Kevin Drum complains that "[H]aving already decided that injured patients can't sue medical device makers, the Supreme Court is likely to extend that ruling to apply to makers of prescription drugs too". Call me a crazy libertarian, but shouldn't regulatory approval get you a pass on lawsuits? I mean, obviously, if you mislead the Feds, you should be subject to criminal prosecution. But I don't understand quite why FDA approval of drugs and medical devices hasn't long provided legal safe harbor for their manufacturers. The defects that show up, such as the Vioxx and Fen-Phen problems, are discovered long after approval precisely because they're so rare that they don't show up in ordinary clinical trials. If the government experts, who are presumably highly motivated to avoid catastrophes, can't spot the danger, why do we expect the drug companies too?
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Wouldn't the libertarian (economic) viewpoint suggest that the profit motive is far more compelling than any government employee's motivation can be, thus implying that the possibility of being sued is a far better deterrent to Bad Side Effects than even a highly-motivated but still-not-personally-responsible government oversight official?
I'm not fully up to speed on the pharma litigation, but I think that the central issue was/is a matter of Merck, et al keeping the drug on the market despite having knowledge of these problems.
For the record, I agree with your basic argument, and think that "big pharma" gets a bad rap.
People who get injured while attached to healthcare devices are a victim class. They've been nefariously screwed by Big Healthcare and this, in turn, entitles them to crank the tort system like a rigged slot machine.
At least, I think that's how it works. My pilfered decoder ring spits out some crazy stuff during election years.
It seems to me that the FDA approves the safety of the theoretical mechanism, not the actual medical device. Can individuals still sue for mechanical failures due to engineering flaws unrelated to the actual mechanism that received FDA approval?
Christian,
From a libertarian perspective I would say that if the government forces a drug maker to submit to government certification before it can sell its property on the market, and then that certification of safety turns out to be bogus, the people harmed by the drugs should be allowed to sue the *government* for damages. After all, it arrogated to itself the role of "official determiner of drug safety". If it failed in that mission it should, at the very least, be required to reimburse the drug company for the cost of the approval process.
That being said, either the government is better at screening out drug problems than the company's profit motive is -- or it isn't.
If it is, then it seems unfair to punish the corporation for something that the government missed. It'd be like blaming Boeing for letting the 9/11 attacks happen. If, on the other hand, the government is inferior to the profit motive in motivating companies to release defect-free drugs, then what the hell is the FDA good for? Why is their approval mandatory if it, in fact, sucks at fulfilling its ostensible goals? Either way, the double-whammy of (a) making drug companies pay through the nose for official government recognition that their product is safe and then (b) letting the courts nail the drug companies for unforseen effects, seems unfair.
AlexL -
that's not quite right. For medical devices, the FDA offers approval to specific devices for - not to the therapy that the device implements. So no, the FDA process (in theory) should also reveal engineering flaws that might cause a mechanical failure during proper device usage. And they are pretty thorough about this. But you also have to realize that the FDA's control over devices is a marketing issue - they control what you can and can't sell your device to do. This of course, doesn't address issues with off label use, which are perfectly legal but not covered by FDA approval.
I think the proper libertarian perspective would not argue for a safe harbor for big pharma, but rather for inclusion of the FDA as a co-defendant in civil suits.
Well, Megan, there's this little thing called "administrative capture" that causes many libertarians to doubt the wisdom of a safe harbor in this situation.
If the government experts, who are presumably highly motivated to avoid catastrophes, can't spot the danger, why do we expect the drug companies too?
We don't. We just expect that when something bad happens, someone has to give us money.
minor nit.
the final "too" in the post should be "to"
Sorry, the homonym thing is a peeve.
Where are all of our lawyers?
Products liability is typically a strict-liability cause of action. This means that fault is irrelevant; a plaintiff need only establish 1) defectiveness 2) causation, and 3) injury. Even if a manufacturer took heroic precautions, if its products hurt people, the maker and sellers are all liable.
