Shortly after settling claims with the federal government that it had bribed health officials around the world, Pfizer, Inc.—the world’s largest drug company—has now resolved lawsuits regarding misrepresentations to investors concerning two different drugs. Both suits were class actions brought by shareholders of stock in Pfizer and both claimed that Pfizer’s failure to reveal important negative information about the drugs caused the company’s stock price to be inflated.
This month, Pfizer has agreed to pay $67.5 million to settle a class-action lawsuit by shareholders who claimed they were misled about risks associated with the antidepressant Pristiq.
Shares lost more than $7.6 billion of market value on July 24, 2007, after the company announced it would not approve Pristiq to treat “hot flashes” in post-menopausal women until it learned more about potential heart and liver problems associated with the drug. The shareholders alleged that the company’s failure to reveal adverse effects sooner caused its stock price to be inflated during period from June 26, 2006, to July 24, 2007.
The settlement in City of Livonia Employees’ Retirement System v. Wyeth et al, U.S. District Court, Southern District of New York, No. 07-10329, will still have to be approved by the court.
Just last month, Pfizer agreed to pay $164 million to settle a similar shareholder class action accusing the drug maker of misrepresenting the clinical trial results for Celebrex. Celebrex is Pfizer’s fifth biggest-selling medicine, with annual sales of about $2.5 billion. In 2003, shareholders sued Pfizer and alleged that from 2000 to 2001, the defendants misrepresented the clinical trial results of Celebrex to make its safety profile appear better than rival drugs. The settlement comes shortly before trial was to begin and after a complex history of appeals. The case is Alaska Electrical Pension Fund, et al. v. Pharmacia Corporation, et al., U.S. District Court for the District of New Jersey, 03-cv-01519
In addition, as we previously reported, Pfizer agreed in August to pay the U.S. government $60 million to settle allegations that its employees bribed doctors and other officials in Europe and Asia to win business and boost sales.
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