The Food and Drug Administration is a safety watchdog agency that protects consumers from the effects of dangerous drugs. However, questions have been raised about whose side the FDA is on. User fees paid by the companies regulated by the FDA generate almost half of the organization’s revenue. Money plays a big part in dangerous drug settlements. The drug, medical device, and other companies spend as much as $2.8 billion to get a new product past FDA regulators and onto store shelves. While production costs have gone up, the drug/device exclusivity period has gone down. So, these companies must sell as many pills and gadgets as they can in a very short period of time before cheaper generic versions appear and undercut sales.
As a result, drug safety issues and off-label promotion are at the heart of the biggest dangerous drug settlements in American history.
Many large drug companies bury negative information about their wares to sell as much product as possible. Therefore, many drug users have no idea that a powerful drug has equally-powerful side effects, which, in many cases, have long-term health consequences.
Most people believe that when the FDA approves a drug or device, it is approved for all purposes. However, that’s not true. Bureaucrats only approve items for use in specific situations. Medtronics’ Infuse BoneGraft is a good example. The FDA approved this gadget for use in limited surgical procedures. However, to increase sales, the company also sold it as an effective tool for experimental dental procedures.
At Williams Hart & Boundas, our Houston defective pharmaceutical lawyers are proud to have played a part in many of these large settlements. Maximum compensation for victims is very important to us. However, holding reckless companies responsible for the injuries they cause is even more important to us. That’s why we do not rest until we get to the root of the problem, build a legal case, and obtain the best possible result under the circumstances.
Eli Lilly’s Zyprexa (Olanzapine)
Doctors usually prescribe this antipsychotic drug to treat bipolar disorder and schizophrenia. However, as mentioned, powerful drugs often have powerful side effects. Many of these side effects, like dry mouth and constipation. Others are much more serious. These serious side effects have been the subject of multiple lawsuits.
Diabetes is one of these side effects. Zyprexa increases appetite and therefore weight gain. Additionally, this drug affects proinsulin in the body. This one-two punch significantly elevates diabetes risk, a side-effect Eli Lilly denied for years.
Finally, between late 2006 and early 2007, Eli Lilly paid $1.8 billion to settle about 26,000 lawsuits. However, the company’s legal woes were just beginning.
These large settlements usually go not to individual victims but victim compensation funds. Certain victims, usually those who filed legal actions or were qualified to file legal actions, may pull money from these funds. Usually, a Fund Administrator determines the amount.
If a Houston defective pharmaceutical lawyer advocates for a victim during VCF proceedings, the Fund Administrator, a judge, is much more likely to award maximum compensation.
The ink was barely dry on the settlement papers when Eli Lilly got into a legal dispute with a whistleblower. That whistleblower later paid the company $100,000, so it wouldn’t file criminal charges against him. Nevertheless, the leaked documents led to another spate of lawsuits over alleged off-label promotion.
We should stop briefly and explain the difference between off-label use and off-label promotion. Usually, doctors can prescribe any approved drug for any purpose. However, drug makers cannot encourage such use. That was the issue with the Infuse BoneGraft.
Allegedly, the company paid a doctor under the table to conduct “independent” seminars promoting the gadget’s off-label use.
Based on the documents mentioned above, the Department of Justice and several states sued Eli Lilly, alleging that it violated the False Claims Act and some other consumer protection statutes. The criminal penalties came to about $2 billion.
Abbott’s Depakote (Valproate)
American chemist Beverly S. Burton synthesized valproic acid in 1882, mainly as a migraine headache treatment. In 1962, French scientist Pierre Eymard discovered valproic acid’s anticonvulsant properties. Eventually, Abbott Laboratories obtained the rights to this drug.
Right off the bat, it’s evident that Depakote, which is on the World Health Organization’s List of Essential Medicines, has multiple uses. These uses include migraine and epilepsy treatment and cancer and AIDS (no regulator has yet approved Depakote for these purposes). It also has multiple side effects, which include:
- Pancreatitis and other liver conditions,
- Encephalopathy, an umbrella term that includes various kinds of brain injuries,
- Low body temperature,
- Congenital disabilities,
- Extreme sleepiness, especially among older adults, and
- Suicidal thoughts and behaviors.
These multiple uses and side effects landed Abbott Laboratories in hot water with federal regulators in 2012. That year, the company paid $1.2 billion for alleged off-label promotion. This alleged illegal promotion included using Depakote as a sedative in nursing homes.
Significant criminal fines against large companies often encourage companies like Abbott to change the way they do business. For example, this company earned over $43 billion in 2021. So, the fine was about 3 percent of its revenue. This amount might be enough to get a large company’s attention, but probably not.
As mentioned, most dangerous drug settlements involve victim compensation funds among tens of thousands of victims. However, a Houston defective pharmaceutical lawyer may also file suit on behalf of individual victims. That’s what happened at our office in 2015.
After a girl’s mother had a seizure during pregnancy, her doctor prescribed Depakote. Unfortunately, Depakote’s side effects include congenital disabilities, a risk Abbott has never fully acknowledged. When Maddison, the young girl, was born, doctors diagnosed her with spina bifida, a severe chronic condition that often results in millions of dollars in medical bills.
Not surprisingly, Abbott refused to negotiate a reasonable settlement. So, our professional team took the case to trial and obtained a $38 million judgment. Abbott initially tried to appeal the judgment but later paid it in full.
Unfortunately, Maddison’s story is not unique. In 2007, a California family who had a similar experience obtained $15 million in court.
