The British drugmaker GSK has struck an agreement to make a payment of up to $2.2bn (£1.7bn) to resolve litigation brought in the US over its heartburn treatment Zantac.
The company said it had struck agreements with 10 plaintiff law firms who represent about 93%, roughly 80,000, of the US state court product liability cases pending against it.
The company said in a stock market statement on Wednesday that it would make the aggregate payment to resolve all such cases handled by those plaintiff firms that meet agreed eligibility and participation criteria.
The claimants had alleged their cancers were linked to Zantac, known generically as ranitidine. GSK had argued there was no evidence to suggest an increased cancer risk and has not admitted any liability in the settlements.
The law firms are unanimously recommending to their clients that they accept the settlement, which is expected to be fully implemented by the end of the first half of next year.
GSK also confirmed that it had reached an agreement in principle to pay a total of $70m to resolve the Zantac complaint previously filed by Valisure, the independent Connecticut-based laboratory that said its testing in 2019 revealed that Zantac could form a cancer-causing carcinogen known as NMDA. The agreement in principle is subject to final approval from the Department of Justice.
The settlement is likely to be welcomed by GSK shareholders after uncertainty over Zantac litigation intensified in June following a ruling from a Delaware judge that certain scientific evidence was admissible and left the company exposed to the risk of future US jury trials.
In its statement, GSK said: “While the scientific consensus remains that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer, GSK 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 company said it expected to recognise an incremental charge in its third-quarter results for 2024 of £1.8bn in relation to the state courts settlement, the settlement agreement in principle and the remaining 7% of pending state court product liability cases, which will be partially offset by the expected reduced future legal costs.
GSK will fund the settlements through existing resources and has no plans to change its investment plans for research and development.
Source: theguardian.com
