Pfizer 2010 Annual Report Download - page 109

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
certain procedures. Some of the vaccine recipients who have sued Wyeth to date may not have satisfied the conditions to filing a
lawsuit that are mandated by the Vaccine Act. The claims brought by parents for, among other things, loss of services and loss of
consortium of the injured child are not covered by the Vaccine Act.
In 2002, the Office of Special Masters of the U.S. Court of Federal Claims established an Omnibus Autism Proceeding with
jurisdiction over petitions in which vaccine recipients claim to suffer from autism or autism spectrum disorder as a result of receiving
thimerosal-containing childhood vaccines and/or the measles, mumps and rubella (MMR) vaccine. There currently are several
thousand petitions pending in the Omnibus Autism Proceeding. Special masters of the court have heard six test cases on
petitioners’ theories that either thimerosal-containing vaccines in combination with the MMR vaccine or thimerosal-containing
vaccines alone can cause autism or autism spectrum disorder.
•In February 2009, special masters of the U.S. Court of Federal Claims rejected the three cases brought on the theory that a
combination of MMR and thimerosal-containing vaccines caused petitioners’ conditions. After these rulings were affirmed by the U.S.
Court of Federal Claims, two of them were appealed by petitioners to the U.S. Court of Appeals for the Federal Circuit. In 2010, the
Federal Circuit affirmed the decisions of the special masters in both of these cases.
•In March 2010, special masters of the U.S. Court of Federal Claims rejected the three additional test cases brought on the theory that
thimerosal-containing vaccines alone caused petitioners’ conditions. Petitioners did not seek review by the U.S. Court of Federal
Claims of the decisions of the special masters in these latter three test cases, and judgments were entered dismissing the cases in April
2010.
•Petitioners in each of the six test cases have filed an election to bring a civil action.
Pristiq
In late 2007 and early 2008, the following actions were filed in various federal courts: (i) a purported class action alleging that Wyeth
and certain former officers of Wyeth violated federal securities laws by misrepresenting the safety of Pristiq during the period before
the FDA’s issuance in July 2007 of an “approvable letter” for Pristiq for the treatment of vasomotor symptoms, which allegedly
caused a decline in the price of Wyeth stock; (ii) a shareholder derivative action alleging that certain former officers of Wyeth and
certain former directors of Wyeth, two of whom are now directors of Pfizer, breached fiduciary duties and violated federal securities
laws by virtue of the aforementioned alleged misrepresentation; and (iii) a purported class action against Wyeth, the Wyeth Savings
Plan Committee, the Wyeth Savings Plan-Puerto Rico Committee, the Wyeth Retirement Committee and certain former Wyeth
officers and committee members alleging that they violated certain provisions of ERISA by maintaining Wyeth stock as an
investment alternative under certain Wyeth plans notwithstanding their alleged knowledge of the aforementioned alleged
misrepresentation.
The U.S. District Court for the Southern District of New York dismissed the ERISA action and denied the plaintiff’s motion to amend
the complaint in March and August 2010, respectively. In September 2010, the plaintiff appealed both of those rulings to the U.S.
Court of Appeals for the Second Circuit. In November 2010, the plaintiff withdrew the appeal, but reserved the right to reinstate the
appeal by June 2011. In addition, in January 2011, the shareholder derivative action was voluntarily dismissed by the plaintiff. The
purported securities class action remains pending.
C. Commercial and Other Matters
Acquisition of Wyeth
In 2009, a number of retail pharmacies in California brought an action against Pfizer and Wyeth in the U.S. District Court for the
Northern District of California. The plaintiffs allege, among other things, that our acquisition of Wyeth violates various federal
antitrust laws by creating a monopoly in the manufacture, distribution and sale of prescription drugs in the U.S. In April 2010, the
court granted our motion to dismiss the second amended complaint, and the plaintiffs filed a notice of appeal to the U.S. Court of
Appeals for the Ninth Circuit.
Acquisition of King Pharmaceuticals, Inc.
In October 2010, several purported class action complaints were filed in federal and state court in Tennessee by shareholders of
King Pharmaceuticals, Inc. (King) challenging Pfizer’s acquisition of King. King and the individuals who served as the members of
King’s Board of Directors at the time of the execution of the merger agreement (the King Director Defendants) are named as
defendants in all of these actions; Pfizer and Parker Tennessee Corp., a subsidiary of Pfizer, also are named as defendants in most
of these actions. The plaintiffs generally allege that (i) the King Director Defendants breached their fiduciary duties to King and its
shareholders by authorizing the sale of King to Pfizer for what plaintiffs deem inadequate consideration, and (ii) King and, in the
actions in which they are named as defendants, Pfizer and Parker Tennessee Corp. breached and/or aided and abetted the other
defendants' alleged breaches of fiduciary duties. The complaint filed in federal court also alleges that King's Schedule 14D-9
recommendation statement for the tender offer contains false statements and omissions of material fact in violation of Sections
14(d)(4) and 14(e) of the Securities Exchange Act of 1934. The plaintiffs in all of these actions seek damages and rescission the
transaction. In November 2010, all of the actions filed in state court were consolidated in the Chancery Court for Sullivan County,
Tennessee Second Judicial District, at Bristol. The parties to the consolidated state court action have reached an agreement in
principle to resolve that action as a result of certain disclosures regarding the transaction made by King in its amended Schedule
14D-9 recommendation statement for the tender offer dated January 21, 2011. The proposed settlement is subject to, among other
things, court approval.
Average Wholesale Price Litigation
A number of states as well as most counties in New York have sued Pharmacia, Pfizer and other pharmaceutical manufacturers
alleging that they provided average wholesale price (AWP) information for certain of their products that was higher than the actual
prices at which those products were sold. The AWP is used to determine reimbursement levels under Medicare Part B and Medicaid
and in many private-sector insurance policies and medical plans. The plaintiffs claim that the alleged spread between the AWPs at
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