GSK Settles 80,000 Zantac Cases for $2.2B

GSK announced yesterday that it will be dishing out $2.2 billion to resolve thousands of lawsuits related to its former heartburn medication, Zantac (ranitidine).

The settlement marks the conclusion of a long and complex legal battle, with claims that the medication caused cancer due to the presence of a potentially harmful impurity.

After years of legal wrangling, GSK has agreed to pay $2.2 billion to settle a significant portion of these claims — 80,000 cases, or 93 percent of total US state court product liability cases, to be exact.

The settlement covers a broad array of state and federal lawsuits in the US, as well as certain international cases.

While this $2.2 billion settlement resolves a large portion of the Zantac-related litigation, it does not end the legal proceedings entirely. Some cases remain unresolved, and other manufacturers who sold Zantac, such as Sanofi, Pfizer and Boehringer Ingelheim, continue to face their own legal challenges related to the drug.

GSK also announced it has reached a preliminary agreement to pay a total of $70 million to settle the Zantac qui tam complaint previously filed by Valisure, a Connecticut-based laboratory that first flagged Zantac’s risks in 2019 during routine batch testing. The settlement is pending final approval from the Department of Justice.

Additionally, Valisure filed a complaint on behalf of US taxpayers and 25 states, alleging that GSK “knowingly and deliberately misled the FDA (US Food and Drug Administration)” in order to get Zantac approved back in 1983.

Since its approval, Zantac became one of the most popular medications for the treatment of heartburn, acid reflux and related conditions. It was available in both prescription and over-the-counter forms and generated significant revenue for its manufacturers.

GSK was one of the key companies that marketed the drug, though several other pharmaceutical firms, including Sanofi, Pfizer and Boehringer Ingelheim, have also been involved in its production and distribution over the years.

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The trouble for Zantac began in 2019, when testing by an independent laboratory revealed that ranitidine-based drugs could contain unsafe levels of N-nitrosodimethylamine (NDMA), a chemical classified as a probable human carcinogen. Following this discovery, the FDA and regulatory agencies around the world issued warnings, and Zantac was eventually pulled from the market.

In 2020, the FDA ordered all companies to remove Zantac and any of its generics from the market after confirming its main ingredient could potentially convert into a carcinogen over time or when exposed to high temperatures. Zantac has since been reintroduced with a new formulation that no longer contains ranitidine.

In the statement, GSK said it “has not admitted any liability in the State Courts Settlement or in the agreement in principle for the Qui Tam Settlement.”

Furthermore, the pharmaceutical giant noted, “the scientific consensus remains that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer.”

Nevertheless, GSK said it “strongly believes that these settlements are in the best long-term interests of the company and its shareholders as they remove significant financial uncertainty, risk and distraction associated with protracted litigation.”

The settlement costs will be funded through existing resources, according to GSK, with no changes to the company’s “growth agenda or investment plans for R&D as a result of these settlements.”

This agreement aligns with a similar settlement made by Sanofi earlier this year. According to a Bloomberg report from April, the French pharmaceutical company agreed to pay $100 million to resolve around 4,000 Zantac claims, with each plaintiff receiving approximately $25,000. In comparison, GSK’s settlement amounts to about $27,500 per claimant.

In 2022, some of the companies involved in federal litigation secured a victory when a Florida district judge dismissed the scientific basis behind claims that Zantac could cause cancer. The ruling relieved the companies from having to defend approximately 50,000 consolidated cases in the Florida federal court.

In line with the ruling in Florida, in August this year, the Delaware Supreme Court agreed to review a Superior Court decision that had allowed expert testimony supporting the lawsuits GSK faced in the state.

GSK said this will cause “an incremental charge in its Q3 results for 2024 of £1.8 billion ($2.3 billion) in relation to the State Courts Settlement, the Qui Tam Settlement and the remaining seven percent of pending state court product liability cases, partially offset by expected reduced future legal costs.”

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