Pfizer, the world’s largest drug company, has agreed in principle to an $894 settlement for the painkillers, Celebrex and Bextra.
The move will result in a substantial charge on the company’s third quarter earnings of $894 million or $640 after taxes.
In a statement, Pfizer (NYSE: PFE) said the amount should resolve about 90 percent of the personal injury claims against Pfizer for the drugs.
While Celebrex is still on the market, Bextra was removed in 2005 due to safety concerns over cardiovascular risks and some life-threatening skin reactions. Celebrex then received a black box warning, the strongest issued by the FDA.
Consumers have charged that the painkillers, both Cox-2 inhibitors, cause heart attack and stroke. Vioxx, removed in 2004 was also a Cox-2 inhibitor, whose maker Merck promised a $4.85 billion settlement last year.
However, unlike Vioxx, state and federal judges have ruled that patients taking Bextra and Celebrex failed to prove that Celebrex can cause heart attack and stroke when taken as prescribed.
Last November a federal judge in San Francisco dismissed some Celebrex cases of those patients who were using 200 mg of Celebrex saying there was insufficient scientific proof that 200 mg could cause heart attacks or strokes.
In 2007, the Institute for Safe Medication Practices and the Division of Public Health Sciences, Wake Forest University School of Medicine, conducted a longitudinal Adverse Events Reporting System Review of the U.S. FDA's most dangerous drugs. The study found Celebrex to be one of the most dangerous drugs on the market with some of the highest number of suspect drug events.
The Attorneys General of 33 states will receive $60 million, while $89 million will resolve class action lawsuits that allege fraud in connection with the promotion of the drugs.
Still unresolved are a number of individual lawsuits filed by consumers who were injured after taking Celebrex or Bextra.
Pfizer’s general counsel, Amy Schulman says the company stands by the safety of Celebrex and hopes it resolve the remaining 8 to 10 percent of individual cases. “We are fully prepared to try one of these cases if we need to,” she says in a statement.
Pfizer reportedly wanted to put these matters behind it to “help shareholders, patients and doctors”
The company plans to release its quarterly earnings next Tuesday. The stock value dropped after the Friday morning announcement. #