreted as a potential catalyst for numerous additional cases to be filed in state courts.
Goetz’s case is considered a bellwether among approximately 5,000 consolidated cases overseen by Judge Evelio Grillo at California’s Superior Court in Alameda, making it the first jury trial scheduled in the United States. Similar cases are pending in Illinois, Pennsylvania, and Delaware.
While GSK and other pharmaceutical companies, including Boehringer Ingelheim, Pfizer, and Sanofi, face thousands of Zantac-related lawsuits in the US, the majority of these cases are not expected to reach trial.
Several cases remain pending in California, but the bulk of the litigation, involving over 75,000 cases, is concentrated in Delaware state courts, with hearings anticipated in January.
The controversy surrounding Zantac, or ranitidine, emerged in 2020 when the FDA requested voluntary recalls of the drug and its generics due to the detection of high levels of a likely carcinogen in the pills.
Despite GSK’s assertion that there is insufficient evidence linking the medication to cancer, a Bloomberg report in February claimed that both the company’s own scientists and independent researchers had warned about the potential cancer-causing impurity.
GSK responded by criticizing the article as an “incomplete and biased presentation of facts.”
Initially, there were speculations of substantial settlement costs for GSK and other companies involved in the sale of ranitidine-based products.
However, key legal judgments have been favorable to the defendants, including a US federal court ruling in December 2022 that found no reliable evidence linking Zantac to the alleged injuries, resulting in the dismissal of approximately 50,000 federal claims.
In May, the Supreme Court of Canada reached a similar conclusion, stating that there was clear evidence that neither ranitidine nor NDMA is associated with cancer risk.
While the US federal court ruling remains open to appeal, GSK and other defendants believe that it significantly narrows the scope of the litigation.
Nevertheless, this judgment does not directly affect the thousands of cases, like Goetz’s, pursued in state courts.
Sanofi and Pfizer, also named in Goetz’s lawsuit, settled their cases with him last year without disclosing the settlement amounts.
In a recent development, an International Chamber of Commerce arbitral tribunal dismissed Boehringer Ingelheim’s claim seeking indemnification from Sanofi regarding potential liabilities associated with the Zantac litigation in the US.
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