Pfizer, Inc., the world’s largest drug maker, says that it has settled almost half of the lawsuits over its menopause drugs. Additionally, the company reported that it also has increased the funds set aside to resolve the rest of the cases. This comes from information in the company’s regulatory filing with the SEC. Pfizer and its Wyeth and Pharmacia & Upjohn units have settled about 46 percent of the lawsuits alleging that the companies’ hormone-replacement medicines, including Prempro and Premarin, caused breast cancer. Pfizer reported to the SEC that it added $68 million to the $772 million it had previously reserved for the cases. Pfizer officials said in the filing:
We have recorded a charge of $260 million in the first nine months of 2011 that provides for the minimum expected costs to resolve all the remaining hormone-replacement actions.
More than 6 million women took Prempro and related menopause drugs to treat symptoms including hot flashes and mood swings before a 2002 study highlighted their links to cancer. Wyeth’s sales of the medicines exceeded $2 billion before the release of the Women’s Health Initiative study referred to above, which was sponsored by the National Institutes of Health.
Until 1995, many menopausal women combined Wyeth’s Premarin, an estrogen-based drug, with progestin-laden Provera, made by Pfizer’s Upjohn unit, to relieve their symptoms. Wyeth combined the two hormones in its Prempro pill. Pfizer acquired Wyeth in 2009. The companies hid from both the medical community and the public the fact that the drugs were increasing the risk of breast cancer for women.
There have been more than 10,000 claims filed in courts against the companies alleging that their menopause drugs caused breast cancer. Those lawsuits included more than 8,000 cases consolidated in federal court in Arkansas, as well as suits filed in state courts in Pennsylvania, Nevada and Minnesota. In May, Pfizer disclosed the $772 million reserve, saying that it had resolved a third of the cases, which would be about 3,300. The November filing indicated that Pfizer has now settled almost 5,000 of the suits.
Wyeth and Upjohn have lost ten of the 18 Prempro cases decided by juries since 2006. They resolved some of those cases by way of settlements. Other decisions against them are still on appeal. As reported in this issue, a Philadelphia jury ordered the Pfizer units to pay $72.6 million in compensatory damages to three women who blamed the drugs for their breast cancers. Pfizer agreed to settle the case before jurors were asked to decide whether the company should face punitive damages. The amounts of the settlements are confidential.
While the $260 million reserved by Pfizer may seem large, it’s not nearly enough. The reserve won’t provide enough money to cover settlements of all of the remaining outstanding claims. If cases are allowed to go to trial and result in large verdicts for the Claimants, the reserved amount definitely won’t be enough. Based upon the size of the jury verdicts to date, and the fact that multiple appellate courts have now affirmed some of those verdicts, this new amount of money set aside by Pfizer is grossly insufficient to resolve all of the remaining claims. Nevertheless, we are moving forward on behalf of the hundreds of Claimants who have valid claims.
Source: Bloomberg News
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