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GlaxoSmithKline has reportedly decided to sell one of its Zantac manufacturing plants in India for a fraction of the potential value, almost exactly a year after drug manufacturer was forced to recall the popular heartburn drug, which was removed from the market due to a risk of cancer-causing contaminants.
The drug manufacturer’s board of directors approved the sale of the company’s production plant in Vemgal, India for $25 million on Tuesday, according to a report by Fierce Pharma. The sale comes only three years after GlaxoSmithKline first opened the plant for $155 million as a Zantac manufacturing facility
In early April 2020, the FDA announced a nationwide Zantac recall that impacted all name-brand, generic and over-the-counter versions of the ranitidine-based medications, after regulators determined that there was no way to ensure the drug was not exposed to conditions that cause the pharmaceutical ingredient to chemically convert into N-Nitrosodimethylamine (NDMA), a known carcinogen.
Zantac (ranitidine) was a top selling heartburn and acid reflux drug for decades, becoming the first medication to surpass $1 billion in annual sales in 1988. However, it now appears the drug makers knew for years that there may be a cancer risk from Zantac, since ranitidine is inherently unstable, and produces high levels of when stored at high temperatures or as the medication travels through the body. Therefore, NDMA likely contaminated pills for decades and GlaxoSmithKline now faces thousand of Zantac lawsuits brought by former users diagnosed with breast cancer, prostate cancer, pancreatic cancer, esophageal cancer, stomach cancer and other malignancies.
Zantac Contamination Problems
Although Zantac was aggressively marketed for decades as a safe and effective heartburn treatment, increasing evidence suggests that users were exposed to high levels of cancer-causing chemicals since the drug was first introduced.
The public was not informed about the high levels of NDMA produced by Zantac until September 2019, when an independent pharmacy, Valisure, began conducting test that found each 150 mg pill exposed users to levels of NDMA that were substantially higher than the permissible daily intake limit set by the FDA.
By late March 2020, the FDA had determined there was no way to make the drug safe, and called for industry-wide recall for Zantac and all ranitidine products.
GlaxoSmithKline obliged, leaving its $155 million, virtually brand new plant without a product to produce. It is now selling that plant to Hetero Labs for a fraction of its original value.
Hetero Labs will receive the entirety of the 50-acre facility, including the land, the plant, machinery, assets, software and equipment. GlaxoSmithKline expects the sale to be complete by September 30.
Many expect that the growing litigation over Zantac will ultimately include more than 100,000 claims brought by former users now left with cancer, each raising similar allegations that GlaxoSmithKline knew or should have known about the risks.
Given common allegations and claims raised in the complaints, the federal litigation is currently centralized before U.S. District Judge Robin L. Rosenberg in the Southern District of Florida, who is presiding over coordinated discovery and pretrial proceedings.
It is expected that a “bellwether” program will be established, where a small group of representative claims will be prepared for early trial dates to help the parties gauge how juries may respond to certain evidence and testimony that is likely to be repeated throughout the claims.
While the outcome of such early trials will not be binding in other cases, they may help the parties reach Zantac settlements, avoiding the need for potentially hundreds or thousands of individual trials in courts throughout the U.S. federal court system.