Robust defences are critical when litigation concerns one product but multiple claimants and jurisdictions

The prospect of litigation over an alleged link between cancer and Zantac, which is used to treat heartburn and gastric ulcers, caused a reported £30bn to be wiped off the market capitalisation of large pharmaceutical companies this August. The gathering pace of the litigation is a reminder of how essential it is for manufacturers to implement strategies to reduce litigation risks where multiple claimants and jurisdictions are involved.

The origins of the litigation

Various companies, including GSK, Sanofi and Pfizer, have owned the marketing rights to Zantac, going back to its launch in the 1980s.

In 2020, the US Food and Drug Administration (FDA) requested the immediate recall from the market of all versions of Zantac. Preliminary research appeared to show that under certain conditions ranitidine, the active molecule in Zantac, degraded and became N-nitrosodimethylamine (NDMA). NDMA is an impurity and thought to be a carcinogen.

Lawsuits began to appear shortly after the FDA's intervention. The UK's Medicines and Medical products Healthcare Regulatory Agency (MHRA) oversaw the recall of some Zantac products and the European Medicines Agency (EMA) followed with its recommendation to suspend the supply of Zantac.

Multi-claimant trials are due to get underway in California and Illinois in early 2023 and reportedly involve thousands of claimants.

Risk mitigation strategies

The litigation illustrates the importance of strategies to reduce the risk that users could bring claims alleging that a medicine is defective. Strategies can include:

1. Collecting data on side-effects

GSK relies upon 11 epidemiological studies showing that the scientific consensus is that the evidence does not support the argument that Zantac increases the risk of cancer. However, the studies were published in 2021 – after claimant law firms had begun to advertise for clients.

The ability to refer to data and peer reviewed studies into potential side-effects can have a twofold benefit. First, companies can engage with regulators and so address initial concerns with minimum delay, with the aim of maintaining regulatory approval for the product. Second, performance data can be deployed to rebut speculative enquiries from media or claimant lawyers, before questions morph into formalised litigation.

2. Acting swiftly when concerns are raised

The principal argument advanced by plaintiffs in the US is that pharmaceutical companies knew of the risks of Zantac but did not act on this. It is essentially the same argument made in the opioid litigation, pelvic mesh litigation, metal-on-metal hip litigation and others: that companies knew of the risks but covered them up in their pursuit of profits.

It can be very costly to defend a claim of a cover up. Company records will form a key part of the litigation and may involve significant expense as lawyers grapple with investigating who knew what and when.

The defendants to the Zantac litigation deny the allegations. Life sciences companies take very seriously their obligations to carry out vigilance and alert regulators if concerns arise. Companies should ensure that their actions are backed up by protocols and records to provide evidence to refute allegations that material questions about side-effects were not acted upon.

3. Ensuring that commercial agreements are in order

Getting pharmaceutical products to the market is complex and involves multiple parties in the supply chain, ranging from laboratories tasked with developing products, through to manufacturers, distributors and pharmacists. Companies should ensure that contracts are negotiated so that if litigation does arise there is clarity over where any liabilities should lie. Otherwise, disputes within the supply chain can prove a costly sideshow to the main task of defending claims.

Resolving litigation

These strategies may not always be enough to see off the threat of litigation. In such cases, companies should focus on early decisions that can have a significant impact on the course of multi-claimant litigation, such as:

1. Limiting the claimant population

Reports of the potential claimant population in the Zantac litigation vary wildly. GSK itself states that it has been named as a defendant in around 3,000 filed cases but that it is aware of "numerous" others. Sanofi is reported to face thousands of claims. It can be difficult for companies to assess their potential exposure, and start mapping out a defence strategy, while the total number of ultimate claimants remains unknown. Equally, it is difficult to marshal defence arguments if there is significant variance between claimants over how claims are pleaded.

