Zantac’s manufacturers were on a roll. Their defense had exacted a spate of favorable decisions and jury verdicts. Yet, on October 9, Glaxo Smith Kline (GSK) suddenly settled 93% of the remaining cases – for 2.2 billion dollars. [1] True, the stock jumped 6.5% the day after the news, and the settlement was less than the estimated $3.5 billion value. So why would GSK, the largest of the four major distributors of the now-recalled stomach acid drug, suddenly abandon the tried-and-true defense mantra, “millions for defense, not a penny for tribute”?
Zantac Litigation is Born
“The best starting point involves a private company known as Valisure. Valisure theorized that ranitidine [aka Zantac] has the potential to degrade into a carcinogen known as NDMA …. On September 9, 2019, Valisure…. filed a Citizen Petition, calling for the recall of ranitidine because … ranitidine contained high levels of NDMA…To evaluate this theory, Valisure tested … ranitidine … and found NDMA… in excess of 3,000,000 ng.” which was way beyond the FDA allowable limit of 96 ng.
- Judge Robin Rosenberg in the MDL litigation rejecting 50,000 Zantac claims
As I have written, Valisure contorted the test conditions to achieve these results. First, they heated the ranitidine to 266 degrees Fahrenheit, well above the normal human body temperature of 98 degrees. When Valisure re-tested ranitidine at 98 degrees Fahrenheit, they detected no NDMA. They then added salt to the test. This generated 300,000 ng of NDMA. But the level of salt was so great that this level of salt intake itself would cause death. When Valisure tested ranitidine with salt concentrations approximating safe human ingestion levels, they detected no NDMA.
Valisure presented its findings to the FDA, which concluded that Valisure’s testing created the high NDMA results. However, since the FDA’s tests produced some excessive levels, it ordered a voluntary recall, birthing the Zantac litigation in 2019.
While favorable defense verdicts and decisions mounted, some 83,000 cases remained, including 400 cases pending in Philadelphia, a venue hospitable to plaintiffs. This spring, the plaintiffs’ bar unleashed its preemptive attack: Valisure, represented by attorneys actively involved in Zantac’s personal injury cases, filed a whistleblower lawsuit claiming that GSK had defrauded the government:
“This [whistleblower] case is not about whether the NDMA in ranitidine causes cancer. … That issue is at the heart of personal injury lawsuits related to ranitidine causing individual consumers cancer—an issue that has little to do with this lawsuit. This lawsuit concerns GSK’s fraud on the federal and state governments and the money spent on ranitidine products by governments because of that fraud. Whether ranitidine increases the risk of cancer in humans is immaterial to this lawsuit.”
The focus no longer was on whether the drug was dangerous. Now, it centered around claims of misrepresentation and fraud, enhanced by damaging corporate records presumably found during discovery of past cases.
Qui Tam Cases
Whistleblowers, or qui tam suits, are brought by third parties on behalf of the government under the False Claim Act, which “proscribes fraudulent claims for payment from the United States.” In its role as citizen-vigilante, Valisure assumes a new legal role: “Relator,” entitled to a portion of the award in a successful suit. In addition to suing on behalf of the United States, Valisure now sought to represent 27 states and the District of Columbia.
Their amended complaint, released in May 2024, [2] contains 218 pages of allegations alleging misconduct by GSK defrauded the government of millions of dollars in Medicaid, Medicare, and VA reimbursements. These allegations, many speculative and theoretical, are not proof of wrongdoing. However, legally worthy or not, some are sufficiently ghastly to induce a prudent defendant to consider settlement.
“For nearly 40 years GSK … lied to the FDA…commit[ing] … acts of fraud… including, …, the concealment of the ranitidine-NDMA data, fabrication and submission of false and misleading data as part of ranitidine’s approval, submission of a false product labels … [and] submission of false and misleading supplemental applications” – From Amended Complaint
Corporate Greed
If past cases are any guide, when corporate greed surfaces, jury verdicts surge. GSK’s major vulnerability lies in Valisure’s allegation of profiteering coupled with disdain for assessing potential harm:
“to say that Zantac, was an important product for GSK (then Glaxo) would be an understatement,” it was a “Blockbuster. [3]
Valisure goes on:
“As one GSK executive put it in 1983: [T]he sheer size of this opportunity and the potential rewards from it dwarf anything we’ve done so far. It’s not just that Zantac is bigger than all our other products put together...it’s bigger than the whole company. You’ve all heard the numbers. My mind finds it difficult to absorb all those zeroes...especially when I’m salivating so hard. (LAUGHTER).”
