CHAMPIX claims settled for $273 million in U.S., discontinued without costs in Canada
Notwithstanding a large settlement of similar litigation in the United States, the Ontario class proceeding Parker v. Pfizer Canada Inc. was discontinued without costs on April 20, 2017, demonstrating the strategic importance of litigation timing.
Background
The class proceeding involved a class of persons who had used the prescription drug varenicline (sold in Canada by Pfizer Canada Inc. under the brand name CHAMPIX®) as a treatment for nicotine addiction. The representative plaintiff, Mr. Parker, alleged that he and other members of the class had experienced neuropsychiatric adverse events (“NAEs”) as a consequence of ingesting CHAMPIX.
The evidence at certification
At the certification motion, the defendants Pfizer Canada Inc. and Pfizer Inc. argued that Mr. Parker had failed to meet the admittedly low-burden of showing some basis in fact for his claim. Justice Perell, however, found that the evidence adduced by Mr. Parker did establish some basis in fact for the common issues about a duty to warn, and also found “The contemporaneous or near contemporaneous neuropsychiatric events experienced by those using the drug provides some basis in fact to the claim that there was a failure to warn by the manufacturer of the drug.”
For reasons released June 21, 2012, Justice Perell certified common issues regarding the two corporate defendants’ alleged failure to warn of the risk of NAEs when using CHAMPIX.
American settlement
Shortly thereafter, in February of 2013, a similar claim in the United States regarding the use of varenicline settled for US$273 million. Fortunately for the defendants in the Ontario action, the Ontario action did not settle. The parties proceeded with documentary and oral discovery, and Pfizer Canada Inc. produced over 60,000 documents.
Awaiting better evidence
Before examinations for discovery had completed, Mr. Parker – presumably hopeful the results would support his allegations – decided it was appropriate to put the action on hold pending the outcome of a large-scale epidemiological clinical study referred to as the Evaluating Adverse Events in a Global Smoking Cessation Study (or “EAGLES Study”). The results of the EAGLES Study were released in April, 2016 (three years following the settlement in the United States). Disappointingly for Mr. Parker, the study did not support his allegations. The EAGLES Study showed no significant increase in neuropsychiatric adverse events attributable to varenicline.
Discontinuance
On that basis, Mr. Parker moved to have the action discontinued. Unsurprisingly, Pfizer Canada consented to a discontinuance without costs. Acknowledging that, in the face of the EAGLES Study results, Mr. Parker’s prospects of success were “remote”, Justice Perell granted the motion for discontinuance on a without costs basis.
Conclusion
It is not uncommon for Canadian class action litigation to progress behind similar litigation in the United States. In this case, this operated to the benefit of the defendants when additional scientific evidence relevant to the claims being made was released before a settlement or other disposition of the litigation occurred. Because Mr. Parker decided it was appropriate to await the outcome of the EAGLES Study, the defendants were able to obtain the results of the study before trial was imminent. Effectively, the delay allowed the science to catch up with the litigation, while in the United States the latter was ahead of the former which drove a settlement.
To the extent that a defendant foresees future study results being released that could affect findings of liability, this case demonstrates the strategic importance of any decision affecting the speed at which the litigation will progress.