SAYING NO TO DRUGS
Breakthrough pharmaceuticals have
driven medical progress for decades.
Litigation may grind it to a halt.
Bolstered by war chests amassed in tobacco and asbestos suits
and by an increased spirit of cooperation among law firms, Trial Lawyers, Inc.
is going after drug companies and medical-device makers with new intensity.
And it is busily trolling for customers: "You may be entitled to money," blares
the website ClassActionConnect.com, targeting Merck & Co.'s popular painkiller
Vioxx. A similar site claims to "give you all the facts
you need to stake your claim to the billions of dollars sitting in financial
accounts right now."
Vioxx, the first of a class of COX-2 inhibitor drugs, was created as a useful
treatment for the many older individuals who suffer from debilitating rheumatoid
arthritis and other painful chronic conditions but who are at risk for life-threatening
reactions to medicine-chest standbys aspirin and ibuprofen, which themselves
take thousands of lives a year. Last year, Merck voluntarily
withdrew Vioxx from the market after a study showed an increased risk of heart
attack and stroke after using the drug in heavy doses for 18 months.
What has followed has been the biggest bonanza for the trial bar since 2001
(when Wyeth put aside $13 billion to settle lawsuits over the diet drug Fen-Phen—a
number that subsequently climbed to $21 billion). More
than 20 million Americans have taken Vioxx since it was introduced in 1999.
By this fall, Merck was facing almost 5,000 federal and state lawsuits stemming
from the drug's use, not to mention a slew of shareholder suits.
While financial estimates last year suggested that the Vioxx litigation could
wind up costing Merck $18 billion, the overall take
for the litigation industry could be much higher if the first Vioxx jury verdict
(see box, p. 7) is any indication, and some analysts are now projecting that
Merck could lose up to $50 billion.
Junk Science in the Courts
While at least some Vioxx suits seek compensation for actual injury—Merck's
scientific tests did show an increased incidence of heart attack for some individuals
who took a certain dosage over time—medical-products liability cases often seek
compensation for "phantom risks" that are nonexistent, or at least unproven.
Trial Lawyers, Inc. has cashed in for billions of dollars with such claims of
injury, lacking any real scientific evidence, by relying on what Manhattan Institute
legal scholar Peter Huber calls "junk science"—assertions presented as scientific
fact but in reality more like astrology than astronomy, more like alchemy than
chemistry, and more like numerology than mathematics.
By exploiting loose evidentiary requirements, clever lawyers have been able
to use junk-science testimony to dupe unsophisticated juries into believing
their far-fetched claims.
For example, in 1995, 400,000 women registered for a $4.25 billion fund established
to compensate them for injuries allegedly caused by silicone breast implants—notably,
an increased risk of breast cancer and connective tissue diseases—despite any
scientific evidence that such implants were harmful.
The settlement followed two 1992 studies "showing that breast implants were
associated with a reduced rate of breast cancer" and
just preceded a major 1994 epidemiological study published in the New England
Journal of Medicine that found "no association between implants and the connective
tissue diseases and other disorders that were studied."
Why would Dow Corning enter into bankruptcy and a multibillion-dollar settlement,
given such evidence and the total absence of studies establishing the litigation
industry's allegations? After losing a $7.5 million lawsuit to a woman claiming
illness caused by breast implants, Dow was flooded
with suits—from some 20,000 women from 1992 to 1994—and lost, in trial and on
appeal, tens of millions of dollars in jury verdicts to Trial Lawyers, Inc.
By exploiting loose evidentiary
requirements, clever lawyers
use "junk science" to dupe juries
into believing far-fetched claims.
