Should Pharma Company Pay Punitive Damages?

Should Pharma Company Pay Punitive Damages?

October 8th, 2013 // 2:41 pm @

Should a pharmaceutical company not have to pay out punitive damages for product liability, because the penalty will limit the ability of FDA to enforce its statutory authority? This is something that Novartis hopes that the Supreme Court is going to answer soon. It is not clear if the justices are going to agree to review the issue in the new session. We should know next week.

In an argument for a review, Novartis cited a ruling in 2009 by the USSC about a woman in Vermont who sued Wyeth, which is now part of Pfizer, in state court after she alleged that she suffered damage from one of the company’s drugs. The company tried to cite preemption but this did not work. Preemption is the notion that FDA approval of a medical product will supercede any state law claims regarding efficacy or safety.

This was a big watershed ruling in the drug industry, but Novartis stated that this decision should not apply to punitive damages. The Levine case, named after the plaintiff, Diana Levine, involved just compensatory damages. Novartis is again raising this issue after a case in 2010 where  NC jury made a $13 million award to a family for misconduct regarding punitive damages. However, that was reduced  later to $867,000.

In that particular case, the jury thought that Novartis did not warn about the risks of Zometa and Aredia, which are drugs that strengthen bones. The name of the woman in this case was Rita Fussman. A federal court upheld the punitive damages ruling after it saw evidence that may have suggested that Novartis had done a cover up at high levels regarding side effects.

Novartis lost an appeal on that case, but it is now hoping that the USSC will agree that allowing such punitive damages will undermine the FD&C Act, and also calls into question FDA’s ability to enforce proper product labeling and improper behavior done by drug companies.

Novartis has stated that FDA has total discretion to decide how to proceed against a pharmaceutical company that has done some sort of alleged misconduct. Punitive damages will conflict with this federal oversight, by putting enforcement discretion in the hands of plaintiffs, who are acting as a sort of private attorney general.

The legal team for the Fussmans stated that the punitive damages in her case weren’t awarded to punish Novartis for violating FDA rules, but to punish the company for its deception and its disregard for the pain it caused the plaintiff.

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