Pfizer Officials Sued by Investors
August 03, 2010
A union pension fund has sued drugmaker Pfizer, saying that directors should be held liable for the company's repeated violations of federal laws governing drug-marketing practices that resulted in the company having to pay a $2.3 billion settlement.
Pfizer's board turned a blind eye to criminal guilty pleas the company entered over marketing practices for medicines such as Bextra and Neurontin. The fund's lawyers argue that the directors' inaction has hurt the value of investors' stakes in the company.
According to Bloomberg:
"The $2.3 billion settlement to resolve government probes into Pfizer's marketing practices was the largest accord in history to address such sales techniques. Proceeds from the accord went to government health agencies including Medicare, Medicaid and the military's Tricare health plan."
In separate drug company lawsuit news, GlaxoSmithKline has agreed to pay more than $1 billion to resolve more than 800 cases alleging its Paxil antidepressant caused birth defects, according to sources familiar with the settlements.
The accords provide an average payout of more than $1.2 million to families of affected children, but still leave more than 100 birth-defect cases pending. Officials of Glaxo said they set aside $2.4 billion to resolve litigation over Paxil and the diabetes drug Avandia.
"The company had $11.7 billion in U.S. Paxil sales for nine years starting in 1997, according to documents made public last year in a Pennsylvania trial over birth-defect claims."