Pfizer Settles Antitrust Allegations for $25.5M Over Effexor XR

Pfizer has agreed to another settlement, this time for $25.5 million, to resolve allegations that it conspired to delay a cheaper generic version of the antidepressant Effexor XR reaching the market.

This settlement follows an earlier $39 million settlement related to the case filed last month in a New Jersey federal court. 

The plaintiffs — purchasers of the antidepressant — alleged they paid artificially higher prices for Effexor XR because Wyeth and Teva conspired to quash generic competition for the drug. 

Wyeth was accused of giving Teva a financial kickback to delay its less expensive version from hitting the market.

What is Effexor XR?

Effexor XR is a prescription medication used mainly to treat depression and various anxiety disorders. Its active ingredient is venlafaxine. 

It was first approved by the U.S. Food and Drug Administration (FDA) in 1997. Since then, Effexor XR has become a commonly prescribed medication in the treatment of mood and anxiety disorders, alongside other antidepressants.

Wyeth generated annual sales of $4 billion from Effexor XR, its biggest product, before Teva launched a generic alternative in 2010, Reuters reports. Pfizer acquired Wyeth in 2009 for $67 billion.

What does the settlement entail?

The settlement money would go to a proposed class “indirect purchasers” who bought Effexor XR from intermediaries rather than from Wyeth itself, Reuters reports.

The proposed deal allocates 78% of the funds to third-party payors, like insurance companies and employee health plans, and 22% to individual consumers. Attorneys for the plaintiffs would take about $8.7 million in fees.

Pfizer said in a statement the claims are “without merit,” but that a settlement was the best way to end the litigation.

News on the heels of $39M settlement

The news comes after Pfizer subsidiary Wyeth last month agreed to pay a $39 million settlement to end the claims. That settlement was with plaintiffs who bought “direct” from Wyeth. This latest settlement is with plaintiffs who bought through an intermediary.

If approved, the settlement will end more than 12 years of litigation against Wyeth alleging it violated U.S. antitrust law in its dealings with Teva. The case against Teva will continue.

Some retailers such as Kroger, Walgreens, CVS, Meijer and Rite Aid previously settled individual actions against Wyeth.

Pfizer’s history of large settlements

Pfizer is no stranger to large class action settlements. In 2016, Wyeth and Pfizer Inc. agreed to pay $784.6 million to resolve allegations that Wyeth knowingly reported to the government false and fraudulent prices on two of its proton pump inhibitor (PPI) drugs, Protonix Oral and Protonix IV. 

In 2021, Pfizer agreed to pay $345 million to resolve claims by consumers who say they overpaid for EpiPens due to anticompetitive practices by the drugmaker and the company that markets the emergency allergy treatment, Mylan.

In 2009, Pfizer and its subsidiary Pharmacia & Upjohn Company Inc. agreed to pay $2.3 billion to resolve criminal and civil liability arising from the illegal promotion of certain pharmaceutical products. It was at the time the largest health care fraud settlement in the history of the Department of Justice, the agency said.

The plaintiffs are represented by James Cecchi of Carella, Byrne, Cecchi, Brody & Agnello and Michael Buchanan of Motley Rice.

The Effexor XR class action lawsuit is In re: Effexor XR Antitrust Litigation, Case No. 3:11-cv-05479, in the U.S. District Court for the District of New Jersey,