Wyeth v. Levine
After the Wyeth v. Levine argument, I worried that the Supreme Court might decide the case on such narrow grounds that it would do little good to confront the problem of trial-lawyer abuse. I now see I wasn’t nearly pessimistic enough.
We can put the nail in the coffin in the idea that this is a pro-business Supreme Court: the 6-3 Wyeth v. Levine decision is the worst anti-business decision since United States v. Von’s Grocery, 384 U.S. 270 (1966). Justice Thomas’s confused concurring opinion is especially disappointing, as it declares an abdication of the Supreme Court’s appropriate structural role to prevent individual states from expropriating the gains from interstate commerce.
Sell your pharmaceutical stocks now, because the Supreme Court just declared it open season on productive business. One should now fear the coming decision in the as-yet-to-be-briefed Clearinghouse v. Cuomo, and the effect that is going to have on an already battered banking economy, as well.
Beck and Herrmann have first thoughts, but are likely to be relatively quiet thereafter.
http://overlawyered.com/2009/03/wyeth-v-levine/
The majority wrote that:
"State tort suits uncover unknown drug hazards and provide incentives for drug manufacturers to disclose safety risks promptly. They also serve a distinct compensatory function that may motivate injured persons to come forward with information. Failure-to-warn actions, in particular, lend force to the FDCA’s premise that manufacturers, not the FDA, bear primary responsibility for their drug labeling at all times. Thus, the FDA long maintained that state law offers an additional, and important, layer of consumer protection that complements FDA regulation.12 The agency’s 2006 preamble represents a dramatic change in position. "
The court fails to provide any evidence of unknown drug hazards, but that's nitpicking. But if the court does find one I guess that includes information that was already on the label? Or how about "information" based on a meta-analyses or conjecture that a plaintiff brings forward that was perhaps discussed and dismissed by the FDA and companies? If a jury decides that such "information" reveals a safety risk should that be considered a "failure to warn"?
The impact of this decision will be threefold:
1. Like the Cutter polio decison, Wyeth v. Levine breaks new legal ground. In Cutter a jury found that "pharmaceutical companies are liable for damage without negligence, even if they make a product according to industry standards using the best science available." Here the court finds that companies are liable for damage even when the risks are clearly stated and for risks that may not be obvious or proving using the best science available.
2. The decision will raise the cost of making new drugs and vaccines.
3. The decision should dash the hopes of the HMOs who thought that a comparative effectiveness commission would shield them from denying access based on a quasi-government study. If anything, comparative effectiveness, since it is more of squishy methodology than measuring biological response to medicines, will be easier to attack from a legal or class action standpoint. Want to deny using genetic tests on grounds of cost-effectiveness? Just wait till the first lawsuit comes along claiming damages because of a refusal to test for adverse events or response.
Ironically, pharma and biotech firms could be in a better position to adapt to the new ruling with biomarker based development and post market technologies. Meanwhile, health plans that seek to rely on the FDA label as a basis for denying coverage should think very hard about the implications of this decision.