Though breast-implant litigation may strike some as trivial, since the device's
typical purpose is cosmetic, drugs and devices with genuine lifesaving and life-enhancing
effects have also been driven off the market by the litigation industry's junk-science
lawsuits. Take, for instance, the morning-sickness drug Bendectin, which greatly
improved the daily lives of pregnant women and by 1980 was used by as many as
25 percent of all expectant mothers. Trial lawyers
generated such a national panic over the claim that the drug was associated
with birth defects—despite any evidence—that many women who had been taking
the drug aborted their unborn fetuses. By 1983, the
manufacturer of Bendectin pulled the drug in the face of $18 million in annual
legal bills—against only $20 million in total sales.
Though Bendectin is on the market elsewhere around the world, it remains unavailable
to pregnant American women, despite more than 30 published
studies—examining more than 130,000 patients—that have failed to find a link
between the drug and birth defects. Since Bendectin
was pulled from the market, the percentage of pregnant women hospitalized each
year for morning sickness has doubled; the incidence of birth defects has not
Compensating the Unsick
Even when there is scientific evidence that a
drug can cause injury, our courts do a very poor
job of distinguishing between creditable and meritless
cases, as demonstrated most recently in Ernst v.
Merck (see box). So unscrupulous operators within
the litigation industry can (and do) flood courts
with mass tort claims that group together many
claimants—most of whom have no recognizable
medical injury—and settle claims that compensate
the unsick, undercompensate the sick, and produce
astronomical fees for themselves.
THE IMPORTANCE OF BEING ERNST
Carol Ernst, the widow of a 59-year-old who had taken the pain-relieving
drug Vioxx and died shortly after, was handed a $253 million verdict from
a Texas jury this August. Texas attorney Mark
Lanier, who moonlights as an evangelical minister when he's not leading
Trial Lawyers, Inc.'s pharmaceuticals division, scored the big win.
Although the verdict will likely be reduced under Texas's punitive-damages
cap, the cap will not affect the jury's award
of damages for the mental anguish suffered by the deceased's wife (of
one year), which the jury determined to be $24 million.
Ernst had taken Vioxx for only eight months, less than the 18 indicated
as potentially unsafe in Merck's study; he had 70 percent blockage in
his arteries; and the original diagnosis for his cause of death was heart
arrhythmia, which has not been linked to Vioxx.
The Texas jury was apparently not persuaded by these facts.
The verdict in the Ernst case highlights the significant problems that
American lay juries have in assessing complex medical claims of causation.
One juror in the case told the Wall Street Journal, "Whenever Merck was
up there, it was like wah, wah, wah. . . . We didn't know what the heck
they were talking about." Without the ability
to assess competing scientific claims with any precision, jurors can be
persuaded by charismatic plaintiffs' attorneys like Mark Lanier to accept
legal claims that a more sensible legal system would deny.
This tactic was pioneered by Trial Lawyers, Inc. in its long-established product
line of asbestos litigation,  and today it drives product-liability
claims over drugs and medical devices. A case in point is the litigation industry's
attack on Fen-Phen, the diet drug that has already cost Wyeth $14 billion in
litigation expenses and damages (and is expected to cost $7 billion more).
Doctors at the Mayo Clinic discovered a link between Fen-Phen and a heartvalve
disorder. According to Wyeth's initial models, the
association was strongest for aortic valve damage, a rare condition.
Most of the plaintiffs, however, claimed that Fen-Phen had caused mitral valve
damage, "a much more common condition among overweight people generally."
You might ask how this could happen. So did Judge Harvey Bartle III, of the
Eastern District of Pennsylvania. In one case, he held
a six-day inquiry focusing on 78 claimants who had been screened by one of only
two doctors. The first of these doctors "was working
on contingency for the Hariton firm; he received an extra $1,500 whenever a
claimant he’d evaluated submitted a green form to the trust."
As for the second doctor, the judge stated that her "mass production operation
would have been the envy of Henry Ford" and that her lead sonographer had been
trained by an employee of the plaintiffs' firm.
Drug Lawsuits Cost More than Money
By exploiting the legal system to sue manufacturers of drugs and medical devices
that do not actually cause plaintiffs' injuries, Trial Lawyers, Inc. deters
companies from researching and manufacturing legitimate lifesaving and life-improving
products. Manufacturers try to maximize profit—they're
not charities—so they will only research and produce goods whose expected sales
exceed expected costs.
