Walgreens (WBA) Becomes Latest Retailer To Suspend Zantac Sales

Walgreens (NASDAQ:WBA) announced today that they would be suspending the sales of Sanofi’s (NASDAQ:SNY) heartburn medication Zantac. Zantac, which is sold generically under the name ranitidine, is currently under investigation by the US Food and Drug Administration after they found that it contained a carcinogen known as NDMA which can lead to cancer. The FDA started an investigation after Valisure, an online pharmacy company, alerted the FDA earlier this month that Zantac includes an impurity that could cause cancer. Walgreens’ decision to suspend the drug while the FDA continues its investigation comes after CVS (NYSE:CVS) announced on Saturday that they were discontinuing their sales of Zantac.

CVS stated that they were taking action out of an “abundance of caution” and that there is no current recall of the product, but customers who purchased these products can bring them into their stores for a refund. Ranitidine, which was originally thought of as an ulcer drug, is approved for treatment and prevention of stomach and intestine ulcers and heartburn. Ranitidine is considered an H2 blocker, which reduces stomach acid by blocking acids that produce it. CVS announced that it would continue to sell its other over the counter H2 blocker products such as Pepcid and Tagamet.

Sanofi (PA:SASY) has said that Zantac has been around for over a decade and meets all the specified safety requirements for use. The large cap pharmaceutical company also went on to comment that they “are working closely with the FDA and are conducting their own robust investigations to ensure they continue to meet the highest quality standards.”

The FDA has said that NDMA can cause harm in large doses, but their preliminary tests have found that NDMA levels in Zantac barely exceed what might be found in common foods. NDMA is part of a class of compounds called nitrosamines that are found in water and foods like dairy, meats, and vegetables. The federal administration is investigating whether exposure to small amounts of the carcinogen can potentially pose serious health risks to patients and that it would reveal their conclusions publicly as soon as possible.

Moving Forward

Many generic drugs for high blood pressure have already been found to contain low levels of NDMA and other related carcinogenic chemicals. The FDA has grappled with the NDMA issue for more than a year, and Zantac is the latest drug that they have brought into question.

The administration acknowledged that more than 2 million people have been exposed to the carcinogen through high blood pressure drugs. Generic drugs have been in the hot seat over the past year as a series of recalls have been issued for hypertension drugs, which has raised questions about the safety of generic drugs.

On Monday, Sanofi shares closed up 0.15%, Walgreens shares ended the day in the green by 1.65%, and CVS closed up 1.59%. The FDA’s probe into Sanofi’s heartburn relief drug spells potential bad news for the pharmaceutical company if they find evidence that small doses of NDMA can cause harm to consumers. Sanofi shareholders should monitor the progression of the probe and if other drug retailers choose to follow in CVS and Walgreens’ footsteps.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>