Opinion: Will Whopper Actos Award Convince Big Business to Stop Treating Consumers as Statistics? Probably Not.
Will a multibillion dollar jury award convince “big pharma” and other big businesses to be more honest about the risks associated with their products?
Will the recent $10.5 billion Actos jury award, the seventh largest in U.S. history, convince companies that consumers are more than statistics to be factored into their profit calculations?
Probably not. Sure, a $10 billion award will get a company’s attention. But companies have good reason to believe they will never actually be forced to pay. Motions and appeals will keep the case tied up in court for years. The defending companies almost invariably convince some judge to overturn or reduce such gargantuan awards.
Allen v. Takeda
Terrence Allen, a former hardware store manager in New York, is the plaintiff in the recent Actos lawsuit that resulted in the giant-sized jury award. Allen contends that the prescription drug Actos, which he took for diabetes from 2006 to 2011, caused his bladder cancer.
Allen sued the drug’s maker, Takeda Pharmaceutical, the largest pharma on the Asian continent. Takeda had more than $250 billion in revenue in 2012. Allen also sued Eli Lilly, Takeda’s U.S. marketing partner.
More than 3,700 federal lawsuits, including Allen’s, have been consolidated into a massive multidistrict litigation in the Western District of Louisiana before Judge Rebecca Doherty. Allen’s case became the first federal suit to go to trial. It was a bellwether trial, meaning its outcome sets the stage for how the thousands of other cases will be valued.
In April, the Louisiana jury awarded $9 billion in punitive damages and $1.5 billion in compensatory damages against Takeda and Lilly. Did the jury lose its senses? It would probably be more accurate to say the jury lost its temper over the outrageous way Takeda concealed the truth about Actos. Takeda internal memos and other evidence show that the company knew about the drug’s increased risk of bladder cancer before it ever placed Actos on the market.
One of Takeda’s own former employees, Dr. Helen Ge, revealed that the company knew about Actos’s association with bladder cancer before the first Actos prescription was filled, but that what Ge called a “culture of fraud” at Takeda led to concealing that risk from the public.
Only after Ge filed her own whistleblower lawsuit in 2010 did regulators and the public become aware of Actos’s cancer risk, leading the FDA to declare in 2011 that prolonged use of Actos makes a patient 40% more likely to be diagnosed with bladder cancer.
Sure, prescription drugs can have serious side effects. Every patient must weigh the pros and cons. However, it is a crime for a manufacturer to conceal crucial information, thus making it impossible for patients to evaluate the risk accurately. During the Allen trial, evidence was presented that Takeda concealed clinical trial data and cherry-picked the data it submitted to the FDA.
What infuriated Judge Doherty the most was Takeda’s admission that it had “purged” the documents of several dozen employees, documents which might have shed light on what Takeda knew and didn’t know. Takeda claimed the document purge was routine, but the judge ruled that it was an intentional — and successful — effort to conceal damning evidence. She instructed the jury to take Takeda’s subterfuge into consideration. The $10 billion award was the result.
A Familiar Pattern
In products liability cases involving prescription drugs or medical devices, a familiar pattern often emerges.
• A company develops a new drug which has the potential to rake in billions in sales. Actos had $3.6 billion in sales in 2010 alone, a year before its patent ran out and its link to bladder cancer became public. Takeda has taken in more than $16 billion in Actos sales revenue since 1999.
• Before releasing its product to the public, the company does years of testing. That’s not just to satisfy regulators, but to identify the liabilities a company may be exposing itself to by offering the new drug or device.
• Sometimes the data from those tests indicate that a percentage of users will experience serious adverse effects. Then the number crunching begins. How big is the percentage? Will the public be able to connect the adverse effects to the product? If lawsuits are filed, will plaintiffs be able to prove the connection? How strong will the company’s defense be? If jury awards result, how much are they likely to be? Does the company stand to make a nice profit, even if some people experience harms, lawsuits are filed and jury awards are rendered?
In that kind of system, lawsuits and jury awards are just a part of doing business, and consumers who experience cancer or untimely deaths are statistics in the company’s profit calculations.
It is unlikely that anyone at Takeda or Lilly expected a $10.5 billion jury award. However, the companies have filed motions to overturn the award and motions for a new trial. Even Allen’s attorney, Mark Lanier, acknowledged that the $9 billion award is not likely to stand.
It would be a new day for health consumer rights if companies believed they would actually be held responsible for their actions.
Nobody wants the big pharmas to stop developing miracle drugs. Nobody expects each drug and device to be free of possible side effects. But we do have a right to expect pharmaceutical companies and medical device manufacturers to be honest about the risks associated with their products and make their information available to the public, so patients can decide for themselves how much risk they are willing to take.
On paper, a $10 billion jury award looks impressive enough to lead a company to repentance. Unfortunately, we have a system in which the bigger the award, the less likely it is that it will amount to much more than the paper it is written on.