THE NEW DRUG LORD
The new CEO of the drug division of Trial Lawyers, Inc.'s health-care
practice might well be Christopher A. Seeger. Seeger recently wrung
a $700 million settlement out of Eli Lilly in a national suit over its
antipsychotic drug Zyprexa, which his suit alleged caused diabetes—a
side effect deemed worth the risk by the Food and Drug Administration
for a medication that effectively treats schizophrenia and manic depression:
when untreated, sufferers from these conditions face far more serious
threats to their quality of life than regular insulin injections. Seeger
now serves as a lead counsel or member of the plaintiffs' steering committee
in many of the most prominent drug mass torts in the country—including
suits against anti-diabetes drug Rezulin, anti-heartburn drug Propulsid,
and weight-loss drug Dexatrim — and in April, plaintiffs' lawyers unanimously
elected him to serve as co-lead counsel for the multidistrict litigation
over Vioxx. Shortly after the decision in Ernst
v. Merck, Seeger began his opening arguments in the second Vioxx case
alleging that the drug caused a heart attack, a New Jersey lawsuit still
pending as this publication went to press.
Of course, were our legal system functioning efficiently, lawsuits would force
pharmaceutical companies to internalize the costs of side effects caused by
the drugs that they produce—which would encourage the manufacturers to withhold
more dangerous products and which in turn would lower the net social cost of
accidents. But the legal system doesn't function efficiently,
and the evidence strongly suggests that tort lawsuits have done little to lower
accident rates. Rather, seminal research from Yale's George Priest showed two
decades ago that accident rates fell significantly throughout the twentieth
century—and indeed, fell even faster before tort law was expanded in the 1960s
and 1970s than they did thereafter. A more recent study,
forthcoming from the Manhattan Institute, examines accident rates and tort reforms
from 1980 through 2000 and shows that reforms designed to limit the scope of
tort law—including noneconomic- and punitive-damage caps, higher evidentiary
standards, and product-liability reform—are actually associated with lower accident
In the drug context, these results should hardly be surprising, given that
the system as we know it has punished safe products from breast implants to
Bendectin and overpunished other drugs such as Fen-Phen and Vioxx. Pharmaceuticals
and other products that improve health and save lives have been indiscriminately
driven from the marketplace. As Peter Huber has explained, "When all is said
and done, the modern [tort] rules do not deter risk: they deter behavior that
gets people sued, which is not at all the same thing."
The harmful side effects of overactive litigation go far beyond the
actual products that are taken off the market. Countless other potentially
useful drugs sit in petri dishes because companies hesitate to
spend hundreds of millions of dollars on products that could land
them in court, costing hundreds of millions more.
For example, lawsuits have prompted a virtual cessation in contraceptive research.
Following on the heels of successful lawsuits against the manufacturers of IUDs,
Trial Lawyers, Inc. managed to kill off other contraceptives such as Norplant,
a long-term reversible contraceptive that was used by a million women in the
United States and that is still used by millions more in other countries.
Sued for alleged complications caused by Norplant's silicone applicator, its
maker, Wyeth, withdrew the product from the U.S. market in 2002 after five years
of litigation and over $50 million in legal costs—despite the fact that plaintiffs
produced no evidence of harm. Indeed, when lawyers
couldn't prove Norplant a health threat, they took to attacking Wyeth for failing
to warn patients of its side effects. The upshot: U.S.
companies have made no new contraceptive drugs since, and spend 20 times more
money on cosmetics research than on developing new contraceptives.
The Vioxx case itself is a good example of how litigation exposure can stifle
potentially lifesaving research, since Vioxx had been shown experimentally to
prevent the growth of precancerous lesions in people at risk of developing colon
cancer. Given the threat posed by such cancers, many
patients would accept a moderately increased risk of heart attack to have an
effective cancer treatment. But if trial lawyers have their way, people with
real health needs won’t have such choices, and Vioxx's potential efficacy as
a cancer preventative may die along with its use as a painkiller.
