Federal court reverses dismissal of class-action suit against Pfizer over pain drugs
- A federal appeals court reversed a previous dismissal of a class-action lawsuit against Pfizer, ruling the case was wrongfully dismissed, reports Reuters. The verdict, from the 2nd U.S. Circuit Court of Appeals in Manhattan, sends the shareholder lawsuit back to the district court judge who originally heard the case.
- The lawsuit alleges Pfizer mislead shareholders about the safety of the company's Celebrex and Bextra pain-relieving drugs. A group of Pfizer investors initiated the suit in 2004, claiming the company concealed cardiovascular risks associated with Celebrex and Bextra, two COX-2 inhibitors approved as anti-inflammatories. In the mid-2000's, evidence mounted showing that COX-2 inhibitors significantly increased the risk of certain CVD events.
- In dismissing the case, the federal appeals court also ruled U.S. District Judge Laura Taylor Swain erred in refusing to allow expert testimony from a former Univeristy of Chicago Law School dean, Daniel Fischel, about potential damages to shareholders.
In the decision to overturn the dismissal, Judge Livingston determined Fischel should have been allowed to testify, and said Pfizer should not have been considered immune to liability for statements made by the former manufacturers of Celebrex and Bextra, which did not reveal any of the CVD risk data.
When Celebrex was approved in 1998, it was part of a breakthrough class known as COX-2 inhibitors, which were intended to provide anti-inflammatory relief, primarily for arthritis, while protecting the gastrointestinal (GI) system from damage. The class started to fall out of favor as evidence of nCVD risks mounted, leading Merck to pull Vioxx (valdecoxib) from the market in 2004. Plaintiffs claimed that failure to include this type of evidence in critical communications led to price inflation of Pfizer's stock.
When Pfizer shareholders filed their suit in 2004, Pfizer's stock took a huge hit. By the time the suit was dismissed, Pfizer's market value had decreased by $70 billion. Around the same time, an article published in the New England Journal of Medicine, showed a significantly increased risk of myocardial infarction, stroke, congestive heart failure, or cardiovascular-related death in patients who took Celebrex.
In response to the decision, a Pfizer spokesperson said, “While Pfizer is disappointed by today’s outcome, the Second Circuit upheld the district court’s decision that Plaintiffs’ damages expert provided unreliable and inadmissible opinions that had the effect of improperly inflating Plaintiffs’ damages. The Company appropriately communicated accurate and science-based information about its medicines to investors and the public at all times and will continue to defend this case vigorously.”
The case is In re: Pfizer Inc Securities Litigation, 2nd U.S. Circuit Court of Appeals, No. 14-2853.