There was news last week that AstraZeneca was settling at least 200 lawsuits that charged the drugmaker with hiding the risks of its Seroquel antipsychotic and links to diabetes (back story). As it turns out, AstraZeneca has agreed in principle to settle nearly 4,000 such claims ( see page 34). Terms were not disclosed.
AstraZeneca is only the latest big drugmaker to strike settlments with a large number of plaintiffs in ongoing product-liability litigation. Recently, GlaxoSmithKline has done the same concerning lawsuits filed over its Avandia diabetes med and Paxil antidepressant (see here and here). The goal, of course, is to dispense with the litigation before associated costs spiral upwards and further distract managers, all of which combines to unhinge investors if court battles are lost and no end appears in sight.
The settlements, by the way, come after AstraZeneca agreed to pay $520 million to settle civil charges for off-label marketing of Seroquel, but won some court battles. In April, a federal appeals court upheld a lower court ruling dismissing the first product liability lawsuit alleging Seroquel caused a patient’s diabetes. A three-judge federal panel ruled that a federal court in Florida correctly dismissed a case brought by a woman because her doctor didn’t qualify as an expert under federal court rules (see here). And in March, a New Jersey state court jury decided against a 61-year-old Vietnam War vet.
As of June 29, AstraZeneca was defending 10,363 Seroquel lawsuits in the US involving 22,412 plaintiff groups, most of which are in state courts, primarily Delaware, New Jersey, New York and Alabama. About 28 percent are in federal court, primarily in Florida, where multi-distriction litigation is housed, although some cases are in California. The settlements were first reported by Mealey's.