Agreement to Settle Zicam Loss of Smell, Taste Lawsuits Reached for $15.5M

The makers of Zicam have indicated that they are offering a $15.5 million to settle lawsuits brought by consumers who allege that they lost their sense of taste and smell due to the company’s recalled line of nasal sprays and gels. 

The Zicam settlement was announced on Tuesday by Matrixx Initiatives, Inc., which is preparing to be acquired by H.I.G. Capital LLC, a private investment firm. The company said that 1,014 plaintiffs and 1,127 claimants will be eligible to be a part of the settlement. In return they would drop all lawsuits and claims against the company.

A Zicam recall was issued last year after the FDA identified at least 120 adverse event reports involving loss of smell with Zicam Cold Remedy Nasal Gel, Zicam Cold Remedy Nasal Swabs and Zicam Cold Remedy Swabs Kids Size.

Although Matrixx Initiatives has maintained that their over-the-counter cold remedy could not be the cause for the problems, the manufacturer agreed to remove the product from the market following the FDA warning.

In the aftermath of the recall, FDA inspectors discovered 800 reports of Zicam problems that Matrixx Initiatives failed to forward to the agency, in violation of federal regulations.

A growing number of people have come forward to pursue a Zicam lawsuit against Matrixx Initiatives, alleging that they suffered loss of smell or taste after using the product. Last October, the U.S. Judicial Panel on Multidistrict Litigation consolidated the federal Zicam recall litigation for pretrial proceedings in the U.S. District Court for the District of Arizona.

The Zicam injury lawsuits allege that zinc gluconate, the single active ingredient in nasal Zicam cold remedies, is toxic to the tissue inside the nose and can cause damage to a user’s ability to smell, detect odors or taste; a condition known as anosmia. In addition to causes a decreased quality of life, these Zicam smell and taste problems, could pose a more serious health risk to consumers, who may be unable to detect spoiled foods, gas leaks or other hazardous conditions.

The agreement to settle Zicam suits was reached around the same time it was announced that the manufacturer will be acquired by H.I.G. The acquisition is scheduled to begin on December 22, when the firm will start buying shares for $8 each. That price is a 56% increase in value for the company’s stock price, which tanked after the Zicam nasal spray and gel recall in 2009 and never fully recovered.

In August, Matrixx Initiatives settled 18 Zicam class action lawsuits, agreeing to pay $35,000 and attorney fees to the lead plaintiffs. The company also agreed to place a warning label on the nasal sprays and gels if they are ever allowed to return to store shelves.

Matrixx Initiatives has attempted multiple times to get the FDA to withdraw its warning on Zicam, claiming that the agency does not have the scientific data to make a determination that Zicam causes anosmia, loss of the sense of smell. However, the FDA has refused. And while Zicam nasal sprays and gels were sold as an unregulated herbal supplement, the FDA has determined that the health risks of Zicam nasal products means that the nasal sprays and gels will first have to get FDA approval before returning to shelves.