A class action has been filed claiming a pharmaceutical giant sold and marketed in New Zealand cold medicines that did not work. 

Australia-based JGA Saddler this morning filed a class action against Johnson & Johnson NZ over its phenylephrine-based cold medicines tablets and syrups, claiming they have long been shown to be ineffective. 

Johnson & Johnson is a United States-based pharmaceutical multinational and is among the 50 largest companies in the world. Its New Zealand subsidiary last year reported $142 million in local sales. 

Comment is being sought from Johnson & Johnson’s US headquarters, and its local subsidiary’s offices in Auckland. 

JGA Saddler director Rebecca Jancauskas said in a statement: “People should be able to confidently buy medicines that work as advertised and when they don’t, the company involved should be held accountable.” 

Jancauskas said she was hoping to recruit New Zealand claimants, on a “no win no fee” basis, who had taken the medicines in question over the past 20 years. 

“We expect this will be the largest class action in New Zealand history in terms of the number of affected individuals,” Jancauskas said. 

The action covers 17 Johnson & Johnson cold and flu products, mostly branded as Codral or Sudafed PE, which JGA Saddler claimed were sold over the past two decades despite a growing body of evidence that showed its key active ingredient phenylephrine was ineffective. 

JDA director Rebecca Jancauskas has filed a class action claiming drug-makers in New Zealand sold cold medicines they knew were ineffective. 

The action is being bankrolled by Omni Bridgeway, a litigation funder who seeks to profit from their funding by claiming a share of any potential award or settlement. 

JGA Saddler specialises in class actions and claims to have secured $1.5 billion in settlements and judgments over the past 60 years. 

Omni Bridgeway New Zealand investment manager Jacob Kerkin said: “For around 20 years, New Zealanders have been sold cold and flu products to relieve their symptoms, despite studies and scientific evidence showing their key ingredient phenylephrine is ineffective when taken orally. Kiwis deserve better.” 

Jon Duffy, Consumer NZ chief executive, encouraged users of the medicines to join the class action and called for a halt to their sale until efficacy could be proven. 

“Large multinational companies with ample resources have no excuse for misleading consumers about the efficacy of their products … Companies must be held to account if they are found to breach the Consumer Guarantees and Fair Trading Acts.” 

Phenylephrine became a widely-used substitute for pseudoephedrine when the latter, which studies found was effective relieving congestion, was made prescription-only in 2011 over concerns it could be used as a methamphetamine precursor. 

The effective ban on pseudoephedrine was lifted last year, fulfilling a campaign pledge by coalition party Act, but it is sold only in pharmacies. Phenylephrine-based products remain on supermarket shelves. 

The effectiveness of phenylephrine for treating congestion has long been in question with many studies finding no effect when taken orally. 

But there is some evidence supporting its effectiveness when delivered via nasal spray. 

In November the US Food and Drug Administration proposed removing orally-taken phenylephrine from ingredients that can be used to make products marketed as effective in relieving nasal congestion. 

In December, JGA Saddler filed similar action in Australia against Johnson & Johnson, also funded by Omni Bridgeway. 

Pharmaceutical companies in Canada and the United States have also faced a flurry of similar lawsuits over phenylephrine. 

Matt Nippert is an Auckland-based investigations reporter covering white-collar and transnational crimes and the intersection of politics and business. He has won more than a dozen awards for his journalism – including twice being named Reporter of the Year – and joined the Herald in 2014 after having spent the decade prior reporting from business newspapers and national magazines.