Pfizer 2010 Annual Report Download - page 106

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
determination by the U.S. Supreme Court with regard to defendants’ petition for certiorari seeking reversal of the Third Circuit’s
decision. In May 2010, the U.S. Supreme Court denied defendants’ petition for certiorari, and the case has been remanded to the
District Court for further proceedings.
•Other
Pfizer and several predecessor and affiliated companies, including Monsanto Company (Monsanto), are defendants in an action
brought by Brigham Young University (BYU) and a BYU professor in the U.S. District Court for the District of Utah alleging, among
other things, breach by Monsanto of a 1991 research agreement with BYU. Plaintiffs claim that research under that agreement led to
the discovery of Celebrex and that, as a result, they are entitled to a share of the profits from Celebrex sales. Plaintiffs seek, among
other things, compensatory and punitive damages.
Various Drugs: Off-Label Promotion Actions
•Shareholder Derivative Actions
Beginning in September 2009, a number of shareholder derivative actions were filed in the U.S. District Court for the Southern
District of New York, the Supreme Court of the State of New York, County of New York, and the Court of Chancery of the State of
Delaware against certain of our current and former officers and directors. Pfizer is named as a nominal defendant. These actions
allege that the individual defendants breached fiduciary duties by, among other things, causing or allowing Pfizer to engage in
off-label promotion of certain drugs, including Bextra. Damages in unspecified amounts and other unspecified relief are sought on
behalf of Pfizer. In November 2009, the federal cases were consolidated in the Southern District of New York (In re Pfizer Inc
Shareholder Derivative Litigation).
In June 2010, the action in state court in New York was stayed pending the outcome of the consolidated federal action. In July 2010,
the plaintiffs appealed the stay order to the Appellate Division of the Supreme Court of the State of New York. In August and
September 2010, respectively, the two actions in state court in Delaware were stayed pending the outcome of the consolidated
federal action.
In December 2010, the court in the consolidated federal action granted preliminary approval of a settlement agreement among the
parties and scheduled a hearing in March 2011 to consider final approval. Subject to final court approval, the settlement agreement
provides, among other things, that (i) Pfizer will create a new Regulatory and Compliance Committee of its Board of Directors to
monitor the Company’s compliance with applicable legal and regulatory healthcare requirements, and (ii) the Company’s directors
and officers liability insurance carriers will establish a $75 million fund, a portion of which will be used to pay the plaintiffs’ legal fees
and expenses and the balance of which will be available to fund the activities of the new Regulatory and Compliance Committee for
a period of five years. In connection with the settlement agreement, the defendants denied any wrongdoing related to the claims
asserted in the action.
•Securities Action
In May 2010, a purported class action was filed in the U.S. District Court for the Southern District of New York against Pfizer and
several of our current and former officers. The complaint alleges that the defendants violated federal securities laws by failing to
disclose that Pfizer was engaged in off-label marketing of certain drugs. Plaintiffs seek damages in an unspecified amount.
•Actions by Health Care Service Corporation
In June 2010, Health Care Service Corporation (HCSC), for itself and its affiliates, Blue Cross and Blue Shield plans in Illinois, New
Mexico, Oklahoma and Texas, filed an action against us in the U.S. District Court for the Eastern District of Texas. In July 2010,
HCSC amended its complaint. The complaint, as amended, alleges that we engaged in deceptive marketing activities, including
off-label promotion, and the payment of improper remuneration to health care professionals with respect to Bextra and Celebrex in
violation of, among other things, the federal Racketeer Influenced and Corrupt Organizations (RICO) Act and the Illinois Consumer
Fraud Act. In December 2010, this action was transferred to the Multi-District Litigation (In re Celebrex and Bextra Marketing, Sales
Practices and Product Liability Litigation MDL-1699) in the U.S. District Court for the Northern District of California. In July 2010,
HCSC also filed a separate lawsuit against us in the U.S. District Court for the Eastern District of Texas including substantially
similar allegations regarding Geodon, Lyrica and Zyvox. In both actions, HCSC seeks to recover the amounts that it paid for the
specified drugs on behalf of its members in Illinois, New Mexico, Oklahoma, and Texas, as well as treble damages and punitive
damages.
Hormone-Replacement Therapy
Pfizer and certain wholly owned subsidiaries and limited liability companies, including Wyeth, along with several other
pharmaceutical manufacturers, have been named as defendants in numerous lawsuits in various federal and state courts alleging
personal injury resulting from the use of certain estrogen and progestin medications primarily prescribed for women to treat the
symptoms of menopause. Plaintiffs in these suits allege a variety of personal injuries, including breast cancer, ovarian cancer, stroke
and heart disease. Certain co-defendants in some of these actions have asserted indemnification rights against Pfizer and its
affiliated companies. The cases against Pfizer and its affiliated companies involve one or more of the following products, all of which
remain approved by the FDA: femhrt (which Pfizer divested in 2003); Activella and Vagifem (which are Novo Nordisk products that
were marketed by a Pfizer affiliate from 2000 to 2004); Premarin, Prempro, Aygestin, Cycrin and Premphase (which are legacy
Wyeth products); and Provera, Ogen, Depo-Estradiol, Estring and generic MPA (which are legacy Pharmacia & Upjohn products).
The federal cases have been transferred for consolidated pre-trial proceedings to a Multi-District Litigation (In re Prempro Products
Liability Litigation MDL-1507) in the U.S. District Court for the Eastern District of Arkansas. Certain of the federal cases have been
remanded to their respective District Courts for further proceedings including, if necessary, trial.
104 2010 Financial Report