GSK states that the drug which is currently selling under the name Zantac 360 now uses an active ingredient which is different and includes no ranitidine.
The UK pharmaceutical giant, GlaxoSmithKline (GSK) has agreed to the settlement of $2.2 billion (£1.7bn). The drug-maker struck an agreement to make the payment in order to resolve litigation that was brought in the US over Zantac, a heart burning treatment.
GSK stated that it had reached settlements with ten plaintiff law firms that represent approximately 93%, or over 80,000, of the US state court product liability cases pending against it.
GSK did not accept guilt as part of the agreement, claiming in a statement that there was “no consistent or reliable evidence” that ranitidine, the drug’s primary ingredient, increased the risk of cancer. However, it stated that the agreements were in the company’s best long-term interest to prevent the danger of further litigation.
The lead attorney for the plaintiffs, Jennifer Moore and R. Brent Wisner stated in a joint statement that they were “thrilled” with the deal.
In a stock market on Wednesday the company made a statement that the total aggregate payment as a way to resolve all the accused cases is handled by plaintiff firms that meet established qualifying and participation standards.
Generically known as ranitidine the claimants have alleged their cancers linked to Zantac. Although GSK argued there was no valid evidence that suggested the increased cancer risk and the company has agreed to any liability in the settlements.
Zantac became the world’s best selling medicine in 1988 when it was first approved by the US regulators in 1983. The medicine was also one of the first to top $1 billion in annual sales. The drug was sold by different pharmaceutical companies GSK, Pfizer, Sanofi, and Boehringer Ingelheim at different times.
After the US Food and Drug Administration in 2020 asked manufacturers to pull off Zantac from the market, the lawsuits against the companies began piling up in both federal and state courts. Concerns were cited by the agency that ranitidine over time or when exposed to heat could degrade into NDMA, a carcinogen.
The law first is said to be suggesting to their clients unanimously that they accept the settlement. The settlement is expected to fully come into implementation next year by the end of the first half.
GSK also acknowledged that it has struck an agreement in principle to pay a total of $70 million to resolve the Zantac complaint originally brought by Valisure, an independent Connecticut-based laboratory that claimed their 2019 research proved that Zantac might produce the cancer-causing carcinogen NMDA. The agreement in principle is subject to final Department of Justice approval.
The settlement is expected to be welcomed by GSK shareholders after uncertainty over the Zantac litigation increased in June following a Delaware judge’s finding that certain scientific evidence was admissible, exposing the business to the potential of additional US jury trials.
The drug companies had sought to keep that testimony out saying it was not based on sound scientific evidence, which would have ended the lawsuits, and are appealing the judge’s ruling to the Delaware Supreme Court.
The firms gained a significant victory in 2022 when a Florida federal court judge determined that around 50,000 cases headquartered there could not proceed because the plaintiffs’ expert testimony was not supported by credible research. Approximately 14,000 of these cases are being appealed and are not included in Wednesday’s settlement.
The pharmaceutical GSK states that the drug which is currently selling under the name Zantac 360 now uses an active ingredient which is different and includes no ranitidine.
The company stated that it expects to recognise an incremental charge of £1.8 billion in its third-quarter results for 2024 related to the state courts settlement, the settlement agreement in principle, and the remaining 7% of pending state court product liability cases, which will be partially offset by the expected lower future legal costs.
GSK will cover the settlements with current resources and has no intentions to adjust its R&D spending plans.
