Interview Synopsis

Zantac Litigation – Settlement Scenario Outlook

  • Public Equity
  • Healthcare
  • Europe

Legal action against pharmaceutical companies involved in selling gastrointestinal drug Zantac reached a new milestone last month as the first of 3,000 cases filed was voluntarily dismissed. Despite the ruling, a former general counsel at Teva Pharmaceutical Industries believes the potential liability of the litigation could be USD 2-7bn, with GSK on the hook for nearly 30% of it.

Zantac litigation could reach billions in payouts

In an Interview with Third Bridge Forum, the specialist said that in their opinion, Zantac is a carcinogenic given it contains NDMA and plaintiffs will likely be successful in proving this. However, they told us plaintiffs could find it difficult to prove they ingested sufficient quantities of the drug to have caused their cancer. This is complicated by the US Food and Drug Administration’s study, which found “muted” quantities of NDMA in the drug compared to Valisure’s original investigation. The high evidentiary burden, coupled with other “confounders” like age and comorbidities, makes the specialist think “the evidence is not overwhelmingly strong” for plaintiffs. 

Though 3,000 cases have already been filed, the specialist thinks only a “trickle” of further cases could be added due to a number of barriers including statute of limitations expiring. The specialist said they put “very little, if any value” on reports of 55,000 to 160,000 potential lawsuits unfiled, claiming “the only thing that matters are the cases filed”.  

The specialist estimates the potential total liability could be between USD 2-7bn based on previous litigation settlements over the past 15 years. They believe payouts will be spread over a 15-year period rather than in one lump sum but that is likely to exclude generic manufacturers due to “preemption”. Generic manufacturers have already collectively paid USD 500,000 in a recent settlement, which the specialist described as a “nuisance value” that cannot be extrapolated across branded players like GSK, Sanofi, Pfizer and Boehringer Ingelheim.

All four pharmacies will likely face some degree of liability for their over-the-counter (OTC) sales of Zantac, according to the specialist. However, GSK could be the most liable, having been responsible for prescription and OTC sales, with the specialist telling us 30% risk is not “unreasonable”. However, GSK spinoff Haleon may be exempt having so far not been named in any filed cases.

The specialist told us it could be years before we reach a point when there are enough numbers to strike a “broader deal” that encompasses a class action or a “bulk” of the MDL cases. In the meantime, they expect individual cases to continue being settled – proceeding with the next trial in California in February next year. 

Click here to access all the human insights in Third Bridge Forum’s “Zantac Litigation – Timelines, Indemnification Dynamics & Settlement Scenario Outlook” Interview.

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