Torcetrapib’s Impact: Are Lawsuits Looming For Pfizer?
Pfizer has already lost $20 billion in shareholder value because its stock plummeted after it announced its decision to halt testing on its experimental cholesterol medication torcetrapib. However, does Pfizer stand to lose more money due to litigation? Heather Won Tesoriero who contributes to the WSJ Law Blog had this to say:
“The company is unlikely to get hit with personal injury lawsuits because the patients took torcetrapib in clinical trials. According to Roger Morris, health group chair at Quarles & Brady, there’s some fairly standard language used in informed consent that typically absolves companies of liability in clinical trials at the negligence level or below. But lawyers say Pfizer will likely see securities-fraud litigation. The company’s stock closed down 10.6%. How far and long the stock sags will help plaintiffs’ lawyers weigh the merits of a shareholder suit, says Scheff, whose big pharma clients include Schering-Plough and Johnson & Johnson.â€
Although experts are not certain that Pfizer will be sued by clinical trial participants (or their families), I would not be surprised if it happened. As I noted in this post, patients are filing suits where they claim that companies, scientists and review board members were negligent and did not properly inform them of safety issues relating to the drug they agreed to help test.
In addition, there is precedent for a shareholder suit. Earlier this year Bristol Myers-Squibb (BMS) paid $185 million to investors who charged that the company mislead them about Vanlev, an experimental high blood pressure medication. They said that BMS’ rosy statements about Vanlev’s safety and efficacy profile artificially inflated the price of the company’s stock.
Only time will tell if Pfizer will have to dedicate some of the money it is saving by slashing staff to defending against lawsuits. However, because Pfizer’s CEO is a lawyer, I’m sure that already has his legal team to preparing for potential litigation.
