British pharmaceutical company GSK has agreed to pay up to $2.2 billion (£1.7 billion) to settle a US lawsuit over its heartburn drug Zantac.
The company announced that it has entered into agreements with 10 plaintiff law firms representing approximately 80,000 cases, or approximately 93% of the product liability lawsuits pending against the company in U.S. state courts.
The company said in a stock market statement on Wednesday that it would pay the sum to settle all cases handled by plaintiff companies that meet agreed eligibility and participation criteria.
The plaintiffs claimed that their cancer was related to Zantac, commonly known as ranitidine. GSK maintains there is no evidence to suggest an increased risk of cancer and does not accept any liability in the settlement.
The law firm has unanimously recommended that clients accept the settlement, which is expected to be fully implemented by the end of the first half of next year.
GSK also resolves a Zantac complaint previously brought by Valisure, an independent laboratory based in Connecticut, which announced that a 2019 test found that Zantac could form cancer-causing carcinogens. It was also confirmed that an agreement in principle has been reached to pay a total of $70 million for the project. Known as NMDA. In principle, this agreement requires final approval from the Ministry of Justice.
Uncertainty surrounding the Zantac case comes after a Delaware judge ruled in June that certain scientific evidence was admissible, putting the company at risk of a future U.S. jury trial. The settlement is likely to be welcomed by GSK shareholders.
GSK said in a statement: “While there remains a scientific consensus that there is no consistent and reliable evidence that ranitidine increases the risk of any cancer, GSK strongly believes that these settlements are in the long-term best interests of the company and its shareholders. It removes the significant financial uncertainty, risk and distraction associated with protracted litigation. ”
The company expects to incur an additional charge of £1.8bn in the third quarter of 2024 relating to the state court settlement, in-principle settlement agreement and the remaining 7% of pending state court product liability litigation. He said he plans to recognize it. This will be partially offset by the expected reduction in future litigation costs.
GSK will fund the settlement through existing funds and has no plans to change its research and development investment plans.
