Craig Newmark calls our attention to this Washington Post article about lawsuits on drug companies (specifically Merck and their Vioxx drug):
Co., the makers of the painkiller Vioxx. Mr. Humeston wants compensation for the heart attack he suffered in 2001, two months after he began to take Vioxx. The facts of the case would seem to give Mr. Humeston little chance. Not only do studies of Vioxx show that the risk of heart attack is linked to use over a much longer term, but Mr. Humeston was, like many other middle-aged men, at risk of a heart attack for other reasons, too.
Unfortunately for Merck, scientific facts didn't play much of a role in the first Vioxx trial, which ended on Aug. 19. The Texas jury in that case awarded $253.4 million to the widow of a man who died of a heart attack triggered by arrhythmia, which is not a condition Vioxx has been proven to cause. The jury, declaring that it wished to "send a message" to Merck, decided to make an enormous symbolic award anyway. Besides, said one juror afterward, the medical evidence was confusing: "We didn't know what the heck they were talking about." Because Texas law limits the size of jury awards, the final cost to Merck is likely to be closer to $2 million. But the precedent set by the jury is ominous. Merck is facing about 5,000 similar lawsuits. If every one of those costs the company $2 million, the total price will come to $10 billion -- if, of course, a company called Merck is still around to pay it.
Politicians and regulators should be asking themselves whether a system of massive cash awards to people who may or may not have been adversely affected by Vioxx is a logical, fair or efficient way to run a drug regulatory system. They should also be asking whether juries that scorn medical evidence are the right judges of what information should or should not have been on a prescription label. After all, Vioxx was produced and sold legally. The drug was approved by the Food and Drug Administration, and its label did warn of coronary side effects. It is possible, even probable, that Merck was negligent in its decision to ignore early warnings of the cardiovascular risks of Vioxx. But the company has already paid a price for that negligence, in the losses it has suffered after abruptly taking Vioxx off the market. Fair compensation for the injured needn't entail disproportionate financial punishment as well.
In the long term, using the courts to "send a message" to Merck isn't going to help consumers. If the result is an even more cautious FDA approval system and a more cautious pharmaceutical industry, that will keep innovative drugs off the market for much longer. More people will die waiting for new treatments. The cost of producing new drugs will rise dramatically. Already, there are whole areas of medicine -- women's health during pregnancy, for example -- that are made so risky by liability issues that companies may stop doing research in them.
Nobody wants to have shoddy medicines on the market. But the answer isn't the rigorous public involvement in the drug development that we see today. Private people interacting in markets can and do hold companies that sell crappy stuff liable - not in the legal sense but in the sense that they will think twice when buying from that company again. In addition, recall that last year's flu vaccine shortage in the US was largely due to too much public involvement in the market for flu vaccines.