Defective typically means "unreasonably dangerous for intended purposes or foreseeable misuses." It can be the result of "defective design," which means that the product as intended is dangerous, or of a manufacturing defect, which means an error was made in production. There is also "failure to warn," which involves inadequate warnings on packages, and explains the drug inserts with the .5 point type.
So if a drug kills you, either because it was used as intended or it was foreseeably prescribed for an off-label use, then the drug company can be held liable, even if they never knew of the danger. This is true for pretty much all consumer products.
I should point out also that Medtronic is strictly a stautory intepretation decision. If Congress doesn't like it, they can pass a one-sentence law to reverse it.
Our lovely product liability laws - at least Strict Product Liability - are such that the elements of what a plaintiff must prove to prevail are pretty thin:
"Under a strict liability standard, once the plaintiff establishes that a product is defective, liability results from that fact alone no matter how much care was applied during design, manufacture, marketing, distribution and sale."
http://www.expertlaw.com/library/product_liability/product_liability.html
Take a look at the General Aviation Revitalization Act for an example of how an entire industry can be litigated to the brink of disaster, requiring congressional action. FAA approval & certification of aircraft didn't help manufacturers there, either.
Rob Lyman's comment sums up the law of products liability--in theory, anyway--pretty accurately. The real problems with these suits are (1) junk science--the kind of thing that sank Bendectin and silicone breast implants (on litigation costs alone) and (2) the legal system's pretty consistent failure to understand that a drug that sometimes hurts or kills people may nevertheless be worth producing because of all the good it does. (After all, what product doesn't kill people now and then?) It has been correctly observed that if aspirin and penicillin had just been invented, no drug company would dare produce either. Aspirin causes internal bleeding, which can kill people; penicillin reactions have killed lots of people. Today, no manufacturer would even bother to try for FDA approval of drugs with these side effects. Yet both have saved countless lives and we'd be a lot worse off without them.
So, as a practical matter, the law of products liability is something like "any new product that can hurt people can be found defective by a jury, and even if it turns out that it's completely harmless (Bendectin, e.g.), the costs of defending against lawsuits may be prohibitive."
I am inclined to think that the product-liability system does a lot more harm than good. (Can I prove this mathematically? No.) The libertarian position is to let the market--not the courts and not the FDA--resolve these matters. Companies really don't have an incentive to kill off their customers in significant quantities.
And juries have no real incentive not to just award for a plaintiff regardless of actual liability and go home feeling better.
Of course you could argue that Pharma companies can simply price their products high enough to generate enough profits to support the occasional wave of litigation and the attendant costs.
But if we start capping this stuff, are you going to be the guy who tells the guy whose liver is wrecked or w/e "Sorry bro, cost/benefit analysis indicates you have to take the hit on this."
I keep thinking of things I should have said earlier.
Because this is a stautory interpretation decision based on the Medical Device Act, there is no particular reason to predict the same result for pharma based on the Food, Drug, and Cosmetic Act. The MDA has an express provision invalidating inconsistent state regulations; SCOTUS just held that the tort system is a form of regulation. The FDCA lacks such a preemption provision. SCOTUS might still come out the same way, but the statutes are in fact quite different, so the results might be, as well.
I'd have to argue for a special class for drugs, because the flaws are far different in nature than the failure of engineering, or material failure of an appliance.
Drugs offer a specific vehicle for a specific reaction within human beings. However! [because there always is one] The variability of human beings precludes anything like engineering certainty. If you make 100,000 toasters, every one will work similarly, in an understandable way. If the power cords all fail on the 1001st use, then indeed this is an engineering flaw. If it burns your house down, you should be able to sue.
Drugs on the other hand, have no such certainty. Essentially they are graded on the bell curve where a certain group has the intended effect, and the other effects are low. They do lotsa tests, they have trials etc, etc... But, even when the outliers are small to non-existant, the tests are still a statistical projection. They don't and can't test under every circumstance, in every person's body.
