October 26

Bill would shield some drug firms from punitive damages

Bill would shield some drug firms from punitive damages

Wed, 29 Dec 2004

A proposed bill in Congress would be another disincentive for pharmaceutical companies to disclose drug safety problems.

Those promoting the bill should be asked to disclose their financial ties to drug companies.

In 2000, a mysterious clause giving Eli Lilly immunity from thousands of vaccine lawsuits arising from the harm suffered by children from mercury-laced vaccines had made its way into the Homeland Secruity Act.

This current proposed legislation is being dubbed the "Merck Protection Provision" inasmuch as it would limit punitive damages from Vioxx and other hazardous drugs which the FDA had failed to warn about – even though those hazards were known to the manufacturers.

If enacted this would effectively prevent citizens who suffered preventable injury from being compensated.

Contact: Vera Hassner Sharav

Bill would shield some drug firms from punitive damages
Philadelphia Inquirer
A provision in medical malpractice legislation would protect manufacturers that meet FDA standards.

By Steve Goldstein
Inquirer Washington Bureau
on Sun, Dec. 26, 2004

WASHINGTON – As concern grows over the safety of popular painkillers, a provision in medical malpractice legislation now before Congress apparently would protect drug manufacturers from punitive damage awards as long as federal Food and Drug Administration standards are met.

The provision could dramatically affect lawsuits against Merck & Co. Inc., whose drug, Vioxx, has been tied to increased risk of heart attack and stroke.

Although the proposed legislation does not eliminate liability for harm caused by the drug, analysts are concerned that, if it became law, companies would not be held fully accountable for negligence. Moreover, there would be no threat of large punitive awards to deter a company from ignoring warning signs about a drug.

“This would be an extremely difficult requirement to meet” to sue for punitive damages, said Lucinda Finley of the Law School of the State University of New York at Buffalo, who has been researching medical malpractice and proposed reforms. “You could sort of call this the ‘Merck protection provision.’ ”

“Lawsuits and punitive damage awards have been the catalyst to getting dangerous drugs and medical devices off the market,” said Joanne Doroshow, executive director of the Center for Justice and Democracy, a plaintiffs’ rights advocacy organization. As an example, she cited the 1984 removal from the market of the Dalkon Shield intrauterine device by manufacturer A.H. Robins after 11 punitive damage awards totaling about $25 million.

Those who back the legislation, however, argue that drug companies should not be punished for products that passed muster with the FDA, as long as they followed FDA rules.

Merck spokesman Tony Plohoros said: “We support the bill and have supported medical malpractice reform for a long time.”

The controversial provision is in a medical malpractice bill that will be at the center of debate when the new Senate convenes in January. Republicans, who have increased their majority to 55, generally favor restrictions on medical malpractice lawsuits, while Democrats generally oppose such limits.

In March 2003, the House of Representatives passed the bill, which, in addition to limiting punitive damages, puts a $250,000 cap on jury awards for pain and suffering caused by medical malpractice and restricts the contingency fees plaintiffs’ lawyers could charge.

But Senate Democrats, who effectively filibustered the bill, claim to still have enough votes to keep the legislation bottled up. Senate Majority Leader Bill Frist (R., Tenn.) insists that the strong push for medical malpractice changes by President Bush may alter the arithmetic.

Two other pieces of legislation under the general heading of tort reform have a better chance of being enacted into law, according to Senate staff members.

One is a class-action lawsuit change that would “federalize” most such lawsuits by taking them out of state courts and putting them under federal jurisdiction. Proponents of the change say that some states are too quick to certify class-action lawsuits.

The other would be the culmination of the long-standing negotiation on asbestos litigation, which seeks to create a gigantic trust fund to pay victims.

The odds are longer for medical malpractice change, which has pitted the medical establishment against the Association of Trial Lawyers of America.

The punitive damage awards provision has not attracted as much notice as the capping on jury awards for noneconomic damages, but it has major implications for Merck, as well as for Pfizer Inc., manufacturer of Celebrex.

Merck stopped selling Vioxx on Sept. 30 after the company said the painkiller increased the risk of heart attack and stroke by more than 100 percent. Earlier, Merck continued to sell Vioxx despite knowledge of its potential dangers, critics contend.

Merck, headquartered in Whitehouse Station, N.J., has about 12,000 employees at a huge research center in Montgomery County. Vioxx, Merck’s $2.5 billion-a-year medicine for arthritis and acute pain, is one of the company’s five top-selling drugs, accounting for about 11 percent of sales in 2003.

Pfizer Inc. said earlier this month that a study had found that high doses of Celebrex taken for long periods were associated with a sharply increased risk of heart attacks. But the company has not taken the painkiller off the market, citing other, conflicting research.

Pfizer’s decision not to withdraw Celebrex is a gamble, because plaintiffs’ attorneys could say in lawsuits that the company knew of the drug’s potential dangers and continued to sell it. This could result in a claim for punitive damages – damages intended to punish the wrongdoer – as it could in Merck’s case.

Under this legislation, punitive damages would be barred unless the company failed to comply with FDA regulations; both Merck and Pfizer met FDA standards with Vioxx and Celebrex.

Proponents of the bill and the pharmaceutical industry have contended that manufacturers should not have to pay punitive damages for an FDA-approved product unless it can be shown that they misled the agency or failed to follow FDA strictures.

The intent of those drafting this provision, according to Senate staff, is to protect companies that made good-faith attempts to follow federal guidelines and to guard against lawsuits resulting from misuse of the drug by doctors or patients.

Opponents say the reform is worse than the abuse.

“While this will be devastating to injured people, it won’t do anything to help doctors with their insurance problems, but it would get pharmaceutical companies off the hook for their misconduct,” Doroshow said.

It would also eliminate the deterrent factor, said University of Pennsylvania law professor Catherine T. Struve, who has been researching medical malpractice reform.

Although victims could still be compensated for economic loss and pain and suffering, she said, it “may be the case that in order to deter a company from ignoring warning signs with a blockbuster drug, you need something more – that’s the premise behind punitive damages.”

Contact reporter Steve Goldstein at 202-383-6048

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