“the carcinogenic risk, if any” would not “be minimized” but it did not care: “[W]e’re out to dominate the entire product category.” (emphasis in original).”
Spoliation: “GSK Destroys Evidence”
Another verdict-inflamer is spoilation, i.e., destroying relevant evidence before or during litigation. According to Valisure: “GSK violated multiple court orders and its obligations under federal and state law when it destroyed its last remaining U.S. retained samples of Zantac…. without testing them for NDMA:”
“[T]he idea that a routine destruction policy could go on in the face of two federal court orders is enough to make me gag. . . . [I] think you’re making me get a little more upset … as you’re defending something that’s indefensible.” - Discovery Referee overseeing California litigation
The complaint is replete with speculative language, like “theoretically possible” or “could potentially cause harm.” This loosey-goosey language presages an inability to establish, “more probably than not,” recklessness, fraud, or even simple negligence. Even Valisure admits:
“Numerous scientific studies have been conducted to assess the association of ranitidine with cancer. Those studies, however, have not been able to specifically quantify the amount of NDMA exposure and, thus, have limitations.” Valisure compensates for this by claiming GSK could have known the product … caused harm, and should have tested further.
While these assertions might establish a failure in the standard of care, there is still no evidence that ranitidine degrades into sufficient quantities of NDMA to be carcinogenic in humans – the causal link.
A picture is worth 1000 ng.
However, even with the causal infirmities, the complaint is still volcanic- replete with pictures allegedly demonstrating that to mask the color change caused by the degradation of the unstable NDMA molecule, GSK reformulated the capsule from white to yellow or peach.
“Given that NDMA is a yellow oily liquid, when ranitidine degrades into NDMA, ranitidine becomes discolored. Indeed, … GSK observed that when ranitidine degrades into NDMA in the presence of moisture and heat, it changes color (turns yellow and then brown) and breaks down, and that this is directly related to NDMA content.”
“While the pills at 25°C/60% RH [relative humidity] stayed relatively intact, the 30°C/75% RH started discoloring on day 2. Peer-reviewed literature shows that temperatures routinely reach in excess of 30°C (upwards of 38°C) and relative humidity above 75% (upwards of 100%) in a bathroom during a shower—the place where most people store their medications. Once again, as part of this discoloration simulation, GSK did not test for the yellow oily substances known as NDMA or identify the impurities.”
It's not proof, but it is optically disconcerting.
Saving The Worst For Last
As if it couldn’t get worse, the complaint alleges criminal violations, claiming GSK’s fraud caused the distribution, sale, and manufacture of an adulterated, misbranded, and worthless product because
“NDMA is a decomposed substance of ranitidine [and] it is a criminal offense to introduce or cause to be introduced into interstate commerce a drug that is adulterated or misbranded….It is also a crime to manufacture a misbranded or adulterated drug ... A drug is adulterated if “it consists in whole or in part of any filthy, putrid, or decomposed substance.”
Finally, Valisure raises the specter of opioid’s “arch-villain” Purdue:
“GSK engaged in a massive, nationwide marketing campaign to convince doctors—and patients, for the first time ever—to use ranitidine because of its purportedly superior safety profile, all the while knowing that it was concealing important health safety data.”
These allegations won’t sustain a personal injury case, but some assertions may be admissible, inflaming a jury and exciting mile-high punitive damage awards. Worse, perhaps, is that claims of failing to disclose might be used in an SEC shareholder case, where corporations have the duty to divulge financial risks. Whether the failure to test a product a company has reason to know might prove harmful constitutes an SEC violation is unknown, but it is undoubtedly enough to worry a company into settling.
On the Other Hand
Interestingly, after ample time to review the complaint, neither the US government nor any of the 27 states decided to “intervene,” -- leaving Valisure the sole “prosecutor,” a role which enriched it to the tune of a separate 70 million dollar settlement, which the justice department must yet approve.
That might not be forthcoming given the recent tenor of qui tam cases.
A small blessing, perhaps.
[1] “Along with Pfizer, GSK, Boehringer Ingelheim and Sanofi. Pfizer is settling most state court cases, and Sanofi is settling approximately 4000. Boehringer has not announced any settlements and continues to try cases, one of which is currently pending in California.
[2] The complaint, filed in 2019, remained under seal to give the government time to consider intervening. In March, they declined, and the amended complaint was filed on May 20.
[3] Zantac was one of GSK’s most successful products, the first prescription drug in history to reach $1 billion in sales
Zantac litigation, GSK settlement, NDMA contamination, Valisure whistleblower, GSK fraud allegations, Zantac lawsuits