In addition, it isn't like the FDA actually conducts all it's own tests to see what they think independantly. They simply review the testing that the company has done, based on FDA proceedures, and see if they think that is within the tollerances they are looking for.
FDA Drug Approval Process
This means that the FDA ISN'T THE TESTING ORGANIZATION. They review the tests that the Pharma pays for. Those tests generally cost around a Billion dollars from basics to final.
All that said, this approach works well in general, because it's hard to hide a rampaging elephant that is tearing up the room. IF the pharma company is willing to bet the Billion dollars to get the approval, the downside of putting out something unsafe is very large... But, that is unsafe for the middle of the bell curve. If there is an outlier that isn't caught in the tests, often the FDA will allow a labelling change, to warn of a small batch of side effects.
Because of these give and take measures, various steps and checks and balances of the steps, and the TIME involved [years], this prolly works pretty well for most drugs, and should provide some legal safety.
IF you can prove that the Pharma was covering something up, writing happy faces instead of showing how the drug would cause a problem for a certain group, THEN, I think the legal safety should go, and criminal prosecutions should ensue.
And still, a certain number of people will have unknown interactions , and a few will die... There are 300M+ variables in this country, and nobody can solve for all that.
It is possible that the final stage trials should be conducted directly by the FDA, and the Pharma should pay for that, so that there is a check on obvious coverups and so forth, and maybe that should provide that safe haven.
I think in the final analysis, people are simply expecting too much from the FDA at it's current size and funding. If they were to check EVERYTHING, themselves, and their approval stamp was the golden ticket, they would likely be as big as the rest of the government, take some large percentage of GDP to do that, and they would still be arguing if asprin was safe and effective. Like everything, there is an inherent tradeoff of size, speed, and scope, and I think most people don't realize that the FDA doesn't look at most things, they take the absense of bad reports as the proof that nothing bad is happening. Apparently they have been mostly correct for a long time...
A meta-comment:
It's funny how many people misinterpret Megan's normative "I don't quite understand why" question with a positive response explaining the rules of liability or of the statute at issue.
I know that her question could be theoretically interpreted either way but seriously, folks - it's called context.
Have you seen the FDA lately? Like any other government agency under Bush, you can't trust what they say. Are you telling me that if you happened to be harmed that you wouldn't want to sue? If you sign all your rights to sue away if you are injured by an FDA approved product, I'd be happy with that. I, however, am not willing to sign that right away.
Thank you, Rob Lyman, for a very educational series of comments.
But if we start capping this stuff, are you going to be the guy who tells the guy whose liver is wrecked or w/e "Sorry bro, cost/benefit analysis indicates you have to take the hit on this."
I lean towards "yes", at this point. But you have to have institutions you trust to be working in the best interests of patients, rather than for the profit motive. I really think this point needs to be addressed. I'm more willing to indemnify my doctor against suits, who has a personal relationship with me and who doesn't seem to clearly benefit from treating me in ways that neglect my actual health, than I am to indemnify drug companies, who have no personal relationship with me and who benefit from my using their product, whether it's good for me or not.
Damn...I just knew it was Bush's fault!
er, yeah, Joe Klein's Conscience... Vioxx was approved BEFORE Bush took office, and had been studied all during Clinton's administration... another drug called Seldane that was pulled [and that I was on at the time] was originally put through when Carter was in the White House.
Does that mean that the President has little say on which drugs are approved, or bad, or that it's a Democrat conspiracy?
give it a rest, will 'ya?
It's funny how many people misinterpret Megan's normative "I don't quite understand why" question with a positive response explaining the rules of liability or of the statute at issue.
That would primarily be me you're talking about, so let's consider the context that our gracious hostess provided:
If the government experts, who are presumably highly motivated to avoid catastrophes, can't spot the danger, why do we expect the drug companies too?
