Pfizer 2009 Annual Report Download - page 99

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
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.
In April 2008, the court in the Multi-District Litigation granted preliminary approval with respect to the fairness of a proposed
settlement of the claims against 11 defendants, including Pharmacia, for a total of $125 million. It is expected that the court will
schedule a hearing for later this year to consider final approval of the settlement. If the settlement is approved, Pharmacia’s
contribution would be immaterial.
In addition, Wyeth is a defendant in AWP actions brought by certain states, which are not included in the Multi-District Litigation, as
well as AWP actions brought by most counties in New York, almost all of which are included in the Multi-District Litigation. Wyeth
also is a defendant in a purported class action in state court in New Jersey brought by a third-party payer. These actions against
Wyeth would not be included in the proposed settlement referred to in the previous paragraph.
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 Company 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 the result of its reorganization under Chapter 11 of the U.S. Bankruptcy Code, Solutia’s
indemnification obligations related to Former Monsanto’s chemical businesses are limited to sites that Solutia has owned or
operated. 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, but not limited to, any such
liabilities that Solutia assumed. Solutia’s and New Monsanto’s assumption of and agreement to indemnify Pharmacia for these
liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is
named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to
polychlorinated biphenyls.
Pharmacia Cash Balance Pension Plan
In 2006, several current and former employees of Pharmacia Corporation filed a purported class action in the U.S. District Court for
the Southern District of Illinois against the Pharmacia Cash Balance Pension Plan (the Plan), Pharmacia Corporation, Pharmacia &
Upjohn Company and Pfizer Inc. Plaintiffs seek monetary and injunctive relief on behalf of a class consisting of certain current and
former participants in the Plan who accrued a benefit in the Monsanto Company Pension Plan prior to its conversion to a cash
balance plan in 1997. In January 2002, after various corporate reorganizations, certain of the assets and liabilities of the Monsanto
Company Pension Plan were transferred to the Plan. Plaintiffs claim that the Plan violates the age-discrimination provisions of
ERISA by providing certain credits to such participants only to age 55. This action has been consolidated in the U.S. District Court
for the Southern District of Illinois (Walker, et al., v. The Monsanto Company Pension Plan et al.) with purported class actions
pending in that court that make largely similar claims against substantially similar cash balance plans sponsored by Monsanto
Company and Solutia, each of which was spun off by Pharmacia Corporation or a predecessor of Pharmacia Corporation. In May
2008, at the request of the parties, the court issued an order permitting the case to proceed as a class action. In June 2009, the
court granted our motion for summary judgment and dismissed the claims against the Plan, Pfizer and the two Pfizer subsidiaries. In
October 2009, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Seventh Circuit.
Trade Secrets Action in California
In 2004, Ischemia Research and Education Foundation (IREF) and its chief executive officer brought an action in California Superior
Court, Santa Clara County, against a former IREF employee and Pfizer. Plaintiffs allege that defendants conspired to misappropriate
certain information from IREF’s allegedly proprietary database in order to assist Pfizer in designing and executing a clinical study of
a Pfizer drug. In December 2008, the jury returned a verdict for compensatory damages of approximately $38.7 million. In March
2009, the court awarded prejudgment interest but declined to award punitive damages. In July 2009, the court granted our motion for
a new trial and vacated the jury verdict.
Trimegestone
Aventis filed a breach of contract action against Wyeth in the Commercial Court of Nanterre in France arising out of the December
2003 termination by Wyeth of an October 2000 agreement between Wyeth and Aventis relating to the development of hormone-
therapy drugs utilizing Aventis’ trimegestone (TMG) progestin. Aventis alleges that the termination was improper and seeks
monetary damages and injunctive relief. In January 2009, a three-judge tribunal rendered its decision in favor of Wyeth, denying all
of the relief sought by Aventis. Aventis has filed an appeal from the Commercial Court’s decision.
Environmental Matters
•Remediation Matters
In 2009, we submitted to the U.S. Environmental Protection Agency a corrective measures study report with regard to Pharmacia
Corporation’s discontinued industrial chemical facility in North Haven, Connecticut, and a revised site-wide feasibility study with
regard to Wyeth’s discontinued industrial chemical facility in Bound Brook, New Jersey.
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