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In the Money, and in Court 2006-04-22
By Alex Berenson

In the Money, and in Court

The next wave of drug lawsuits is coming.

As Merck reels from 11,500 suits over Vioxx, its arthritis drug, the rest of the industry is girding for challenges over another half a dozen widely used medications that plaintiffs' lawyers say have hidden and severe side effects or were improperly marketed.

Unlike Vioxx, which Merck stopped selling in 2004, the other drugs remain on the market.

The drugs now under attack include Seroquel, an antipsychotic medicine from AstraZeneca; Ortho-Evra, a birth-control patch from Johnson & Johnson; Prempro, a hormone therapy for women from Wyeth; and Fosamax, an osteoporosis medicine made by Merck. The drugs have combined annual sales of almost $7 billion and are used by millions of patients.

The first Prempro case is expected to reach trial this summer, and Johnson & Johnson has already begun to settle some Ortho-Evra cases, according to lawyers involved in the lawsuits.

In each case, plaintiffs' lawyers are trying, at least rhetorically, to link their suits to the Vioxx litigation, asserting that the drugs have serious side effects that their makers did not disclose. In two of the four Vioxx suits to reach trial, plaintiffs have won large verdicts.

The companies say they have done nothing wrong, and lawyers who defend drug companies say that the rise in pharmaceutical suits is a reflection of changes in the plaintiffs' bar, not a reflection of the dangers of the drugs.

"This is really like cattle moving around a pasture, grazing on the greenest part of the grass," said Peter Bicks, a defense lawyer at Orrick, Herrington & Sutcliffe. "The greenest part of the pasture now appears to be, in the post-Vioxx era, drugs."

The suits are keeping the pharmaceutical industry on the defensive at a time when drug makers are trying to rebuild their image amid public anger over prescription drug prices and the fact that some companies did not disclose negative information from clinical trials during the 1990's.

Lawsuits over prescription drugs carry perhaps the highest stakes of all product liability litigation, lawyers on each side say. Plaintiffs' lawyers may spend years and millions of dollars to prepare for a single trial, but a victory can come with a verdict of $10 million or more.

To gain leverage against the companies, trial lawyers aim to build "inventories" of hundreds or thousands of plaintiffs that they can settle simultaneously for hundreds of millions of dollars.

Last year, Eli Lilly agreed to spend $700 million to settle 8,000 lawsuits over Zyprexa, a drug for schizophrenia that causes severe weight gain in many patients. Wyeth has spent $15 billion since 1998 to resolve lawsuits over its fen-phen diet-drug combination, which can cause severe heart problems and is no longer sold. And Wall Street analysts estimate that Merck may eventually have to pay $10 billion to $50 billion to end the litigation over Vioxx, which has been linked to heart attacks and strokes.

While Fosamax, Seroquel, Ortho-Evra and Prempro are still being sold, clinical trials or reports to the Food and Drug Administration have linked them to serious side effects. Fosamax has been associated with severe jaw decay; Seroquel with weight gain, which raises the risk of diabetes; Ortho-Evra with blood clots, which can cause strokes; and Prempro with an increased risk of breast cancer.

In each case, plaintiffs' lawyers say, drug makers hid early indications of the side effects and improperly marketed their medicines.

"These companies just do it again and again and again," said Paul J. Pennock, a partner who leads litigation against drug makers for Weitz & Luxenberg, one of the largest plaintiffs' law firms. "They try to create much larger markets for these drugs than is warranted, particularly given what they know about the risks."

But lawyers for drug makers say that prescription medicines are as safe now as they have ever been and that the rash of suits reflects an emboldened and enriched plaintiffs' bar.

For a decade, large plaintiffs' law firms have profited from suing corporate America over asbestos-related diseases, but asbestos suits are slowly drying up, leaving plaintiffs' lawyers searching for new targets, defense lawyers say. In addition, plaintiffs' firms have grown flush with cash from settlements of asbestos and tobacco lawsuits and now have the resources to finance cases that can take years and millions of dollars of upfront investment.

To build caseloads, plaintiffs' firms aggressively advertise for clients. Smaller firms then refer potential plaintiffs to a handful of large firms like Weitz & Luxenberg that can afford to invest in complex cases. In return, the smaller firms receive a share of the proceeds from any settlements or verdicts.

"It's an industry, an amazing industry," said Barbara R. Binis, a lawyer at Reed Smith who has successfully defended Wyeth in several diet-drug lawsuits. "They all talk to each other, and they all play off what each other is doing."


 
 
 
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