In such circumstances, companies can consider the pros and cons of procedural rules that allow for class actions to be established (in England and Wales, this is usually under a Group Litigation Order (GLO)). In appropriate cases, a formal GLO structure can provide certainty over key issues such as: the size of the claimant population, how claims outside the structure will be treated by the court, and the issues in common that the court will examine. However, the management of group litigation can be a very costly exercise with claimant law firms incurring significant costs managing a large claimant population, which can be recoverable from an unsuccessful defendant.

In England and Wales, there are also alternatives to GLOs such as "representative actions" and litigating by way of a "lead claimant" model. Representative actions can be brought by (or against) one or more persons having the same interest in the litigation without the need for all members of the represented class to participate in the proceedings; whereas, a lead claimant model will usually involve a small number of test cases from which key issues can be determined and applied to other claims arising out of the same facts. In some cases, these alternative ways of conducting group litigation may be more appropriate and proportionate than pursuing a GLO.

Nevertheless, some kind of model, whether GLO, representative action, or lead claimant model, should be considered where claims involve large claimant populations. This can make the litigation more efficient and reduce costs considerably.

That said, agreeing to formalised case management procedures may not be appropriate where claimants have poor arguments or lack evidence; instead defendants will want to focus on dismissing claims at an early stage.

2. Putting the onus on the claimants to prove their case

In each jurisdiction, defendant manufacturers should challenge claimants to show that their arguments stand up against the relevant caselaw and legislation.

In England and Wales, for example, a series of leading judgments concerning life sciences products, handed down between 2016 to 2022, combine to set out the issues that the courts would examine to determine if a product like Zantac is defective. At a very high level, defendants facing similar allegations should examine points such as:

  • On a risk-benefit analysis, whether the benefits outweigh the risks of the product. The courts have recognised that no effective medicinal product can be entirely safe and that safety is a relative concept. Taking Zantac as an example, claimants would need to show that the risks associated with ranitidine outweigh the benefits provided to vast numbers of people who used it to treat conditions including heartburn and gastric ulcers.
  • Whether compliance with regulations provides a defence to an allegation that a product is defective. Whilst the courts will not take compliance as an automatic defence, successive judgments have approved of the argument that the life sciences industry is highly regulated and that the regulations are designed to make products safe. Accordingly, compliance is powerful evidence that a product has met the required standard of safety.
  • Whether claimants can show that the alleged defect caused the injuries. It can be the case that a claimant proves that a product was defective but is unable to prove that it caused the injury complained of. The court may find it impossible to eliminate totally the competing possible causes of an injury. In the Zantac litigation, some reports suggest that the level of NDMA that can be found in Zantac is comparable to levels found in grilled meats. This raises the possibility of environmental factors being the cause.

3. Taking an international view

Litigation may begin in one jurisdiction before spreading to others. This is particularly common in life sciences products where medicines or devices are placed on multiple markets and it can take some years before side-effects are recognised. In the Zantac litigation, over 100 claims are pending against GSK in Canada and there is also a class action in Israel. In such cases, companies should take a holistic view of the litigation and limit the risk that developments in one jurisdiction could undermine the defence in another. Accordingly, it is important to make sure that arguments are consistent across jurisdictions, lawyers in the various countries are joined up and that procedural developments limit the risk of an adverse judgment that could be cited by claimants elsewhere.

Osborne Clarke Comment

Zantac is only the latest in a long line of high-profile litigation in which claimants allege that they have suffered injury caused by life sciences products. Reports at this stage of the litigation indicate that the manufacturer defendants have strong arguments at their disposal to demonstrate that Zantac met acceptable levels of safety (in fact, one leading case in the US was discontinued earlier this month). The impact on the share prices of the affected manufacturers may prove to be temporary.

It also appears that the claimants could struggle to prove that their injuries were caused by NMDA and not by other environmental, lifestyle or genetic factors. Nevertheless, companies in the life sciences sector will monitor the Zantac litigation as it provides a reminder of the importance of putting in place strategies to mitigate the risk of litigation and of how critical it is to prepare a robust defence strategy where litigation concerns one product but multiple claimants spread across numerous jurisdictions.