GlaxoSmithKline (GSK) has announced a significant settlement of up to $2.2 billion to resolve most of the lawsuits filed in U.S. state courts, which allege that the discontinued heartburn medication Zantac caused cancer. The agreement, reached with ten plaintiffs' law firms, addresses approximately 80,000 cases, accounting for 93 per cent of the pending lawsuits against the British pharmaceutical giant.
According to Reuters, a media agency, in addition to the $2.2 billion settlement, GSK will also pay $70 million to settle a related whistleblower lawsuit from a laboratory in Connecticut. Importantly, the company has maintained that it does not admit any wrongdoing in the deal, asserting that there is “no consistent or reliable evidence” linking ranitidine, Zantac’s active ingredient, to an increased risk of cancer. However, GSK stated that the settlements were made in the best long-term interest of the company to mitigate the risks associated with ongoing litigation.
Following the announcement of the settlement, GSK's shares surged by 6 per cent, indicating investor optimism regarding the resolution of the Zantac lawsuits. Analysts had previously projected a higher settlement cost, with JP Morgan estimating up to $3.5 billion. The settlement is expected to alleviate what analysts at Jefferies described as the “majority of Zantac overhang on the stock.”
Zantac was first approved by U.S. regulators in 1983 and quickly became the world's best-selling drug by 1988, surpassing $1 billion in annual sales. Over the years, it has been marketed by various pharmaceutical companies, including GSK, Pfizer, Sanofi, and Boehringer Ingelheim. However, lawsuits began to mount after the U.S. Food and Drug Administration (FDA) requested the withdrawal of Zantac from the market in 2020, citing concerns that ranitidine could degrade into N-Nitrosodimethylamine (NDMA), a known carcinogen, particularly when exposed to heat or over time.
Pfizer has also settled most of the Zantac lawsuits against it in state courts, while Sanofi recently announced a settlement of about 4,000 cases. Boehringer Ingelheim, however, has not made any major settlement announcements and is currently facing a trial in Oakland, California, where the company denies any wrongdoing.
The remaining state court cases are largely concentrated in Delaware, where a judge has permitted plaintiffs to present expert testimony suggesting a link between Zantac and cancer. This ruling is being contested by the drug companies, who have appealed to the Delaware Supreme Court. Meanwhile, a federal judge in Florida previously ruled against the continuation of around 50,000 centralised cases, stating that the plaintiffs’ expert testimony lacked scientific reliability.
Notably, Zantac is now sold under the name Zantac 360, which contains a different active ingredient and does not include ranitidine.
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