Pfizer said Friday it had agreed to set aside $894 million to settle virtually all the lawsuits related to its withdrawn painkiller Bextra as well as a similar drug that remains on the market, Celebrex, four years after concerns about cardiovascular risks of such drugs became widely publicized.
Celebrex is still being sold years after cardiovascular concerns were first raised.
The announcement comes approximately one year after Merck announced a $4.85 billion reserve to settle litigation involving the similar painkiller Vioxx, which Merck pulled off the market in September 2004 after studies linked it to strokes and heart attacks.
Pfizer withdrew Bextra seven months later, but left Celebrex on the market, contending that it was less dangerous — a decision that was supported by the Food and Drug Administration on the overwhelming recommendation of a federal advisory panel.
In 2007, worldwide sales of Celebrex were $2 billion.
In a news release announcing the settlement, Pfizer’s general counsel, Amy W. Schulman, said the agreements would allow the company to focus on its core business. “Inevitably, litigation can be distracting and putting these matters behind us should better enable physicians to consider Celebrex purely on the strength of its clinical data and its ability to meet the diverse needs of patients in pain.”
Pfizer shares closed down 6 cents on Friday, at $16.91.
Plaintiffs’ lawyers had filed lawsuits at the state and federal levels against Pfizer, claiming that both drugs had harmed people who took them. Pfizer would not disclose how many total cases it was settling or what percentage of them involved Bextra, but they were believed to be the large majority.
In addition to cardiovascular risks associated with Bextra, it was linked to serious cases of Stevens-Johnson syndrome, a debilitating and sometimes fatal disorder that causes sloughing of the skin. Cases involving the rare disorder, known as SJS, were not covered in the settlement agreements announced Friday; these cases have generally already been settled.
The settlement Pfizer announced Friday follows two key court rulings in the last year that were favorable to the company, which is based in New York.
In November 2007, United States District Judge Charles R. Breyer, in San Francisco, ruled that the plaintiffs had not offered adequate scientific proof that the 200-milligram dose of Celebrex — the most commonly prescribed dose — had caused heart attacks and strokes.
As a result of that ruling and a similar state-level decision by New York Supreme Court Judge Shirley Kornreich, many lawyers dropped clients who claimed they suffered heart attacks or strokes after taking the 200-milligram dose.
That meant that Pfizer’s Celebrex liability was limited, although some patients — those who had taken the 400-milligram dose — still had claims.
Vioxx, Celebrex and Bextra all belong to a category of drugs known as Cox-2 inhibitors.
A large study led by doctors at the Cleveland Clinic and paid for by Pfizer is under way to determine whether Celebrex, the only drug in the Cox-2 inhibitor class that remains on the market, carries any more cardiovascular risk than other widely used painkillers.
The drug’s labeling information currently includes a boxed warning of possible cardiovascular risks, but similar warnings are also required on two over-the-counter painkillers: ibuprofen, sold as Advil and other brands, and naproxen, of which Aleve is perhaps the best-known brand.
Daniel Becnel, a plaintiff’s lawyer in Reserve, La., who represents more than 150 patients, said he was pleased with the Pfizer settlement.
Pfizer had discussed settling many of the cases over the last two years, but Mr. Becnel said it was not until the Feinberg Group law firm got involved that settlement discussions began in earnest. The firm, based in Washington and New York, is known for its volunteer work assigning payments from the September 11 Victims Compensation Fund.
Mr. Becnel said the Feinberg Group negotiated settlements with each lawyer involved in the case after reviewing medical records of their clients.
“The Becnel group of settlements involves 150 people and each of those were negotiated individually,” he said. “After all the records were reviewed by their team of expert lawyers, we agreed to a settlement.”
Perry Weitz, a Manhattan lawyer representing 1,700 clients, said the settlement was good for the claimants. “It means they’ll get their money sooner rather than later.”
Pfizer said the $894 million charge, to be counted against third-quarter results, which are scheduled to be announced next week, would amount to $640 million after taxes. Some of that — the company did not disclose how much — will be recouped from insurance companies. The $894 million consists of $745 million to settle personal injury claims, $89 million related to consumer fraud claims, and $60 million to settle lawsuits brought by state attorneys general.
As of the second quarter, the company had $26.3 billion in cash and short-term securities.
When Merck last year agreed to settle the Vioxx claims, it reversed the company’s long-stated position that it would litigate every one of those cases. Approximately 57,000 people have filed claims that they were injured by Vioxx. About $100 million has been paid from that Merck fund so far.