My point is that fault isn't an element of products liability--for any product. A manufacturer need not be "able" to spot the danger to be held liable, regardless of the kind of product involved. So the normative intuition here--that you shouldn't be held liable unless you make a mistake--doesn't correspond to how the law usually works. This makes the intuition itself a tad suspect.
Well I'm not willing to blanket indemnify anyone, but I do think that there has to be a better tort system than just letting people award massive payouts without regard to actual fault and a very strong case on the merits.
Rob and Alan covered the legal basics pretty well, which is nice considering the media didn't cover the decision very well. But it's important to note the Supreme Court decision applied only to design defects, not manufacturing defects.
Obviously, it makes no sense that FDA approval would limit medical device manufacturers liability when they deviate from the specific plans that have been approved by the FDA. The logic of having such limitations of liability when it comes to design defects is far more compelling- If companies spend millions in order for FDA experts to say their devices are safe for use, why should the public be able to sue on the theory of a design defect?
There's a similar problem when it comes to prescription drugs. If FDA experts approve a drug for use, does it really make sense for a scientifically untrained jury to find that a drug really isn't safe for use? Every drug, every medical device has potential risks, and the whole reason for the FDA's existence is to weigh these costs and benefits. Personally, I don't think the FDA always does such a bang up job, but I'd trust the FDA to be a better judge of risks and benefits than a random selection of 9 jurors.
Megan asks the very good question of whether regulatory approval should give drug companies a pass and it's a really good question. If we're going to have these massive regulatory agencies, shouldn't their approval actually mean something, legally. If not, why bother having regulatory agencies give their sealof approval in the first place?
If we're going to have these massive regulatory agencies, shouldn't their approval actually mean something, legally.
Um...how about it means you can sell the drug in this country, legally?
If not, why bother having regulatory agencies give their sealof approval in the first place?
Because stopping people from selling poisonous or ineffective drugs BEFORE they kill people or fail to work is more effective than suing them for doing so afterwards? Even when you retain the latter option as a last resort?
Shorter McArdle: F*ck federalism, my corporate paymasters must be satisfied.
And f*ck Congress, drug companies should have immunity simply because I "don't understand quite why" they shouldn't.
And one more thing-
How should strict liability work in regards to something like drugs? It's fine to say that your typical everyday products shouldn't cause injuries, but all drugs have potential side effects. There's a difference between saying my lawn motor shouldn't explode and my prescription drugs shouldn't have any risks.
The issue really isn't that drug makers should be able to spot potential problems, the issue is one of risk benefit analysis and who's to make those determinations. If a drug saves a dying person's life, but ends up killing another person, should the family of the person who died be able to recover damages on the theory that the drug suffers from a design defect?
It's almost as if Ms. McArdle has never heard of regulatory capture, one of the few arrows in the libertarian quiver without a nerf ball on the end of it.
Does this mean that if the government isues me a driver's license, I'm not responsible for any damage that results from my accidents as long as I was driving legally?
It's fine to say that your typical everyday products shouldn't cause injuries, but all drugs have potential side effects.
Well, all handguns, chainsaws, and motorcycles are quite a bit more dangerous than Vioxx. Certianly you wouldn't pick the average prescription drug as a murder weapon. But the question is, is it unreasonably dangerous for its purpose? In principle, that's a test that can apply just as well to drugs as any other product.
Chemo drugs are a lot more dangerous than ED drugs, and that's not unreasonable given their respective purposes. It's a balancing act.
I have to agree that juries are poorly equipped to strike this balance, and that a well-run government agency might be better equipped for it.
"But if we start capping this stuff, are you going to be the guy who tells the guy whose liver is wrecked or w/e "Sorry bro, cost/benefit analysis indicates you have to take the hit on this."
