The next wave of drug lawsuits is coming.

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The New York Times


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April 22, 2006

In the Money, and in Court

By ALEX BERENSON

The next wave of drug lawsuits is coming.

As Merck reels from 11,500 suits over Vioxx, its arthritis drug, the rest
of the industry is girding for challenges over another half a dozen widely
used medications that plaintiffs' lawyers say have hidden and severe side
effects or were improperly marketed.

Unlike Vioxx, which Merck stopped selling in 2004, the other drugs remain
on the market.

The drugs now under attack include Seroquel, an antipsychotic medicine from
AstraZeneca; Ortho-Evra, a birth-control patch from Johnson & Johnson;
Prempro, a hormone therapy for women from Wyeth; and Fosamax, an
osteoporosis medicine made by Merck. The drugs have combined annual sales
of almost $7 billion and are used by millions of patients.

The first Prempro case is expected to reach trial this summer, and Johnson
& Johnson has already begun to settle some Ortho-Evra cases, according to
lawyers involved in the lawsuits.

In each case, plaintiffs' lawyers are trying, at least rhetorically, to
link their suits to the Vioxx litigation, asserting that the drugs have
serious side effects that their makers did not disclose. In two of the four
Vioxx suits to reach trial, plaintiffs have won large verdicts.

The companies say they have done nothing wrong, and lawyers who defend drug
companies say that the rise in pharmaceutical suits is a reflection of
changes in the plaintiffs' bar, not a reflection of the dangers of the
drugs.

"This is really like cattle moving around a pasture, grazing on the
greenest part of the grass," said Peter Bicks, a defense lawyer at Orrick,
Herrington & Sutcliffe. "The greenest part of the pasture now appears to
be, in the post-Vioxx era, drugs."

The suits are keeping the pharmaceutical industry on the defensive at a
time when drug makers are trying to rebuild their image amid public anger
over prescription drug prices and the fact that some companies did not
disclose negative information from clinical trials during the 1990's.

Lawsuits over prescription drugs carry perhaps the highest stakes of all
product liability litigation, lawyers on each side say. Plaintiffs' lawyers
may spend years and millions of dollars to prepare for a single trial, but
a victory can come with a verdict of $10 million or more.

To gain leverage against the companies, trial lawyers aim to build
"inventories" of hundreds or thousands of plaintiffs that they can settle
simultaneously for hundreds of millions of dollars.

Last year, Eli Lilly agreed to spend $700 million to settle 8,000 lawsuits
over Zyprexa, a drug for schizophrenia that causes severe weight gain in
many patients. Wyeth has spent $15 billion since 1998 to resolve lawsuits
over its fen-phen diet-drug combination, which can cause severe heart
problems and is no longer sold. And Wall Street analysts estimate that
Merck may eventually have to pay $10 billion to $50 billion to end the
litigation over Vioxx, which has been linked to heart attacks and strokes.

While Fosamax, Seroquel, Ortho-Evra and Prempro are still being sold,
clinical trials or reports to the Food and Drug Administration have linked
them to serious side effects. Fosamax has been associated with severe jaw
decay; Seroquel with weight gain, which raises the risk of diabetes;
Ortho-Evra with blood clots, which can cause strokes; and Prempro with an
increased risk of breast cancer.

In each case, plaintiffs' lawyers say, drug makers hid early indications of
the side effects and improperly marketed their medicines.

"These companies just do it again and again and again," said Paul J.
Pennock, a partner who leads litigation against drug makers for Weitz &
Luxenberg, one of the largest plaintiffs' law firms. "They try to create
much larger markets for these drugs than is warranted, particularly given
what they know about the risks."

But lawyers for drug makers say that prescription medicines are as safe now
as they have ever been and that the rash of suits reflects an emboldened
and enriched plaintiffs' bar.

For a decade, large plaintiffs' law firms have profited from suing
corporate America over asbestos-related diseases, but asbestos suits are
slowly drying up, leaving plaintiffs' lawyers searching for new targets,
defense lawyers say. In addition, plaintiffs' firms have grown flush with
cash from settlements of asbestos and tobacco lawsuits and now have the
resources to finance cases that can take years and millions of dollars of
upfront investment.

