GSK to Pay $2.2 Billion to Settle Zantac Lawsuits in the U.S.

UK pharmaceutical giant GSK has announced a significant settlement in relation to complaints that a discontinued version of its heartburn drug, Zantac, was linked to cancer. The company is set to pay up to $2.2 billion (approximately £1.68 billion) to resolve thousands of cases pending in U.S. courts. The settlement pertains to allegations that Zantac contained cancer-causing elements.

The settlement involves agreements with 10 law firms representing around 80,000 claimants, covering approximately 93% of all related cases. GSK effectively aims to eliminate financial risks and avoid prolonged litigation associated with these claims.

In addition to this major settlement, GSK has agreed to pay $70 million in resolution of a whistleblower complaint. This complaint accused the company of defrauding the U.S. government by hiding Zantac’s potential cancer risks. Notably, GSK has not admitted to any wrongdoing in reaching these settlements.

Zantac, once a prevalent medication approved for sale in the U.S. in 1983, emerged as a top-selling drug within five years, with sales exceeding $1 billion annually. However, it was withdrawn from shelves by U.S. regulators in 2020 over concerns that its primary ingredient, ranitidine, could convert to a substance linked to cancer upon exposure to heat, sparking numerous lawsuits against its manufacturers.

In addition to GSK, major pharmaceutical companies such as Pfizer and Sanofi have marketed Zantac. Both have agreed to settle their respective cases, whereas Boehringer Ingelheim has yet to announce any major settlements. Presently, a reformulated version known as Zantac 360, which omits ranitidine, remains available for consumers.

Despite the settlements, GSK maintains that scientific consensus does not support claims that ranitidine increases cancer risks. Experts had warned that the legal challenges associated with Zantac could cost GSK upwards of $30 billion according to some analyses. However, Morgan Stanley had previously anticipated total costs between $2 billion to $8 billion.

This development comes amidst a backdrop of fluctuating stock prices for GSK, impacted by the specter of ongoing legal settlements. Analysts and investors alike will be watching closely as GSK navigates this legal landscape.