French pharmaceutical giant Sanofi-Aventis SA has settled a class action lawsuit brought by investors regarding the safety of a weight loss pill, which has been linked to severe psychiatric problems.
The company agreed to an all-cash settlement of $40 million, which was disclosed in a court filing, which still requires U.S. District judge’s approval.
It resolves claims that came after the U.S. Food and Drug Administration (FDA) advisory committee on June 13, 2007 urged that the agency reject Sanofi’s drug rimonabant, known by the trade names Acomplia and Zimulti, regarding concerns that use of this drug could increase severe depression, suicidal thoughts, as well as other serious psychiatric issues.
Plaintiffs in the lawsuit alleged that Sanofi executives made false and misleading statements about the safety of their obesity drug and about the likelihood of the drug being approved by the FDA, which resulted in artificially inflated prices of Sanofi stock. Zimulti was marketed to work by affecting the brain’s hunger signal, reducing appetite.
Sanofi allegedly “positioned rimonabant in the United States as the first ‘magic pill’ that would help people shed pounds without serious side effects.” But according to the lawsuit, Sanofi learned in a clinical study, while seeking FDA approval, that the drug was linked to suicidal ideation and depression. “In the rimonabant studies, suicidal ideation was specifically tracked and characterized as a serious adverse event,” plaintiffs allege.
Due to patent issues with other drugs, the lawsuit claims, FDA approval of rimonabant was integral to Sanofi’s investors. Despite receiving an FDA letter requesting additional safety data regarding rimonabant, Sanofi allegedly continued to declare to investors that its’ drug was safe and likely to receive FDA approval. According to court documents, this included a conference call with analysts and investors during which Sanofi stressed the safety of the drug, stating, “there is no increase in cases of depression.” But supplemental data from a clinical trial reportedly showed 50 cases of suicidal ideation in patients receiving rimonabant, compared with 14 cases in patients who received a placebo.
As a result of the reported link between the weight loss and suicidal ideation, the FDA rejected rimonabant, causing Sanofi stock value to drop. It was further alleged that this led European regulators to ban sales of the drug.
Sanofi is the world’s fourth-largest pharmaceutical company as measured by prescription drug sales.
Plaintiff’s led by the Hawaii Annuity Trust for Operating Engineers filed suit in the U.S. District Court for the Southern District of New York in 2007. The amended class action complaint alleged that while Sanofi was seeking regulatory approval for Zimulti in 2006, they concealed clinical tests, which led to FDA’s concerns regarding a link between the drug and a significant increased risk of suicidal thoughts. Sanofi publicized the drug as a possible “blockbuster” to treat obesity, with only mild side effects.
During the class period, the plaintiffs said the analysts forecast that annual sales of the drug could top $4.2 billion by 2011. In opposing class certification, Sanofi argued that the claims failed to meet the requirements for typicality, adequacy, predominance and superiority.
More important than the drug company trying to deceive their investors is how Sanofi put profits before patient safety. Even though clinical trial data revealed increased risks of suicidal thoughts in patients, they tried to conceal these findings just to keep their profits up. Do you think this was a fair settlement?
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