Tuesday, January 30, 2007

Do Product Recalls Increase Mass Tort Exposure?

In a news account of yesterday's verdict for a plaintiff in the Prempro litigation, an analyst was quoted as saying that Wyeth's exposure is smaller than it would be if the FDA had recalled the product:

Linda Bannister, an analyst at Edward Jones, said Prempro is a minor cloud hanging over the company, with Wyeth's risk limited by the fact that the drug remained on sale. "It's not a situation like Vioxx or fen-phen," she said, referring to the 2004 withdrawal of Merck's arthritis drug Vioxx, and the 1997 recall of two Wyeth drugs used in the fen-phen diet cocktail. ... "If the U.S. Food and Drug Administration advises that a product be removed from the market, a company's (financial) risk is significant," Bannister said, because the product is deemed very defective or potentially harmful.

This raises the interesting question of the relationship between product recalls and liability.  The comparison of Merck and Wyeth resonates on a day when Merck is reporting 4th quarter profits down 58% due in part to Vioxx litigation while Wyeth reports 4th quarter profits up 17% due in part to Prempro hormone replacement therapy (HRT) sales.  Bannister's point is that if product recalls are triggered by strong scientific evidence of a link between the product and the alleged harm, then they can be expected to correlate with a greater likelihood of liability.  Evidence of general causation, after all, bears on both the causation and liability elements of tort claims.  She could have added (and perhaps she did; we have only the reporter's snippet of the quote) that a product recall itself is a triggering event for mass litigation, as a recall generates publicity that attracts the attention of lawyers and potential plaintiffs.  Thus, it's fair to say that as a general matter, really massive liability tends to accompany products that have been removed from the market.  Think asbestos, Dalkon Shield, and fen-phen.

But there's another side to recalls that cuts the other way.  To whatever extent the product is causing harm or increasing risk, the longer the product stays on the market, the more potential liability it creates.  When the product remains on the market, it's also harder for a defendant to anticipate the future stream of claims and to quantify the remaining risk.  In this sense, Prempro resembles other litigation-generating products such as Zyprexa, Oxycontin and tobacco.

If a manufacturer knows that its product creates an unreasonable risk of harm, then most would agree that regardless of regulatory action, the company itself faces a moral, legal, and business imperative to remove the product from the market.  But sometimes the evidence is debatable and the moral duty unclear, although the risk of litigation remains high.  In those situations, the company faces the difficult decision of how to balance the upsides and downsides -- as to both business and litigation risks -- of keeping a product on the market.


January 30, 2007 in FDA, Fen-Phen, Prempro, Vioxx | Permalink | Comments (0) | TrackBack (1)

Monday, January 29, 2007

Wyeth Loses Prempro Trial

Today, a jury found Wyeth liable to plaintiff Mary Daniel and her husband in a Prempro trial in Pennsylvania state court.  Here's an excerpt from the Reuters report:

A state jury in Philadelphia on Monday found Wyeth's hormone replacement therapy (HRT) Prempro was responsible for an Arkansas woman's breast cancer and ordered the U.S. drugmaker to pay $1.5 million in compensatory damages, a court official said.

The jury found that Wyeth was negligent in failing to provide adequate warnings about the breast cancer risk associated with Prempro.

The jury is expected to return, possibly as soon as Tuesday, to decide punitive damages after also finding that Wyeth's conduct was "malicious, wanton, willful or oppressive or showed reckless indifference to the interest of others" in its failure to provide proper warnings about its HRT drugs, taken by millions of women to treat symptoms of menopause.


January 29, 2007 in Prempro | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 11, 2006

Mistrial in Prempro Case

In Jennie Nelson v. Wyeth Pharmaceuticals, the court today declared a mistrial and ordered a new trial, according to a report from Reuters -- US judge declares mistrial, overturns Wyeth verdict:

Wyeth on Wednesday said a Philadelphia judge granted its motion to declare a mistrial, overturning last week's verdict against the drug maker in a product liability suit involving one of its hormone replacement drugs.


The mistrial motion was unopposed by the plaintiff, Wyeth said, but it gave no details regarding the basis for the motion, or the reasons for the ruling by judge Norman Ackerman, who presided over the trial.

