Pfizer 2006 Annual Report Download - page 72

2006 Financial Report 71
Notes to Consolidated Financial Statements
Pfizer Inc and Subsidiary Companies
suits allege, among other things, fraud, unfair competition and
unfair trade practices and seek monetary and other relief,
including civil penalties and treble damages.
All of these state, county and purported class action suits were
transferred for consolidated pre-trial proceedings to a Multi-
District Litigation (In re Pharmaceutical Industry Average
Wholesale Price Litigation MDL-1456) in the U.S. District Court for
the District of Massachusetts. Certain of the state and private suits
have been remanded to their respective state courts. In November
2006, the claims against Pfizer in the Multi-District Litigation
were dismissed with prejudice; the claims against Pharmacia are
still pending.
D. Celebrex and Bextra Matters
In 2003, several purported class action complaints were filed in the
U.S. District Court for the District of New Jersey against Pharmacia,
Pfizer and certain former officers of Pharmacia. The complaints
allege that the defendants violated federal securities laws by
misrepresenting the data from a study concerning the
gastrointestinal effects of Celebrex. These cases have been
consolidated for pre-trial proceedings in the District of New
Jersey (Alaska Electrical Pension Fund et al. v. Pharmacia
Corporation et al.). In January 2007, the court certified a class
consisting of all persons who purchased Pharmacia securities
from April 17, 2000 through February 6, 2001 and were damaged
as a result of the decline in the price of Pharmacia’s securities
allegedly attributable to the misrepresentations. Plaintiffs seek
damages in an unspecified amount.
Pfizer is a defendant in product liability suits, including purported
class actions, in various U.S. federal and state courts and in certain
other countries alleging personal injury as a result of the use of
Celebrex and/or Bextra. These suits include a purported class
action filed in 2001 in the U.S. District Court for the Eastern
District of New York as well as actions that have been filed since
late 2004. In addition, beginning in late 2004, purported class
actions have been filed against Pfizer in various U.S. federal and
state courts and in certain other countries alleging consumer
fraud as the result of alleged false advertising of Celebrex and
Bextra and the withholding of information from the public
regarding the alleged safety risks associated with Celebrex and
Bextra. The plaintiffs in these consumer fraud actions seek
damages in unspecified amounts for economic loss. In September
2005, the U.S. federal product liability and consumer fraud actions
were transferred for consolidated pre-trial proceedings to a
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 2005, an action was filed by the Attorney General of the
State of Louisiana in the Civil District Court for Orleans Parish,
Louisiana, against Pfizer seeking to recover amounts paid by the
Louisiana Medicaid program for Celebrex and Bextra and for
medical services to treat persons allegedly injured by Celebrex or
Bextra. The action also seeks injunctive relief to prevent the sale
of Celebrex and any resumption of the sale of Bextra in Louisiana.
This action was removed to the U.S. District Court for the Eastern
District of Louisiana in August 2005 and then was transferred for
consolidated pre-trial proceedings to the same Multi-District
Litigation referred to in the preceding paragraph.
Beginning in late 2004, actions, including purported class and
shareholder derivative actions, have been filed in various federal
and state courts against Pfizer, Pharmacia and certain current and
former officers, directors and employees of Pfizer and Pharmacia.
These actions include: (i) purported class actions alleging that
Pfizer and certain current and former officers of Pfizer violated
federal securities laws by misrepresenting the safety of Celebrex
and Bextra; (ii) purported shareholder derivative actions alleging
that certain of Pfizer’s current and former officers and directors
breached fiduciary duties by causing Pfizer to misrepresent the
safety of Celebrex and, in certain of the cases, Bextra; and (iii)
purported class actions filed by persons who claim to be
participants in the Pfizer or Pharmacia Savings Plan alleging that
Pfizer and certain current and former officers, directors and
employees of Pfizer or, where applicable, Pharmacia and certain
former officers, directors and employees of Pharmacia, violated
certain provisions of the Employee Retirement Income Security Act
of 1974 (ERISA) by selecting and maintaining Pfizer stock as an
investment alternative when it allegedly no longer was a suitable
or prudent investment option. In June 2005, the federal securities,
fiduciary duty and ERISA actions were transferred for consolidated
pre-trial proceedings to a Multi-District Litigation (In re Pfizer Inc.
Securities, Derivative and “ERISA” Litigation MDL-1688) in the U.S.
District Court for the Southern District of New York.
E. Other Matters
Monsanto-Related Matters
In 1997, Monsanto Company (Former Monsanto) contributed
certain chemical manufacturing operations and facilities to a
newly formed corporation, Solutia Inc. (Solutia), and spun off the
shares of Solutia. In 2000, Former Monsanto merged with
Pharmacia & Upjohn to form Pharmacia Corporation (Pharmacia).
Pharmacia then transferred its agricultural operations to a newly
created subsidiary, named Monsanto Company (New Monsanto),
which it spun off in a two-stage process that was completed in
2002. Pharmacia was acquired by Pfizer in 2003 and is now a
wholly owned subsidiary of Pfizer.
In connection with its spin-off that was completed in 2002, New
Monsanto assumed, and agreed to indemnify Pharmacia for, any
liabilities related to Pharmacia’s former agricultural business.
New Monsanto is defending and indemnifying Pharmacia for
various claims and litigation arising out of or related to the
agricultural business.
In connection with its spin-off in 1997, Solutia assumed, and
agreed to indemnify Pharmacia for, liabilities related to Former
Monsanto’s chemical businesses. As a result, while Pharmacia
remains a defendant in various legal proceedings involving Former
Monsanto’s chemical businesses, Solutia manages the litigation
and is responsible for all costs and expenses and any judgment or
settlement amounts. In addition, in connection with its spin-off
that was completed in 2002, New Monsanto assumed, and agreed
to indemnify Pharmacia for, any liabilities primarily related to
Former Monsanto’s chemical businesses, including any such
liabilities that Solutia assumed. Solutia’s and New Monsanto’s
assumption of and agreement to indemnify Pharmacia for these