Do we really want schizophrenics to
stop taking Zyprexa because they
saw the trial bar's TV ads recruiting
plaintiffs who had taken the drug?
In addition to removing lifesaving drugs from the market and sti- fling research,
the specter of drug litigation can adversely affect health by changing patient
and doctor behavior. More than 40 percent of doctors say they don't prescribe
drugs that are under threat of litigation for fear that they will be drawn into
the suit (see graph, above left). Even more frightening,
40 percent of pharmacists report that patients have refused to take prescribed
medications that they knew were the subject of litigation (see graph, below
left). Given the millions of dollars spent on drug-lawsuit
advertising across the country (see graph, p. 5), such risks are very real,
and when patients stop taking medications without legitimate medical reasons,
they endanger their own health and, in some cases, the public at large: do we
really want individuals with schizophrenia and bipolar disorder to stop taking
their Zyprexa because they saw one of Trial Lawyers, Inc.'s thousands of television
advertisements recruiting plaintiffs who had taken the drug?
An Attack on Democracy
Finally, Trial Lawyers, Inc.'s assault on the drug industry has undermined
the democratic authority of Congress itself, which vests the Food and Drug Administration
with responsibility for pharmaceutical regulation. 
The FDA has been scrambling to reassert itself as the arbiter of drug safety
as lawyers and juries usurp its role and increasingly make cost/benefit decisions
that are rightly left to patients and their doctors. Necessarily, lawsuits such
as those against Fen-Phen and Vioxx undermine the FDA's regulatory mandate from
Congress to oversee drugs and patient health, as the agency itself has recently
argued. Though the FDA is far from perfect and needs
reform, its onerous approval processes are specifically designed to test drugs'
safety and efficacy with an eye toward the big picture: they determine whether
the costs of allowing a drug into the marketplace are higher or lower than the
benefits that the drug is expected to bring.
In contrast, juries that decide lawsuits over drug side effects can consider
only the case at hand, not the broader cost/benefit analysis. Such juries can
impose punitive damage awards to "send a message" to drug companies, notwithstanding
other juries' decisions to send the same message—or indeed, other juries' decisions
that the message need not be sent. And Trial Lawyers, Inc. can exploit lax venue
and jurisdiction rules to shop cases to the most lenient state courts, which
not only have much looser evidentiary rules but also see lawsuits against out-of-state
manufacturers as a cottage industry. These venues are
what plaintiffs’ attorney Dickie Scruggs, a longtime Trial Lawyers, Inc. executive,
calls "magic jurisdictions"—where "judges are elected with verdict money" and
"it’s almost impossible to get a fair trial if you’re a defendant."
Effectively, the litigation industry is imposing its own national health-care policy, case by case—a policy not primarily concerned with the
public's health but with the trial bar's power and wealth. The legal assault on the makers of our medicines and medical devices threatens our
health and that of our children and grandchildren. We all need to just say no to Trial Lawyers, Inc.'s war on drugs.
<<previous section | next section>>
40. See http://www.classactionconnect.com/issue_vioxx.htm.
41. See http://classactionamerica.com/.
42. See http://www.aphroditewomenshealth.com/news/20040424000521_health_news.shtml
(noting that "NSAIDs, including the pain medications aspirin, ibuprofen and
naproxen, are one of the leading causes of stomach ulcers and have been associated
with side effects ranging from stomach upset to stomach bleeding, which can
be life threatening. In fact, NSAID use leads to more than 103,000 hospitalizations
and 16,500 deaths each year in the United States").