To build caseloads, plaintiffs' firms aggressively advertise for clients.
Smaller firms then refer potential plaintiffs to a handful of large firms
like Weitz & Luxenberg that can afford to invest in complex cases. In
return, the smaller firms receive a share of the proceeds from any
settlements or verdicts.

"It's an industry, an amazing industry," said Barbara R. Binis, a lawyer
at Reed Smith who has successfully defended Wyeth in several diet-drug
lawsuits. "They all talk to each other, and they all play off what each
other is doing."

Drug suits may also have been spurred by changes in federal laws intended
to discourage class-action litigation, said Benjamin Zipursky, a law
professor at Fordham University. Unlike traditional consumer class-action
cases, in which thousands or millions of plaintiffs with relatively small
claims are combined into a single case, drug lawsuits are usually not
combined into a single mass trial. Instead, each lawsuit is tried
individually, although a single judge oversees the process of document
production and witness depositions for all the cases.

"Class-action reform has a tendency to make class actions less desirable,
and the class-action device is not what's being used in these cases  these
are multiple individual cases," Mr. Zipursky said.

But plaintiffs' lawyers say they do not take on drug cases lightly, despite
the prospect of lotterylike rewards, because pharmaceutical suits are very
difficult to win.

With billions of dollars in annual profits, drug makers have essentially
unlimited resources for their defense, and the cases often turn on
complicated scientific evidence that can be hard to explain to juries. As
they prepare cases for trial, lawyers must spend millions of dollars and
thousands of hours interviewing witnesses and sorting through company
documents. In the last few years, suits over Serzone, an antidepressant,
and Rezulin, a diabetes drug, have largely fizzled.

"These are tough cases," said Christopher Seeger of Seeger Weiss. Mr.
Seeger was among the lead lawyers in the Zyprexa settlement but has lost
the only Vioxx case he has tried. "I don't really hear a lot of plaintiffs'
firms sitting around, saying, 'Here's the next big moneymaker,' because
these are monsters, these cases."

None of the next wave of suits will be as big as Vioxx, lawyers for both
sides say. In the Ortho-Evra, Prempro and Fosamax cases, the potential pool
of plaintiffs is relatively small, numbering thousands of patients instead
of tens of thousands. In the Seroquel cases, plaintiffs will probably not
win huge damages even if they do win their suits, because they are mentally
ill and mostly unemployed, limiting the economic damages they can be
awarded. Damage awards for economic loss are closely tied to income. .

But the cases may offer some advantage for plaintiffs compared with Vioxx
suits, said Tim M. O'Brien, a partner with Levin Papantonio. In both the
Ortho-Evra and Fosamax cases, plaintiffs have a "signature disease," a
condition that is closely linked to use of the drug but is otherwise very
rare. The use of contraceptive patches has been linked to blood clots,
which are unusual in women of childbearing age, while the jaw decay
associated with Fosamax is also very rare. In contrast, the heart attacks
that plaintiffs' lawyers assert were caused by Vioxx have many other causes.

"Those cases that are retained are going to be easier to prove than the
Vioxx cases," Mr. O'Brien said.

The Prempro cases may be the longest shots, because Prempro use has been
linked with a relatively slight increase in breast cancer risk. But Tobi
Millrood, of Schiffrin & Barroway, which represents about 1,000 of the
6,000 Premarin cases nationally, said he believed that he could convince
juries of the link between individual cancer cases and Premarin use.

"Many of the women I represent don't have any of the risk factors that can
be associated with breast cancer," Mr. Millrood said.

Further, the litigation can prove damaging for drug makers even when they
are not financially ruinous. As part of the lawsuits, drug makers must turn
over their internal e-mail and documents to plaintiffs' lawyers. While the
documents are often transferred under seal, they can be leaked or become
public during trials.

The Vioxx case has badly damaged Merck's once pristine reputation by
bringing to light e-mail that contained derogatory comments made about the
Food and Drug Administration in 2000 by Dr. Edward M. Scolnick, who at the
time was Merck's chief scientist.