Johnson & Johnson
The other settlements on our top five list (or bottom five, depending on your perspective) involve multiple drugs. In this case, the J&J drugs were Invega, Risperdal, and Nesiritide.
Risperdal is yet another powerful antipsychotic drug. Much like Depakote, Risperdal also has multiple uses, including:
- OCD (Obsessive Compulsive Disorder),
- Bipolar Disorder, and
Regulators approved Risperdal on a piecemeal basis. In 1993, FDA regulators approved Risperdal as a schizophrenia treatment. Over the years, bureaucrats expanded the schizophrenia categories and added some new ones, such as bipolar disorder and autism.
Frequently, science and technology are ahead of the law. Scientific and technical breakthroughs often come quickly, but the legal process is much slower. For example, the FDA approval process usually takes about ten years. Sometimes, companies think the slow legal process needs a little help, especially when money can be made.
Between 2012 and 2013, J&J subsidiary Janssen Pharmaceuticals paid about $2.5 billion to resolve charges that it illegally marketed Risperdal as dementia, anger management, and anxiety treatment.
Nesiritide, a heart failure drug, has a similar story. The FDA approved Nesiritide for congestive heart failure treatment in 2001. Four years later, doctors discovered this drug had dangerous side effects which the company didn’t tell anyone about. One of the largest heart clinics in the country stopped prescribing Nesiritide. Scios, the J&J affiliate in charge of Nesiritide, agreed to FDA approval restrictions and modifications.
This agreement wasn’t enough for the parent company to avoid an additional $85 million fine. According to the DOJ, “Scios admitted that it intended Natrecor to be used off-label for infusing chronic (non-acute) CHF patients on a scheduled, serial basis and that it understood that this was not an approved use of the drug. Scios also admitted that the FDA-approved labeling for Natrecor did not contain any directions for this scheduled, serial use to treat chronic (non-acute) patients.”
At the time, the 2009 Bextra settlement was the “largest health care fraud settlement and the largest criminal fine of any kind ever.” Considering the previous entries on this list, that’s quite a statement.
However, we’re getting a little ahead of ourselves. Initially, the FDA approved this drug as a treatment for adult rheumatoid arthritis, osteoarthritis, and primary dysmenorrhea. In the late 1990s and early 2000s, concerns mounted about dangerous side-effects the company had buried.
These side-effects included strokes, heart attacks, and a possibly fatal skin disease. Under pressure from the FDA, Pfizer pulled off the shelves in 2005.
A brief side note here. The FDA doesn’t have the power to recall dangerous drugs or other medical products. It may only publically pressure companies to voluntarily recall procuts. In some cases, the FDA can also stop advertisements and other marketing activities.
Four years later, the company paid $2.3 billion to resolve allegations that it misbranded drugs “with the intent to defraud or mislead.” That intentional misconduct finding prompted the huge fine in this situation.
This settlement also involves kickback allegations, something we haven’t discussed yet. It’s generally illegal for drug companies to offer doctors anything of value if they prescribe certain drugs or don’t prescribe a competitor’s drugs. The “anything of value” often includes VIP treatment at seminars and interest-free loans.
This settlement also included Geodon, an antipsychotic drug. According to the DOJ, Pfizer not only illegally promoted Geodon. It also submitted false claims to government healthcare programs for uses that were not medically accepted indications.
In other words, according to prosecutors, to charge the government for off-label use. Pfizer said it was on-label use.
This settlement also included similar allegations regarding Linezolid, an antibiotic, and Lyrica, an anticonvulsant. Pregabalin, Lyrica’s primary ingredient, is a banned controlled substance in the United States and United Kingdom. Despite the controversy, this drug is still available, as is Linezolid. Although Linezolid has what industry insiders call a “high acquisition cost,” it may reduce the length of hospital stays, making it cost-effective.
The granddaddy of them all, is the $3 billion 2012 GSK settlement which involved Avandia, Wellbutrin, Lamictal, Zofran, Imitrex, Lotronex, Paxil, Advair, Flovent, and Valtrex.
The company’s legal woes began several years before this settlement, which resolved familiar allegations of off-label promotion and failure to report safety data. GSK paid over $500 million to resolve some 10,0000 Avandia lawsuits. The plaintiffs alleged this diabetes drug caused serious heart problems.
While these lawsuits were pending, two U.S. Senators demanded a full investigation. This investigation included the other drugs above but primarily focused on Avandia. Sens. Max Bacus (D-MT) and Charles Grassley (R-IA) claimed that Avandia caused 500 heart attacks a month.
Twelve people on a thirty-nine-member FDA panel voted to recall Avandia. The others voted to keep it on the market, albeit with restrictions. It was later revealed that one of the panelists who voted to keep Avandia on store shelves was a paid GSK speaker.
The FDA eventually imposed restrictions but lifted them a few years later, based largely on the results of a GSK-funded safety study.
Physician groups also backed Avandia’s safety. In 2010, the American Heart Association acknowledged that the safety issues “deserve serious consideration,” but that “patients should not change or stop medications without consulting their healthcare provider.”
The Avandia takeaway is clear. When faced with clear evidence of safety concerns, the FDA and industry groups usually do nothing. That’s because these groups primarily represent industry interests. Attorneys, on the other hand, represent victims.
There’s a good chance a dangerous drug is in your medicine cabinet right now. For a free consultation with an experienced defective pharmaceutical lawyer in Houston, contact Williams Hart & Boundas LLP.