As of 29 June 2010, AstraZeneca was defending 10,363 served or answered lawsuits in the US involving 22,412 plaintiff groups. To date, approximately 2,901 additional cases have been dismissed by order or agreement and approximately 1,826 of those cases have been dismissed with prejudice. Approximately 72% of the plaintiffs’ currently pending Seroquel claims are in state courts (primarily Delaware, New Jersey, New York, and Alabama) with the other approximately 28% pending in the federal courts. Although most of the federal cases have been consolidated for pre-trial purposes into a Multi-District Litigation (MDL) in the Middle District of Florida, the claims of approximately 1,000 plaintiffs have been consolidated before a single federal court in California.
LONDON - (Mealey's) AstraZeneca PLC said July 29 that it has agreed in principle to settle with nearly 4,000 Seroquel product liability plaintiffs.
The company said settlement terms are confidential.
In notes to its second-quarter financial report, AstraZeneca said that as of July 27, mediation ordered by Judge Anne C. Conway in the Seroquel multidistrict litigation in the U.S. District Court for the Middle District of Florida "has resulted in agreements in principle on monetary terms, subject to various subsequent conditions, approvals and agreement on non-monetary terms, with the attorneys representing nearly 4,000 claimants."
"The specific terms of those conditional agreements in principle are by agreement, and at the request of the mediator, confidential at this time but would not be material in the context of the Company's quarterly results," AstraZeneca said.
As of June 29, AstraZeneca said it was defending against 10,363 served or answered Seroquel lawsuits in the United States involving 22,412 plaintiff groups. It said about 72 percent of the cases are in state courts, primarily Delaware, New Jersey, New York and Alabama. The remaining 28 percent are in the MDL court.
As of July 8, the Judicial Panel on Multidistrict Litigation reported that there were 6,217 active MDL cases, down from a high of 8,187.
Claims of about 1,000 plaintiffs are consolidated in one federal court in California, AstraZeneca said.
In addition, AstraZeneca said it is aware of about 176 additional cases representing about 3,661 plaintiffs that have been filed but not yet served. It said some of the cases involve other drug manufacturers, such as Eli Lilly and Co., Janssen Pharmaceutica Inc. and/or Bristol-Myers Squibb Co.
AstraZeneca is also aware of approximately 176 additional cases (approximately 3,661 plaintiffs) that have been filed but not yet served and has not determined how many additional cases, if any, may have been filed. Some of the cases pending against AstraZeneca also include claims against other pharmaceutical manufacturers such as Eli Lilly & Company, Janssen Pharmaceutica, Inc. and/or Bristol-Myers Squibb Company.
The MDL Court on 13 May 2010 issued its Final Pretrial Order and Suggestion of Remand, and the Judicial Panel for Multi-District Litigation (JPML) on 21 June 2010 issued its Conditional Remand Order, which AstraZeneca intends to oppose.
As previously disclosed, the first Seroquel product liability trial was conducted by a New Jersey state court and resulted in a jury verdict in favour of AstraZeneca on 18 March 2010. The jury found that AstraZeneca adequately warned the plaintiff’s physicians of the risks of diabetes from treatment with Seroquel. Plaintiffs have appealed that jury verdict.
Although five cases had been scheduled to start trials before the Federal District Court for the Middle District of Florida beginning in July 2010, the plaintiffs voluntarily dismissed the cases with prejudice before trial. At present, trials have been set in multiple jurisdictions where the courts are presiding over consolidated cases, including Delaware, New Jersey, and the Federal District Court for the Middle District of Florida. Additionally, a single case pending in California state court has been set for trial. These trial settings begin in November 2010 and continue through 2012.
Judge Anne Conway, who is presiding over the Seroquel federal Multi-District Litigation, ordered the parties to mediate their claims with a court-appointed mediator. The mediation process is ongoing, with meetings scheduled with multiple firms throughout the summer.
During July 2010, and as of 27 July 2010, that mediation process has resulted in agreements in principle on monetary terms, subject to various subsequent conditions, approvals and agreement on non-monetary terms, with the attorneys representing nearly 4,000 claimants. The specific terms of those conditional agreements in principle are by agreement, and at the request of the mediator, confidential at this time but would not be material in the context of the Company’s quarterly results.
As of 30 June 2010, legal defence costs of approximately $711 million have been incurred in connection with Seroquel-related product liability claims. The first $39 million is not covered by insurance.
AstraZeneca has product liability insurance dating from 2003 that is considered to respond to the vast majority of the Seroquel-related product liability claims. This insurance provides cover for legal defence costs and potential damages amounts. The insurers that issued the applicable policies for 2003 have disputed coverage for Seroquel-related product liability claims on various grounds. In April 2010, AstraZeneca settled its claims against several of its insurers for legal costs incurred defending the Seroquel-related product liability claims immediately in excess of AstraZeneca’s self-insured retention for an amount approximately equal to the receivable that had been recorded and as a result there will be no further impact on Group profit arising from this insurance settlement.
AstraZeneca currently believes that there are likely to be disputes with the remainder of its insurers about the availability of coverage under additional insurance policies. As of 30 June 2010, legal defence costs of approximately $96 million have been incurred in connection with Seroquel-related product liability claims which AstraZeneca believes to be covered by these additional insurance policies.
AstraZeneca believes that it is more likely than not that further insurance recoveries will be secured under the additional policies, but there can be no assurance of this or the amount of any potential future recovery.
In addition, given the status of the litigation currently, legal defence costs for the Seroquel claims, before damages, if any, are likely to exceed the total stated upper limits of the applicable insurance policies.