An attorney quoted in the article stated that the mistrial was due to "extraneous circumstances," but gave no details because the judge's order was under seal.

The Nelson trial had been bifurcated, with the first phase addressing causation and compensatory damages and the second phase addressing liability and possibly punitives.  The jury concluded, at the end of phase one, that Prempro was a cause of the plaintiff's breast cancer, and that the amount of damages was $1 million for Nelson and $500,000 for her husband.  The second phase was scheduled to begin tomorrow.


October 11, 2006 in Prempro | Permalink | Comments (0) | TrackBack (0)

Friday, October 6, 2006

Settlement in Nevada Prempro Case

Article on law.com -- Nevada Cancer Patient Reaches Accord With Wyeth in Prempro Case -- by Associated Press:

The same day a Philadelphia jury ruled that a hormone replacement drug at least partially caused a woman's breast cancer, a Reno woman who is dying of the disease reached an out-of-court settlement with the New Jersey-based drug maker.

Just two days before her trial was to begin, Carol McCreary and Wyeth Pharmaceuticals told Washoe District Judge Robert Perry on Wednesday they have resolved the case. Both sides agreed that the terms of the settlement will remain confidential.

If the report is correct that Wyeth settled this Prempro case, it's an interesting contrast to Merck's no-settlement strategy in the early stages of the Vioxx litigation.


October 6, 2006 in Prempro | Permalink | Comments (0) | TrackBack (0)

Wednesday, October 4, 2006

Plaintiff Verdict in First Phase of Prempro Trial

In the first state court Prempro trial, the jury today returned a verdict in favor of the plaintiff in the first phase of the trial.  The Pennsylvania state court jury found that Wyeth's hormone replacement therapy was a cause of the plaintiff's breast cancer, and determined that the amount of compensatory damages would be $1 million for Jennie Nelson and $500,000 for her husband.

It's a "reverse bifurcation" phased trial.  In the first phase, the jury determined causation and compensatory damages.  In the second phase, the jury will determine liability, and depending on the outcome, punitive damages.  In other words, the jury has not yet determined whether Wyeth is liable; there has been no determination of negligent failure to warn.  Thus, although the determination of causation is a setback for Wyeth, the significance of this verdict depends mightily on what happens in the second phase.

The verdict did not come easy.  Last week, the jurors informed the judge that they were deadlocked, but the judge ordered them to continue deliberating.  Yesterday, the foreperson told the judge that they were close to a verdict, but today a juror was removed and replaced with an alternate.  The verdict was announced shortly thereafter.

Last month, a jury found in favor of Wyeth in the first federal court Prempro trial.


October 4, 2006 in Prempro | Permalink | Comments (1) | TrackBack (0)

Tuesday, October 3, 2006

Prempro Jury Near Verdict

In the second trial against Wyeth concerning Prempro, a hormone replacement therapy alleged to cause breast cancer, the jury foreperson informed the judge late Tuesday that the jury is close to reaching a verdict.  After a two-week trial in Pennsylvania state court, the jurors last week had told the judge that they were at an impasse, but the judge ordered them to continue deliberating.  This is the first Prempro trial in state court.  Two weeks ago, a jury in the first federal court Prempro trial rendered a verdict for the defendant.


October 3, 2006 in Prempro | Permalink | Comments (0) | TrackBack (0)

Friday, September 15, 2006

Wyeth not negligent in hormone drug trial

Article on cnnmoney.com -- Wyeth not negligent in hormone drug trial:

     Jurors in the first trial against Wyeth's hormone replacement drug Prempro found
    that the company was not negligent and did adequately warn patients and doctors
    of the risk of cancer.

    The lawsuit, the first of 5,000 filed against the company to go to trial, charged that
    Wyeth had been negligent in testing, manufacturing and marketing the hormone
    replacement therapy.

    Lawyers for plaintiff Linda Reeves, 67, had also argued that the company failed to
    warn users and doctors about the need for regular screening for cancer and heart

September 15, 2006 in Prempro | Permalink | Comments (1) | TrackBack (0)