GSK Faces Investor Lawsuit Over Zantac, Following $2.2B Settlement

GlaxoSmithKline (GSK) is facing new legal challenges related to its former blockbuster heartburn medication, Zantac, as investors file a class-action lawsuit alleging the company concealed information about potential cancer risks associated with the drug. This development comes just months after GSK agreed to a substantial settlement to resolve thousands of user lawsuits.

$2.2 Billion Settlement and Ongoing Legal Troubles

In October, GSK reached a $2.2 billion settlement agreement to resolve approximately 80,000 lawsuits brought by users of Zantac. The settlement appeared to mark a significant step towards putting the Zantac controversy behind the company. However, the new investor lawsuit suggests that GSK's legal woes related to the medication are far from over.

The proposed class-action complaint, filed on Tuesday in federal court in Pennsylvania, accuses GSK of hiding an internal report that suggested Zantac might contain a cancer-causing compound. The lawsuit claims that GSK scientist Richard Tanner discovered in 1982 that when ranitidine, the main ingredient in Zantac, interacted with nitrites in food, it could create a carcinogenic compound called N-nitrosodimethylamine (NMDA).

Allegations of Investor Deception

The investor lawsuit alleges that GSK "buried" Tanner's findings and misled shareholders about its knowledge of potential carcinogenic risks associated with Zantac. According to the complaint, GSK assured investors that the company, the U.S. Food and Drug Administration (FDA), and the European Medicines Agency had independently concluded there was no evidence linking Zantac to cancer.

The plaintiffs argue that GSK "engaged and participated in a continuous course of conduct to conceal adverse material information about the company's financial well-being, operations and prospects." The class action is open to investors who purchased GSK shares between February 5, 2020, and August 14, 2022, during which time the company's stock price reportedly fell by about 38% as the Zantac situation unfolded.

Zantac's History and Market Withdrawal

Zantac's journey from blockbuster drug to the center of legal controversy spans several decades. GSK began selling Zantac as a prescription drug in Europe in 1981 and in the U.S. in 1983. The medication became a major success before GSK lost patent protection in 1997. Subsequently, the company licensed its rights to other pharmaceutical giants, including Pfizer, Sanofi, and Boehringer Ingelheim.

In 2020, following warnings from an independent lab about potential carcinogens in ranitidine, the FDA ordered the removal of Zantac and other ranitidine products from the market. This action has since sparked numerous lawsuits and investigations into the drug's safety profile and the pharmaceutical companies' handling of related information.

As GSK faces this new legal challenge from investors, the company has not yet responded to requests for comment. The ongoing Zantac saga continues to impact the pharmaceutical industry, raising questions about drug safety, corporate responsibility, and the long-term consequences of popular medications.