25 Mar AHRP – In a unanimous decision, the Supreme Court ruled that investors have a right to sue a company for its failure to disclose reports of adverse drug effects to shareholders – even if those reports do not rise to the level of “statistical significance.”

The ruling allows the case, Matrixx Initiatives v. Siracusano, to move forward.

The shareholder lawsuit alleged that the company knew that its over-the counter cold remedy, Zicam was linked to adverse effects – the loss of sense of smell and insomnia – but failed to inform its investors who could have taken action to prevent them from losing their money. 

Matrixx claimed the adverse effect reports did not reach “statistical significance” and, therefore, did not have to be disclosed. The Court explicitly shut down that argument in their decision. 

During arguments in the case (Jan 10) Justice Roberts made it clear that the issue before the court was not whether Zicam caused anosmia, but whether investors should have been informed earlier about reports of anosmia drifting in from physicians and patients.

“I’m an investor in Matrixx; I worry whether my stock price is going to go down,” he said. “You can have some psychic come out and say Zicam is going to cause a disease, with no support whatsoever, but if it causes the stock to go down 20 percent, it seems to me that’s material.”

AHRP has posted two interpretations of the decision’s significance: one by NPR, the other by NATURE.