Nov. 21 (Bloomberg) -- Pfizer Inc. destroyed documents about the development of its Celebrex and Bextra arthritis drugs while denying the existence of electronic databases containing millions of files about the medicines, lawyers for some of the company’s investors said in court filings.
Pfizer officials should be sanctioned for denying they had a centralized filing system for Celebrex and Bextra files and discarding records after investors filed suit accusing the company of misleading them about the drugs’ prospects, shareholders’ attorneys said in a court filing that was unsealed Nov. 16 in federal court in Manhattan. Pfizer executives later acknowledged the company maintained more than 2,000 so-called e-Rooms that stored documents about the drugmaker’s products, the lawyers said.
“Defendants destroyed documents in bad faith and compounded their initial misconduct by making false statements about the existence of centralized databases,” Jay Eisenhofer, a New York-based attorney serving as lead counsel in the investors’ securities-fraud suit, said in the filing.
Last month, Pfizer officials agreed to pay $164 million to settle claims by a separate group of investors that the drugmaker distorted the results of a study about Celebrex’s safety profile.
Pfizer officials said today they are asking the judge in New York to throw out investors’ claims over statements about the drugs and called the sanctions request over the company’s document handling “baseless.”
Pfizer officials also are seeking sanctions against investors who have sued over the company’s statements about Celebrex and Bextra for their failure to “preserve electronic documents relevant to this litigation,” Chris Loder, a company spokesman, said in an e-mailed statement.
“Pfizer has complied with its document production obligations in this case,” Loder said. The drugmaker is looking “forward to an adjudication of this case on the merits.”
U.S. District Judge Laura Taylor Swain in New York, who is presiding over a series of investor suits filed in 2004, ruled in March that shareholders could band together to sue Pfizer over its statements about Celebrex and Bextra.
No trial date has been set in the case against New York-based Pfizer, the world’s largest drugmaker. The company opposed shareholders’ requests to have their cases granted class-action status.
Celebrex is Pfizer’s fifth best-selling medicine, with almost $2.5 billion in annual sales. Pfizer officials pulled Bextra off the market in 2005 after it was linked to an increased risk of heart attacks and a rare skin condition.
In 2009, Pfizer agreed to pay $2.3 billion to settle a U.S. investigation into illegal marketing of 10 of its drugs, including Bextra. Pharmacia & Upjohn Co., a Pfizer unit, pleaded guilty to a criminal charge related to misbranding drugs, according to the U.S. Justice Department. The fine was one of the largest in U.S. legal history.
Investors sued the drugmaker accusing executives of making misleading statements about “the safety and marketability of Pfizer’s Celebrex and Bextra products” over a four-year period starting in 2000, according to a 2004 court filing.
“Defendants knew or recklessly disregarded that the undisclosed health risks posed by these drugs would limit their marketability and further knew that the potential financial liability Pfizer faced from the harms these drugs caused posed a serious threat to the company’s finances,” according to the investors’ suit.
Eisenhofer and other lawyers for investors contend in the unsealed court filings that Pfizer failed to properly hand over documents in pretrial exchanges and destroyed records related to Celebrex and Bextra.
At one point, the company argued the existence of the “e-Rooms were a figment of plaintiffs’ imagination,” the lawyer said. Pfizer officials later acknowledged the rooms existed and turned over documents stored there electronically, investors’ lawyers said.
The lawyers also complained that Pfizer’s technical staff undertook “two large-scale e-Room dismantling projects while this case was pending” and still are failing to provide “vital piece of information,” including database memberships, according to the filing.
60 Million Documents
Pfizer’s lawyers counter in their filings that they have turned over more than 60 million documents related to Bextra and Celebrex and the company never misled their opponents about electronically stored material.
“At no time did Pfizer ever mislead plaintiffs concerning the existence of databases,” the company’s lawyers said in the filing unsealed Nov. 16. “Stating that certain categories of documents were not maintained in a centralized location is not the same as representing that no databases exist.”
Pfizer turned over the equivalent of 220 boxes of files from the e-Rooms once plaintiffs sought the information and spent many hours locating “systems that had long been integrated or retired” to produce the requested material, the lawyers said.
The data Pfizer is accused of failing to turn over about the drugs’ safety profiles was in the possession of federal regulators and had been publicly disclosed, the lawyers added.
Nothing the company has done in finding and handing over relevant material about Celebrex and Bextra “warrants sanctions,” Pfizer’s attorneys said.
The case is In re Pfizer Inc. Securities Litigation, 04-cv-9866, U.S. District Court, Southern District of New York (Manhattan).
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