Sure, otherwise you are in effect endorsing the Precautionary Principle. The law & economics answer is for drug companies to simply maintain a fund to compensate the "losers" of the drug market. They basically do that now, but are very reluctant to pay for the statistically predictable bad results (since no drug or product can ever be 100% safe). If both drug manufacturers, the FDA and consumers were more realistic about risk and open about it, there would be less of a reliance on the courts.
http://www.google.com/search?hl=en&q=fda+validation&btnG=Search
Validation should be the one and only reason to be against FDA regulation. Many out of date processes are still in use throughout pharma and biotech, simply because the cost of validating the new process in prohibitive. So a better safer way to manufacture the drug is not used. Not to mention the regulation are so vague, an entire industry of past FDA regulators has sprung as consultants to help industry interpret the regs.
Another lesser reason is off-label use. Once a drug is approved it can be used for anything, not only it's approved use. The FDA never evaluated the efficacy (phase III trials - the biggest and most costly) of the drugs for off label use, the market does.
Megan,
Isn't the company that stands to get sued and is manufacturing the product even more highly motivated to avoid catastrophe? Wouldn't allowing FDA approval being a safe harbor lead to all sorts of unintended consequences of doing everything to get FDA approval and then not doing anything if problems crop up later.
There's a similar problem when it comes to prescription drugs. If FDA experts approve a drug for use, does it really make sense for a scientifically untrained jury to find that a drug really isn't safe for use? Every drug, every medical device has potential risks, and the whole reason for the FDA's existence is to weigh these costs and benefits. Personally, I don't think the FDA always does such a bang up job, but I'd trust the FDA to be a better judge of risks and benefits than a random selection of 9 jurors.
The reason is that in theory, we have a legal system that works for and by the common man, not a totalitarian technocrati that makes all our decisions "for our own good".
Unfortunately juries, no matter how well educated, are subject to being manipulated by a limited presentation of a person, real or fictitious, and analyzing the law on that basis rather than the facts. The bleeding hearts that showed up here to remonstrate Megan for her candid observations over the circumstances of Heath Ledger's passing are a perfect example of the kind of people you, as defendent, do NOT want to see sitting in the jury box, because a plaintiff's attorney worth even half his salt will play them like marionettes.
Seems things could be improved markedly if the manufacturers had the option of an opt-in insurance pool fund whereby they would be required to stay with the fund for a minimum period and pay a floating percent of their revenue into the fund. Participating manufacturers would then be indemnified from standard tort proceedings unless fraud or negligence could be proven, and aggrieved parties would have the option of filing an insurance claim against the fund and receive injury payouts on a rigid book schedule. The scheduled payouts, in turn, would be calculated to compensate the sufferer for any temporary or permanent loss of income plus reasonable medical and peripheral expenses.
There might also be some special class of award to provide grievance compensation for intangibles (loss of marital consortion, loss of a specific faculy such as blindness, etc.) but the whole "pain and suffering" aspect would be thrown out the window.
"The issue really isn't that drug makers should be able to spot potential problems, the issue is one of risk benefit analysis and who's to make those determinations."
This sentence is spot on, but your next one misses the point.
"If a drug saves a dying person's life, but ends up killing another person, should the family of the person who died be able to recover damages on the theory that the drug suffers from a design defect? "
YES. If the drug company is held strictly liable, it internalizes all of the costs of the drugs, and is in the best position to make an informed cost benefit analysis of whether the drug does more harm than good. It also has proper incentives aligned to ensure that it makes the correct decision--if the drug can be sold for a price that is greater than the cost of the harm the drug produces, the company keeps producing it, and if not, it stops.
If there is no liability, the drug company has no incentive to stop selling a drug that does more harm than good. More importantly, becuase the consumer has no lawsuit, no one even hears about the ill effects of the drug. The consumer has no incentive to report adverse side effects, and the producer has every incentive to down play them. In that situation both the incentives and the information flow are working AGAINST the proper allocation of resources.
I can understand arguments against the FDA, but getting rid of liability for drug manufacturing would be making the situation far worse, like cutting off your nose to spite your face.
I live in Ohio where strict product liablity has been tort reformed to insignificance. We pray that the FDA is doing its job. If not, we have no remedy.