Oct. 17 (Bloomberg) -- Pfizer Inc. will pay $894 million to resolve most legal claims that its painkillers Celebrex and Bextra caused heart attacks and strokes.

The amount, which includes $745 million to settle 90 percent of the lawsuits claiming injuries from the products, will be booked in third-quarter earnings, New York-based Pfizer said today. The company faced about 8,000 lawsuits over the drugs, according to Jayne Conroy, a plaintiffs' attorney.

Pfizer, the world's biggest drugmaker, was being sued over allegations that the drugs increased the risk of heart attacks or strokes after a similar pill, Merck & Co.'s Vioxx, was pulled from the market over the same side effects in 2004. Celebrex is still sold, generating $2.3 billion for Pfizer last year, while Bextra was recalled over a rare skin condition in 2005.

``Anytime that you have an opportunity to resolve litigation, which is inevitably something that creates uncertainty, in terms that make sense for the people and corporation, it is a good thing to do,'' Amy Schulman, Pfizer's general counsel, said in a telephone interview.

Pfizer said in the statement that, under the ``agreements in principle,'' it will also pay $60 million to 33 states and Washington, D.C., over alleged illegal promotion of Bextra and $89 million for consumer fraud lawsuits.

`In Principle'

``Pfizer's disclosure of a possible agreement is premature and inappropriate,'' Connecticut Attorney General Richard Blumenthal said today in a statement. ``No settlement has been filed or approved by the court.''

Blumenthal said his office was working to resolve the claims. Spokeswoman Tara Stapleton declined to comment further. Pfizer spokesman Ray Kerins said the agreements are ``in principle.''

Pfizer fell 6 cents to $16.91 at 4 p.m. in New York Stock Exchange composite trading. The stock has fallen 31 percent this year. The company is scheduled to report third-quarter results Oct. 21.

The settlement is the fourth largest in the U.S. this year, according to Bloomberg data. Schulman declined to say how many people had sued Pfizer over the drugs or how much the company had spent defending itself. Merck agreed in November 2007 to pay $4.85 billion to resolve 85 percent of the 26,000 cases it was facing over Vioxx and spent $1.5 billion on legal fees.

``The numbers we agreed to are fair numbers for our clients,'' Paul Hanly, a member of a group of lawyers for the drugs' users, said today in a phone interview.

`Substantial' Amounts

Hanly, who represents about 180 plaintiffs, said the amounts were ``substantial,'' declining to provide details.

The Pfizer agreements, reached yesterday, came after several pre-trial court rulings in the company's favor, Schulman said.

In November, U.S. District Judge Charles R. Breyer, who oversaw the federal cases in San Francisco, ruled there was insufficient scientific evidence that Celebrex caused heart attacks or strokes at the 200-milligram dose. The ruling was a ``setback'' for lawyers with a lot of Celebrex cases, Hanly said.

``His ruling shot out the bulk of the Celebrex cases,'' Hanly said. ``The litigation became financially more manageable for Pfizer. It was easier for Pfizer to settle the Bextra cases because Bextra is a drug no longer on the market, whereas Celebrex is still a blockbuster for them.''

No cases reached trial. Pfizer, in the statement, said it admits no wrongdoing.

`Long Fight'

Settlement talks began in May, just before the first trial was scheduled to start in San Francisco, Conroy said. The personal-injury settlements were negotiated separately with individual plaintiffs' lawyers, she said. The Wall Street Journal reported in May that firms were offered $40,000 to $50,000 a client to resolve Bextra cases and as much as $200,000 a client for Celebrex.

``It was a long fight for us, a difficult fight,'' Conroy said.

The settlement doesn't cover securities fraud litigation filed over the drugs, Pfizer spokesman Chris Loder said in an e- mail. Shareholders have accused the company of issuing false and misleading statements about the safety and marketability of Bextra and Celebrex. About 30 cases have been consolidated before U.S. District Judge Laura Taylor Swain in Manhattan. Swain ruled in July that investors who sued had made enough allegations for some of the claims to go forward.

Pfizer acquired Celebrex and Bextra as part of its more than $60 billion acquisition of Pharmacia Corp. in 2003. Bextra, Celebrex, and Vioxx are part of a class of medicines called non- steroidal anti-inflammatory drugs, which also include ibuprofen and naproxen. U.S. regulators have warned that these drugs may increase the risk of heart attack and stroke.

Celebrex Study

Pfizer said there is no evidence that Celebrex, when taken at lower doses, poses a risk to the heart. Patients taking the biggest Celebrex dose of 400 milligrams twice a day tripled their chance of a heart attack or stroke, compared with people taking a placebo, according to a study presented in March at the American College of Cardiology meeting.

A more definitive assessment of Celebrex risks won't come until 2010 or 2011, when a $100 million study of 20,000 patients comparing Celebrex with the pain pills ibuprofen and naproxen is expected to be completed by the Cleveland Clinic in Ohio.

To contact the reporters on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net; Sophia Pearson in Wilmington, Delaware Spearson3@bloomberg.net;

Last Updated: October 17, 2008 16:45 EDT