Healthy Skepticism Library item: 13924
Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.
Publication type: news
Berkrot B.
US judge rules Pfizer shareholder suit can proceed
Reuters 2008 Jul 1
http://www.reuters.com/article/marketsNews/idUSN0130287320080701?pageNumber=1&virtualBrandChannel=10216
Full text:
A federal judge ruled on Tuesday that a securities fraud lawsuit brought by shareholders against Pfizer Inc and some of its former executives can go forward, but she threw out part of the claim against the world’s biggest drug maker.
The lawsuit claims Pfizer violated federal and state laws by concealing heart risk data from clinical studies of its Celebrex and Bextra pain drugs to protect profits and its share price.
Pfizer’s bid to have the suit dismissed was largely unsuccessful. It was filed on behalf of Teachers’ Retirement System of Louisiana and investors who purchased Pfizer stock between Oct. 31, 2000 and Oct. 19, 2005.
“Because plaintiffs have alleged adequately that defendants were aware of studies containing statistically significant links between Celebrex/Bextra and illness, plaintiffs have satisfied their burden of alleging facts giving rise to a strong inference of fraudulent intent,” U.S. District Court Judge Laura Swain wrote in her decision.
Swain also denied a bid to dismiss individual claims against Pfizer’s former Chief Executive and Chairman Hank McKinnell, former research chief John LaMattina and Karen Katen, ex-president of Pfizer Pharmaceuticals, ruling they were culpable as they “participated directly in the day-to-day management of Pfizer and made strategic decisions.”
Those claims include accusations of insider trading against the former executives.
Swain thew out market manipulation claims against Pfizer.
“Because plaintiffs allege no deceptive course of conduct going beyond misrepresentations or omission, their market manipulation claims must be dismissed,” Swain ruled.
Pfizer, which voluntarily pulled Bextra from the market in 2005 over heart risk concerns, argued it shared all pertinent clinical information with U.S. health regulators. But the suit argues that, just because the Food and Drug Administration had access to the full data, does not excuse Pfizer from disclosing it to the public.
Celebrex remains on the market for arthritis and other pain. Both drugs belong to the same class of medicines as Merck & Co Inc’s Vioxx, which was pulled from the market in September 2004 after a study showed it increased the risk of heart attack and stroke.
“Pfizer is pleased with the court’s decision to dismiss certain claims,” company spokesman Ray Kerins said. “Pfizer believes the remaining claims to be without merit and intends to defend the action vigorously.”
He noted the ruling was procedural and did not make any findings regarding the safety or efficacy of Celebrex or Bextra.
The suit attempts to link alleged health risks associated with Bextra and Celebrex and the decision to pull Bextra from the market with a fall in Pfizer’s share price to $21.09 from $47.44 during the class period.
But Pfizer was facing a slew of problems totally unrelated to Bextra and Celebrex during that period, including the spectacular clinical failure of a cholesterol drug that had widely been expected to be a multibillion-dollar seller and the impending patent expiration of several important medicines.
