Pharmaceutical giant, Pfizer announced that it had reached a settlement of lawsuit pending for over a decade involving two of its leading medications, Celebrex and Bextra. Celebrex and Bextra are classified as pain relievers. Unlike most pharma litigation, this class-action lawsuit was not brought by patients who used the medications. Rather, the lawsuit was pursued by investors. The company agreed to pay $486 million to the plaintiffs in the lawsuit.
The Plaintiffs in the Lawsuit
The plaintiffs in the class-action lawsuit were stockholders in Pfizer. They brought the lawsuit in 2004 alleging that the company did not properly advise them of the potential risks associated with Celebrex and Bextra.
As noted, this class-action lawsuit differs significantly from the typical personal injury litigation brought against big pharma. This lawsuit was brought under U.S. securities laws.
In order to be a plaintiff in the class-action lawsuit, an investor needed to own stock in Pfizer between October 31, 2001 to October 19, 2005. The complaint in the lawsuit specifically alleged that Pfizer consistently failed to provide investors with appropriate information about the risks of heart attacks and strokes associated with the medications. When this information ultimately was made public, Pfizer stock prices dropped, causing the investors to experience losses.
Research Studies on the Risks Associated with Celebrex and Bextra
As early as 1998, Pfizer had the results of research studies that indicated two possible major risks associated with the use of Celebrex and Bextra. Specifically, the initial research study at the end of the 20th century, and others that followed, revealed that Celebrex and Bextra potentially increased the risk of heart attack and stroke for some individuals taking the medications.
Loss in Value of Pfizer
When the public was advised of the risks associated with Celebrex and Bextra, in 2004, Pfizer experienced what can only be described as a major loss in market value. Indeed, beginning in October 2004 and up until the time the plaintiffs in the lawsuit were certified by the court, Pfizer lost a total of $70 billion in its company market value.
The Fate of Celebrex and Bextra
Celebrex remains on the market. It also has maintained its position as one of the better selling prescription medications manufactured by Pfizer.
Bextra did not share the same fate. Bextra was pulled from shelves and is no longer marketed by Pfizer in the United States. The company stopped sales of Bextra late in 2015.
Other Legal Action Against Pfizer
The class-action lawsuit is not the only legal challenges Pfizer has faced in regard to Celebrex and Bextra. After the class-action lawsuit commenced, the U.S. government launched an investigation into the manner in which Pfizer marketed these two medications. Ultimately, the government and Pfizer reached a settlement to conclude the investigation. The company paid $2.9 billion in order to settle the governmental investigation.
Overview of Judicial Proceedings
Pfizer actually initially prevailed in having the class-action lawsuit thrown out of court all together about four years prior to the settlement. However, the plaintiffs appealed. Ultimately, the U.S. Court of Appeals reinstated the case. Not long after the case was reinstated, the company reached the settlement with the plaintiffs.
Position of Pfizer Regarding the Settlement
Technically, the company did not confirm the settlement because it must be approved by the U.S. District Court Judge presiding in the case. Nonetheless, the company made it clear that no settlement should be construed as a sign of Pfizer admitting any wrongdoing.
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