Zantac Recall Takes $186 Million Bite Out of Sanofi Profits

Published on February 10, 2020 by Sandy Liebhard

Sanofi is feeling the effects of last year’s massive Zantac recall – especially on its bottom line.

According to the French drug maker’s most recent earnings report, U.S. sales at its consumer health division dove nearly 13% during the fourth quarter of 2019, largely due to a €169 million ($186 million) write down that followed the Zantac debacle.

Why Zantac Was Recalled

Sanofi was just one of numerous pharmaceutical companies to recall Zantac and other ranitidine-containing heartburn drugs last year, after the online pharmacy Valisure detected excessive levels of N-Nitrosodimethylamine (NDMA) – a probable human carcinogen — in every sample it tested.

Valisure petitioned the U.S. Food & Drug Administration (FDA) for a Zantac recall in September, noting that the levels found often far exceeded the agency’s recommended guidelines for NDMA intake. The company also asserts that the instability of the ranitidine molecule results in the production of NDMA when the drug is subjected to conditions that mimic human digestion.

While FDA’s own tests have since found unacceptable levels in some Zantac products, the agency has yet to determine whether or not ranitidine might produce NDMA in the human stomach.

Zantac Lawsuits Mounting in U.S. Courts

Earlier this month, a second company — Emery Pharma – also petitioned the FDA for a Zantac recall, after its testing suggested ranitidine could produce NDMA when subjected to high temperatures typically encountered during storage and shipment.

Although the FDA has yet to act on either petition, drug makers around the world have opted to voluntarily recall their Zantac and ranitidine products. Various retailers – including CVS, Walgreens, Walmart, and Rite-Aid – have also removed the medications from store shelves.

Zantac lawsuits began mounting in courts around the United States shortly after the NDMA problems became public. These lawsuits include individual personal injury claims for various cancers, as well as class actions that seek refunds and other economic damages for consumers who purchased potentially contaminated medications.

Last week, the U.S. Judicial Panel on Multidistrict Litigation (JPML) consolidated all federally filed claims stemming from the Zantac recall in the U.S. District Court, Southern District of Florida, where the docket will undergo centralized pretrial proceedings before a single judge. While the Panel initially transferred just 15 cases to the Southern District of Florida, many legal experts believe the new multidistrict litigation will eventually grow to include hundreds of similar Zantac lawsuits.