43. See, e.g., Press Release, U.S. Food and Drug Admin., FDA Issues Public
Health Advisory on Vioxx as Its Manufacturer Voluntarily Withdraws the Product
(Sept. 30, 2004), available at http://www.
fda.gov/bbs/topics/news/2004/NEW01122.html. The Vioxx study has subsequently
been published in the New England Journal of Medicine; see Robert
S. Bresalier et al., Cardiovascular Events Associated with Rofecoxib in a
Colorectal Adenoma Chemoprevention Trial, 352 New Eng. J. Med. Health Care
1092-1102 (Feb. 15, 2005).
44. See Frankel, supra note 6.
45. See Associated Press, Jury Finds Merck Liable in Landmark Vioxx
Case (Aug. 19, 2005), available at http://www.msnbc.msn.com/id/9006921/.
46. See Bloomberg, Merck Says Vioxx Lawsuits Increased 15 Percent in
Past Month (Aug. 25, 2005), available at http://www.coreynahman.com/vioxx_lawsuit.html.
47. See United Press International, Vioxx Recall Seen as Costing Billions
(Nov. 4, 2004).
48. See Aaron Smith, Merck’s Vioxx Bill Could Hit $50 Billion, CNN/Money,
Aug. 22, 2005, at http://money.cnn.com/2005/08/22/news/fortune500/merck/.
49. See Bresalier, supra note 43.
50. See generally Phantom Risk: Scientific Evidence and the Law (Kenneth
R. Foster et al., eds., 1993).
51. Peter w. Huber, Galileo's revenge: Junk Science In the Courtroom 2-3 (1991).
52. The federal courts have improved their evidentiary standards; see
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), but loose
evidentiary requirements persist in many state courts.
53. See Marcia Angell, Science on Trial: Medical Evidence and the
Law in the Breast Implant Case, 28 CIv. Just. MeMo (Manhattan Inst. Center
for Legal Pol’y, Aug. 1996), available at http://www.
54. David E. Bernstein, Breast Implants: A Study in Phantom Risks, 5
res. Memo (Manhattan Inst. Center for Legal Policy, Apr. 1995), available
55. Sherine E. Gabriel et al., Risk of Connective-Tissue Diseases and Other
Disorders after Breast Implantation, 330 new eng. J. Med. 1697-1702 (June
56. See Bernstein, supra note 54.
57. See Angell, supra note 53.
58. See L. B. Holmes, Teratogen Update: Bendectin, 27(2) Teratology
277-81 (Apr. 1983).
59. See David E. Bernstein, Learning the Wrong Lessons from "An American
Tragedy": A Critique of the Berger-Twerski Informed Choice Proposal, George
Mason Law & Economics Research Paper No. 05-15 31 (Aug. 2005), available
60. See Michael D. Stovsky, Comment, Product Liability Barriers to
the Commercialization of Biotechnology: Improving the Competitiveness of the
U.S. Biotechnology Industry, 6 High Tech. L.J. 363, 372 n.49 (Fall 1991),
available at http://www.law.berkeley.edu/journals/btlj/articles/vol6/Stovsky.pdf.
61. See Melanie Ornstein et al., Bendectin/Diclectin for Morning Sickness:
A Canadian Follow-Up of an American Tragedy, 9 Reprod. Toxicology 1 (1995).
62. See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 582
(1993). The Food and Drug Administration has acknowledged that "available data
does not demonstrate an association between birth defects and Bendectin." Daubert
v. Merrell Dow Pharmaceutical Co., 43 F. 3d 1311, 1314 (9th Cir. 1995).
63. See Paolo Mazzotta et al., Attitudes, Management and Consequences
of Nausea and Vomiting of Pregnancy in the United States and Canada, 70
Int'l J. Gynecology & Obstetrics 359 (2000).
64. See Trial Lawyers, Inc., supra note 1, at 10-11, available
65. See Frankel, supra note 6.
67. See id.
69. See id.
70. See id.
73. See generally Peter W. Huber, Liability: The Legal Revolution and
Its Consequences 153-71 (1988).
74. See generally Guido Calabresi, The Cost of Accidents: a LegaL and
Economic Analysis (1970).
