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Supreme Court’s Wyeth ruling “a major setback” for drug industry.

On Behalf of | Mar 9, 2009 | Firm News

Created: 09 March 2009
In a story that received coverage from many news sources, the New York Times (3/5, A1, Liptak) reports on its front page, “In a major setback for business groups that had hoped to build a barrier against injury lawsuits seeking billions of dollars, the Supreme Court on Wednesday said state juries may award damages for harm from unsafe drugs even though their manufacturers had satisfied federal regulators.” The decision “could have significant implications beyond drug manufacturing” and “many companies have sought tighter federal regulation in recent years in part to shield themselves from litigation.”
The Washington Post (3/5, A2, Barnes) reports, “The 6 to 3 vote in the court’s most anticipated business decision of the term was a rejection of Bush administration policy and a major setback to pharmaceutical companies, which face thousands of lawsuits in state courts from patients who allege that drugs have harmed them.”
The AP (3/5) reports, “The Supreme Court” upheld “a $6.7 million jury award to a musician who lost her arm to gangrene following an injection.” The plaintiff, “Diana Levine of Vermont once played the guitar and piano professionally” and “her right arm was amputated after she was injected with Phenergan, an anti-nausea medicine made by Wyeth Pharmaceuticals, using a method that brings rapid relief, but with grievous risks if improperly administered.” There were many other outlets that covered the Wyeth ruling, including: BusinessWeek (3/5, Johnson), CBS News (3/5, Cohen), the San Francisco Chronicle (3/5, Egelko), the Wall Street Journal (3/5, Bravin), the Legal Times (3/5, Mauro) reports, the AP (3/5, Curran), the Legal Intelligencer (3/4, Passarella), the Los Angeles Times (3/5, Savage), Dow Jones Newswires (3/5, Anderson), USA Today (3/5, Biskupic, Appleby), UPI (3/4) ABC World News (3/4, story 9, 0:30, Gibson), CBS Evening News (3/4, story 4, 2:00, Couric) and NBC Nightly News (3/4, story 5, 2:05, Williams).
Drug industry may face more litigation after ruling. The Financial Times (3/5, Jack) reports, “Pharmaceutical companies face substantial extra litigation after the US Supreme Court ruled yesterday that safety warnings on their drugs approved by federal regulators did not protect them from lawsuits in individual states.” The ruling “marks the failure of efforts by the industry to fight legal settlements by imposing federal pre-emption, an argument that had been supported by George W. Bush’s administration.”
Bloomberg News (3/4, Stohr) reported that now drugmakers can be sued “for failing to provide adequate safety warnings.” Justice John Paul Stevens wrote in the opinion, “Congress did not intend FDA oversight to be the exclusive means of ensuring drug safety and effectiveness.” The ruling “might help former users of Wyeth’s Prempro and Premarin menopause drugs and consumers of AstraZeneca Plc’s antipsychotic drug Seroquel.” However, “the impact isn’t clear for allegations that Pfizer Inc. and GlaxoSmithKline Plc should have done more to warn that their anti-depressants might cause suicidal tendencies.”
The Philadelphia Inquirer (3/5, Hill) reports that Sol Weiss, a Philadelphia plaintiffs’ lawyer, said, “This doesn’t mean you’re going to win, but you get your day in court.” He is “not involved in this case” but “he is hoping that the decision will revive his cases involving Pfizer Inc.’s antidepressant Zoloft and GlaxoSmithKline P.L.C.’s antianxiety agent Paxil.” The Wall Street Journal (3/5, Johnson, Mundy, Bravin) also covers the story.
Ruling may make drugmakers more cautious, halt development. The AP (3/5) reports that the ruling “could make drugmakers more cautious about safety issues and may lead them to halt development of some medicines and even pull others off the market.” Erik Gordon, an analyst and professor at University of Michigan’s Ross School of Business, said, “‘They will weigh how prevalent the side effect is, how serious the side effect is, versus the number of people benefiting from the drug and the amount of money being made by the drug.”
Ruling seen as contradictory to medical device case. The New York Times (3/5, B1, Meier, Singer) reports on the front page of its Business Day section that the “result of a decision Wednesday by the Supreme Court” was that “federal law does not protect drug companies from product liability suits in state courts.” However, “in contrast, the Supreme Court ruled last year that federal law does bar such lawsuits against the makers of heart stents, artificial joints and other critical medical devices.” David C. Vladeck, a professor at Georgetown University Law Center, said, “I think this is going to force Congress to revisit the issue of why medical devices should be insulated from lawsuits.”
Wyeth loss seen as possible victory in disguise. Forbes (3/5, Fisher) reports, “Wyeth’s loss dashes the hopes of those who support pre-emption as a tactic for cutting back on excessive jury awards in product-liability cases, which the court affirmed last year in Riegel v. Medtronic.” However, “Wyeth v. Levine may be a victory in disguise. By stepping back from the brink and refusing to give drug companies federal immunity from suits under state laws, the court has likely prevented an even more toxic response from the Democrat-controlled Congress.”
Papers weigh in on Wyeth ruling. The Wall Street Journal (3/5) editorializes, “The decision is a huge victory for plaintiffs lawyers, but it’s a much bigger defeat for drug innovation and public health.” The Journal adds, “Yesterday’s ruling will expose drug companies to a kind of double innovation jeopardy.” Concluding, the Journal argues that now drug companies “will have to contemplate paying up front — and paying later, even if the tragic mistake in applying the drug is someone else’s. Wyeth is a dream come true for the plaintiffs bar.”
In stark contrast, the New York Times (3/5) editorializes, “The Supreme Court made a wise and surprising decision on Wednesday when it rejected a drug company’s claim that it cannot be sued for damages in state courts if a product and its label have been approved by the Food and Drug Administration.” The ruling “demolished the notion that federal regulatory rulings automatically pre-empt the states from enforcing even tougher standards on drugs” and “also exposed as a sham the Bush administration’s strenuous efforts to protect its allies in industry with phony pre-emption claims.” The Times concludes, “We hope this decision will put the brakes on efforts to stifle damage suits in other areas as well.”
Wyeth decision seen as not enough to end Michigan’s drug law. In an op-ed in the Detroit Free Press (3/5) Henry Greenspan, who teaches about the FDA, ethics and policy at the University of Michigan, writes, “Today was a good one for justice in America – but we in Michigan remain saddled with a law that is based on precisely the argument the high court rejected.” He adds that the court’s decision in Wyeth “is not enough to end Michigan’s statute.” Greenspan concludes, “The state senators who have blocked repeal will now have to argue that they know better than two-thirds of the Supreme Court” and “they will have to explain why they maintain a view of the FDA that the court called ‘meritless’ and ‘untenable.'”