Lawyers Inc. Health Care
The Lawsuit Industry's Effect on American Health, 2005
HAZARDOUS TO OUR HEALTH
Trial Lawyers, Inc. hurts consumer health with its full-fledged assault on the U.S. medical system.
Last November, hundreds of trial lawyers converged on Las Vegas to plot a strategy for their assault on Merck Pharmaceuticals and its besieged painkiller Vioxx. They divvied up key tasks and traded marketing and legal ploys in a confab worthy of a Fortune 500 company launching a major new product.
Meet the health-care division of Trial Lawyers, Inc., which regularly delivers outsize profits for the plaintiffs bar at the expense of doctors, hospitals, consumers, and the health-care system itself. Trial lawyers have honed their health-care playbook to a simple but devastating formula gin up public outrage, recruit intimidating hordes of plaintiffs, and rewrite medical science to fit the claims of injury.
Drug Torts: A Massive Pain
Trial Lawyers, Inc.s highly effective business model has undone corporations from Armstrong World Industries to W. R. Grace, but arguably nowhere have the litigation industrys tactics been more aggressive and sophisticated than in the mass product-liability suits that have dogged pharmaceutical manufacturers for two decades. The plaintiffs bar and its allies in consumer lobbies like Public Citizen have torpedoed dozens of drugs, driving many off the market. Of 39 pending product-liability cases currently before the Judicial Panel on Multi-District Litigation, which determines jurisdictional issues for mass torts, 22 involve drugs or medical devices. To be sure, some drugs have harmful side effects, but they are often exaggerated and avoidable. Others, such as Norplant, a long-term reversible contraceptive, have been hounded off the market despite evidence that its side effects are little more than a nuisance.
Bolstered by its success, and spurred on by the pharmaceutical industrys prolific development of useful and profitable new drugs, Trial Lawyers, Inc. has been stepping up its assault. The litigation industry is using increasingly sophisticated plaintiff-recruiting techniques, which include not only traditional advertisingfully 46 percent of all trial-lawyer advertising on television is directed at culling plaintiffs for drug lawsuits (see graph)but also new tactics that vary from hitting daytime talk shows that attract the poor and unemployed to running Internet ads that can reach more sophisticated audiences.
Its no surprise that the plaintiffs recruited by such techniques usually have feeble cases. Nor does it really matter. Trial Lawyers, Inc. needs only to get a couple of multimillion-dollar verdictsusually in tort-friendly courts where judges are in the pocket of the plaintiffs barand it can begin to make the real money from cowed defendants who settle the thousands of weaker claimsoften for billions of dollars.
Consider the Fen-Phen mass tort, for example: a Mayo Clinic study found that the widely used diet drug appeared to cause heart-valve damage in 24 individuals, which prompted the Food and Drug Administration to pull the drug from the market; soon after, Trial Lawyers, Inc. set up echocardiogram mills in hotels across the country that churned out thousands of class-action claimants. An audit of a sample of plaintiffs echocardiograms found 70 percent ineligible for compensation, many of them having been doctored to produce evidence of disease. Nevertheless, once Fen-Phens maker, Wyeth, lost two verdicts totaling more than $120 million, it began to settle. So far, Wyeth has forked over $14 billion and estimates its total liability at $21 billion.
Doctors Under Siege
Their deep pockets make drug companies sitting ducks for Trial Lawyers, Inc.,
but the litigation industry has also found less well-heeled
Obstetricians continue to fall prey to suits alleging that the doctor's failure to perform a Cesarean section caused oxygen deprivation during delivery, which in turn caused cerebral palsy in the newborn. These suits, long a staple of the malpractice bar, have grossed millions in fees for trial lawyers like former senator and vice presidential candidate John Edwards. Notwithstanding the fact that research has shown that cerebral palsy is only rarely attributable to birth asphyxiation—and that the dramatic increase in C-section rates has led to no decrease in the percentage of infants born with cerebral palsy—plaintiffs' attorneys continue to flog this theory to gullible juries. Last year, one of the highest jury awards ever in a medical malpractice case—$112 million (later settled for $6 million based on a pre-verdict agreement)—went to a New York couple who claimed that doctors failed to act on signs of fetal distress during the mother’s protracted labor.
The cost of such litigation industry tactics is lower-quality health care. Trial Lawyers, Inc.'s cerebral palsy suits not only have helped spur an increase in unnecessary C-sections, at a cost to mothers' health, but also have succeeded in shutting down maternity wards—Philadelphia has lost three in recent years—thus forcing pregnant women in certain parts of the country to travel hours for treatment.
The Litigation Industry's New Health-Product Lines
Any well-run business must constantly explore new product lines, and the health-care division of Trial Lawyers, Inc. is no exception. In recent years, the plaintiffs' bar has been busily expanding its portfolio of health-care products. Having successfully persuaded some judges to accept novel theories of elder abuse, the trial bar has driven up the malpractice premiums of nursing homes. Hospitals have long been accustomed to malpractice suits over surgical mishaps and birth defects, but now litigation-industry leaders like Dickie Scruggs, who led the states’ suits against the tobacco companies, have made class-action defendants out of nonprofit hospitals that serve the nation’s poorest citizens.
Yet Scruggs's nonprofit hospital suits are small potatoes compared with his ventures alleging, on behalf of 145 million patients, that health maintenance organizations were guilty of fraud and racketeering. Copying a page from the playbook he used against Big Tobacco, Scruggs cozied up to Wall Street analysts and investors, intimating what the fallout of an adverse verdict might be. Although the biggest cases ultimately were dismissed, two insurers—after watching their stock prices tank—settled for half a billion dollars each.
Ultimately, while Scruggs and his buddies in the plaintiffs' bar get rich, the average health-care consumer loses—through higher costs, reduced access, fewer products, and less innovation. Bloodletting was a core medical treatment from the time of Hippocrates to well into the last century, but if today's leeches in the litigation industry are not constrained, they may suck the lifeblood out of the American health-care system.
14. See David Hechler, First Vioxx Fight: Where to Litigate,
Natl L.J., Nov. 15, 2005, at 1 (discussing
conference sponsored [in Las Vegas] by Mass Torts Made Perfect, for plaintiffs
lawyers only, [which] featured five hours of Vioxx presentations on Nov. 11 and 12).