Jones v. Pfizer Inc.
Pfizer Securities Class Action Settles Days Before Trial; Investors Recover $400 Million
On July 30, 2015, the Honorable Alvin K. Hellerstein for the Southern District of New York approved a $400 million settlement obtained by Robbins Geller on the eve of trial against Pfizer.
The settlement represents a significant recovery for the class achieved by lead plaintiff Stichting Philips Pensioenfonds from Eindhoven in the Netherlands and class representative Mary K. Jones from Fayetteville, Arkansas. “We are pleased that Pfizer has agreed to resolve investors’ claims on the eve of the trial for $400 million, subject to court approval. We are grateful to our lawyers, Robbins Geller Rudman & Dowd LLP, for their expert counsel in this case,” said Jasper Kemme, Managing Director at Stichting Philips Pensioenfonds.
Pfizer is the world’s largest pharmaceutical manufacturer, and like many other manufacturers, was subject to intense scrutiny regarding the legality of its marketing practices. In fact, during the early 2000s, the U.S. government increasingly began cracking down on illegal off label promotion when a pharmaceutical company itself promotes a drug for unapproved uses, doses, or to unapproved populations. In the early 2000s, Pfizer was forced to settle certain off-label marketing investigations, but always insisted that it was the marketing practices of companies that Pfizer acquired that resulted in the settlements. Pfizer and its officers insisted publicly that the company itself did not engage in off-label promotion. Unbeknownst to investors, however, Pfizer was illegally promoting several of its own drugs off label to boost sales.
Robbins Geller’s attorneys and forensic accountants uncovered convincing evidence that Pfizer insiders were keenly aware of the enormous returns Pfizer earned through off-label promotion. In addition, the investigation revealed that Pfizer was aware that its actions would subject it to enormous fines, penalties, and exclusion from government programs. Despite these risks, Pfizer and its officers concealed from investors that it was earning substantial revenue from illegal promotion and was subject to an enormous government investigation into Pfizer’s off-label promotion of Bextra and other drugs.
Ultimately, Pfizer agreed to pay a $2.3 billion fine to resolve the off label marketing investigations.
Robbins Geller’s litigation team included partner Trig Smith who, through his tenacious efforts and thorough investigation, continuously fought off defendants’ attempts to have the case dismissed on loss causation grounds. “The fact that Pfizer attempted to muddy the loss causation issue by simultaneously announcing the $2.3 billion fine, which included the largest criminal fine in U.S. history, with the Wyeth merger, did not deter Trig Smith in the pursuit of the truth,” said Henry Rosen, one of the partners running the case.
“With the investigating team, Trig was able to determine that Pfizer’s attempt to circumvent loss causation was stymied when news of the Wyeth merger leaked 72 hours before Pfizer planned to announce the merger and that Pfizer suffered a huge reputational impact when it announced the fine.”
By the time lead trial counsel Michael J. Dowd joined the team, Robbins Geller’s investigation, spearheaded by partners Henry Rosen, Willow E. Radcliffe and Ryan Llorens, had spanned more than two years and included the review of more than 25 million pages of documents and the depositions of 45 fact witnesses knowledgeable about Pfizer’s marketing practices, internal controls, accounting procedures and public disclosures. “The outstanding result in this case would not have been achieved but for the tenacious investigation of our trial team,” according to Dowd. “The addition of trial counsel Jason A. Forge really helped move the case forward in response to defendants’ formidable reliance-on-counsel defense. This case is a testament to our Firm’s resources, experience and tenacity, which make it a leader in securities fraud litigation. No other firm filed this case for 15 months following the January 2009 announcement of the fine. Few other firms could have achieved this result in the face of the complicated loss causation, falsity and reliance-on-counsel issues.”
In approving the settlement, United States District Judge Alvin K. Hellerstein commended the Firm, noting that “[w]ithout the quality and the toughness that you have exhibited, our society would not be as good as it is with all its problems. So from me to you is a vote of thanks for devoting yourself to this work and doing it well. . . . You did a really good job. Congratulations.”
Jones v. Pfizer Inc., No. 1:10-cv-03864-AKH (S.D.N.Y.).