After spending nearly $600 million in legal expenses to fight thousands of Seroquel lawsuits filed by users of their blockbuster antipsychotic medication, AstraZeneca indicates that they have exceeded the potential extent of their liability insurance coverage for defense costs.
Seroquel (quetiapine fumarate) is an atypical-antipsychotic that is a top selling drug for AstraZenenca, generating nearly $5 billion a year in sales.
The drug maker faces potential liability for allegedly failing to adequately warn users that Seroquel side effects may increase the risk of diabetes, weight gain, hyperglycemia and a rare movement disorder known as tardive dyskinesia.
While announcing their second-quarter profits, AstraZeneca noted that the Seroquel lawsuit defense costs have exceeded $593 million, which does not include any funds that may be necessary to compensate consumers who suffered injuries. This would exhaust the potential insurance coverage available for such expenses, and the company also anticipates that their insurers will dispute coverage for some or all of the costs. AstraZeneca must now begin taking charges on their income statements to cover the costs of the litigation.
As of July 13, 2009, AstraZeneca faced 10,381 Seroquel lawsuits involving about 19,391 plaintiff groups, according to their second quarter report. Most of the cases have been consolidated in an MDL, or Multidistrict Litigation, in the U.S. District Court for the Middle District of Florida.
Earlier this year, two of the first cases set for trial in the federal MDL were dismissed after the court determined that those plaintiffs could not establish that their diabetes was caused by Seroquel under Florida law. While those cases are being appealed, the remaining Florida cases that were prepared for early trials have been stayed pending a decision. However, the MDL court has indicated that cases filed in other states will be remanded back to the federal district courts where they were filed for individual trials after procedural and evidentiary issues are resolved.
At this time, the first trial for a Seroquel lawsuit is scheduled to occur in Missouri state court in October 2009.