Zicam Investor Lawsuit News

Zicam Investor Lawsuit

Supreme Court Ruling on Matrixx

In a narrow judgment, the U.S. Supreme Court has declared that the class-action lawsuit filed by investors against Matrixx Initiatives Inc can proceed, declaring that the plaintiffs had shown enough of a claim for the case to go forward. The court ruling deals the pharmaceutical company a big defeat, declaring that the drugmaker had failed to reveal initial reports of adverse side effects from its Zicam remedy.

The Supreme Court of the United States has rejected limits to lawsuits against drug makers. The court ruled in favor of investors, who had filed a securities fraud class action against the manufacturer of the now-discontinued Zicam nasal cold remedies, alleging that the company violated the §10(b) Securities Exchange Act of 1934 and Securities and Exchange Commission Rule10b–5 by concealing 23 reports of people who had complained of loss of sense of smell after using Zicam as early 2004.

The investors alleged that the pharmaceutical company issued misleading statements on the possible link between Zicam Cold Remedy and loss of sense of smell. The U.S. Supreme Court judgment gives shareholders more leeway to file a lawsuit against pharmaceutical and biotechnology companies for not disclosing reports of dangerous side effects of drugs manufactured by them.
In a unanimous judgment, the justices ruled that the petitioners had every right to be informed of the side effects of the Zicam nasal spray and gel, manufactured by Matrixx. The judges declared that Matrixx should defend against these accusations of fraud, which claimed that it failed to disclose the side effects of its spray and gel. The high court ruled that, under the federal securities law, even less definitive evidence of side effects is enough to require disclosure.

The lawsuit also cites nine other lawsuits filed by people affected by recalled Zicam nasal products from October 2003 to January 2004, alleging that the drug maker either omitted or concealed material information about the safety of the Zicam products. Numerous consumer lawsuits have also been filed against the pharmaceutical company for “product liability, negligence, fraud, and breach of warranties.”

The Supreme Court ruling has made it easier for investors to take pharmaceutical companies court for deliberately withholding information about a drug or product.

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