Plaintiffs awarded $9 billion in Actos trial

medium_3926259585Plaintiffs won $1.5 million in compensatory damages and $9 billion in punitive damages in the first federal bellwether trial over Type 2 diabetes drug Actos. Co-lead counsel Richard J. Arsenault, of Neblett, Beard & Arsenault of Alexandria, La., and Paul J. Pennock, of Weitz & Luxenberg in New York opposed defendant’s motion for a new trial, saying that the verdict should be upheld because there is no law that limits punitive damages to fit in a single-digit ratio with compensatory damages.

Arsenaul argued that corporations should be held responsible and deterred from further reprehensible behavior, especially when it comes to “chemicals that are ingested by millions of people”, chemicals that the manufacturers admit “always carry some risk”.

The plaintiff’s memorandum can be read online (external pdf)

Defendants Takeda Pharmaceutical Co. Ltd. and Eli Lilly and Co. have motioned for a new trial. Takeda general counsel Kenneth Greisman opposed the ruling saying that they “respectfully disagree”, believing that no damage award is justified for the evidence that has been put forth.

The $9 billion award would constitute 37% of the revenues generated from the sales of drug Actos in the United States. In 2013, the manufacturers’ net worth were $23.7 billion and $17.6 billion for Takeda and Eli Lilly respectively. According to the plaintiffs, Actos has generated $24.2 billion since it was introduced on the marketplace in 1999 till 2012.

Plaintiff Terrance Allen claims that he developed bladder cancer as a result of using Actos. The plaintiffs argued that the jury’s findings for reprehensible behavior are supported by ample evidence. Part of that behavior, the plaintiffs say, includes the spoliation of evidence by Takeda in a 2002 litigation. U.S. District Judge Rebecca Doherty of the Western District of Louisiana has ruled in June that Takeda acted in bad faith, destroying evidence about the drug which indicated to the drugmaker knowing about the potential risks of its Actors drug.

For comparison, Exxon Mobil Corp was fined $5 billion by a jury in Alaska for the Exxon Valdez oil spill in 1989. The U.S. Supreme Court found that the “$5 billion” award had been excessive and the penalty was finally reduced to $500 million. While there is no formula by which courts decide how high is too high, federal courts are critical with the punitive to compensatory damages ratio, being more likely to agree to a number that falls into the single-digit range, according to legal experts.

A jury verdict last May was nullified by an U.S. judge after plaintiffs failed to substantiate that the drug had caused cancer. The amount sought was for $6.5 million.

France and Germany had suspended use of Actos in 2011 because of concerns tying the drug to increased risk of cancer.

photo credit: Charles Williams