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Background
Pfizer (PFE.N) has agreed to a settlement of $93 million to resolve antitrust allegations brought forth by wholesale drug distributors. The distributors accused Pfizer of colluding with India’s Ranbaxy Laboratories to obstruct the sale of cheaper generic versions of the cholesterol drug Lipitor.
Settlement Details
Attorneys representing Lipitor purchasers, including Rochester Drug Co-Operative Inc. and Puerto Rico’s Drogueria Betances LLC, disclosed the agreement in a filing on Wednesday in a U.S. court in Trenton, New Jersey. The proposed settlement, which remains subject to judicial approval, marks a significant development following over a decade of legal battles. Notably, Pfizer did not admit any liability in the settlement.
Reaction from Pfizer
In response to the allegations, Pfizer released a statement asserting that the accusations were “factually and legally without merit.” The pharmaceutical giant defended the settlement as “fair, reasonable, and the best way to resolve this litigation.”
Continued Case Against Ranbaxy
While Pfizer settled, the case against Ranbaxy will persist, according to statements made by the attorneys representing the distributors.
Acquisition by Sun Pharma
Sun Pharma (SUN.NS), which acquired Ranbaxy in 2014, has not yet responded to requests for comment regarding the settlement.
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Allegations Against Pfizer
Pfizer introduced Lipitor in 1997, and the drug amassed over $130 billion in sales during its initial 14 years on the market. The distributors alleged that Pfizer engaged in fraudulent practices to extend its patent rights over Lipitor. Furthermore, they accused Pfizer of incentivizing Ranbaxy to delay the release of a generic version of Lipitor and engaging in dubious legal maneuvers concerning the drug.
Implications and Legal Proceedings
Lawyers representing the plaintiffs hailed the settlement as a source of “immediate economic relief” for class members. Additionally, they emphasized that the agreement mitigates the risks associated with continued litigation, potential appeals, and the possibility of no recovery. Legal fees, amounting to approximately $31 million, will be sought from the settlement fund.
Case Details
The case is identified as In re: Lipitor Antitrust Litigation, filed in the U.S. District Court, District of New Jersey, under No. 3:12-cv-02389-PGS-JBD.
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