75. See George Priest, Products Liability Law and the Accident Rate,
in Liability: Perspectives and Policy 184, 184–94 (Robert Litan & Clifford Winston,
eds. 1988) (showing that the decline in accident rates "has been steady and
consistent both before and after the initial expansion of products liability
law," with "little, if any, correlation between the decline in accident rates
and the expansion in tort liability," characterized in Richard Epstein,
Cases and Materials on Torts 889 (7th ed. 2000)).
76. See Paul H. Rubin & Joanna Shepherd, Tort Reform and Accidental Deaths,
Emory Public Law Research Paper No. 05-29 (Aug. 2005), available at http://papers.ssrn.com/sol3/DisplayAbstractSearch.cfm.
77. Huber, supra note 73, at 164.
78. See Arkin, supra note 19.
79. See id.
80. See id.; Patient Compensation Exploratory Committee, The Impact
of the Tort Litigation Machine on Women's Reproductive Health (2003); Walter
Olson, Company to Settle 36,000-Plus Norplant Suits, at http://www.overlawyered.com/archives/99aug2.html#990827c
(discussing $50 million partial settlement of Norplant claims).
81. Cf. Davis v. American Home Products Corp., 844 So. 2d 242 (La. Ct.
82. See Arkin, supra note 19.
83. See News Release, The University of Texas M.D. Anderson Cancer Center,
Researchers Confirm Vioxx Nearly Doubled Cardiovascular Risks in Cancer Prevention
Study (Feb. 15, 2005) (citing Vioxx study primary author, Robert S. Bresalier,
as saying that Vioxx and related drugs "potentially ha[ve] very important roles
in a variety of diseases—arthritis, cancer prevention, cancer treatment, treatment
of Alzheimer's disease, treatment of precancerous lesions, not only in the colon
but in the esophagus and many other organs") (on file with Manhattan Institute).
84. See id.
85. See Harris Interactive, Pharmaceutical Liability Study (July 13,
2003), available at http://www.
86. See id.
87. See generally Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301
88. See, e.g., Amicus Brief, Motus v. Pfizer, Inc., Nos. 2-55372, 02-55498
(9th Cir. Sept. 3, 2002).
89. Cf. Eric Helland and Alexander Tabarrok, The Effect of Electoral
Institutions on Tort Awards, 4 aM. L. & eCon. rev. 341, 341-70 (2002).
90. Richard Scruggs, Asbestos for Lunch, Prudential Securities Financial
Research and Regulatory Conference (May 9, 2002), in Industry CoMMentary
(Prudential Securities, Inc., New York), June 11, 2002, at 5.
1314 (9th Cir. 1995).
91. See Heather Won Tesoriero, Merck Loss Jolts Drug Giant, Industry,
Wall St. J., Aug. 22, 2005, at A1.
92. See Roger Parloff, The Preacher Who's Raising Hell with Merck,
Fortune, Aug. 8, 2005, at 20.
93. See Tex. Civ. Prac. & Rem. Code §§ 41.003, 41.008 (2004).
94. See Ted Frank, Ernst v. Merck—one more view, PointOfLaw.com,
Aug. 22, 2005, at http://www.pointoflaw.com/archives/001477.php#1477.
95. See Richard Epstein, Ambush in Angleton, WAll St. J., Aug.
22, 2005, available at http://www.pointoflaw.com/columns/archives/001482.php.
96. Tesoriero, supra note 91, at A1.
97. See Alex Berenson, Lilly to Pay $690 Million in Drug Suits,
N.Y. Times, June 10, 2005, at C1.
98. Though the FDA has required Eli Lilly to put a warning label on Zyprexa,
it has kept the drug on the market. See id.
99. See SeegerWeiss LLP, Firm Profile, Christopher A. Seeger,
100. See id.; cf. Paul Davies, Merck Begins Its Defense in
Second Vioxx Trial, Wall St. J., Sept. 15, 2005, at A16.