Home > Property & Casualty > New trend sees large settlements from major drug developers

New trend sees large settlements from major drug developers

lawsuitEarlier this month, a Massachusetts court ordered one of the world’s largest manufacturers of pharmaceutical and medical devices to pay $63 million to a teenage girl and her family after a jury found the company liable for an inadequate warning label on one of its medications. The verdict stems from a 2003 case when she developed toxic epidermal necrolysis, a rare disorder resulting from dangerous side effects from the medication that left her blind and caused her to lose most of her skin, after taking the Children’s Motrin brand of ibuprofen for a fever.

Johnson & Johnson is the latest major drug developer facing patient lawsuits stemming from patients’ adverse reactions to medications. In January, Bristol-Myers Squibb Co. agreed to pay $80 million to the patients and families who were harmed during the company’s clinical trial of an experimental new pill for Hepatitis C. Bristol abruptly halted all development of the drug last August after one trial subject died and 15 others suffered heart and kidney damage during the trial. Plaintiffs in the case accused Bristol of neglecting to address certain health risks associated with the drug and say the company rushed through the clinical trials phase in order to compete in the rapidly growing market for treating Hepatitis C.

In early February, drug giant and Bristol competitor AbbVie, halted multiple clinical trials of ABT-199, an experimental BCL-2 drug the company was testing for treatment of chronic lymphocytic leukemia, after a patient death in the trial. Sources say the patient died after developing tumor lysis syndrome, a condition that results when the broken-up parts of dead cancer cells attack the liver and kidneys. While it’s not clear yet whether the death was directly related to the drug, the incident still adds to the list of clinical trials gone wrong for major drug developers.

Clinical Trials and Products Liability
Cases involving drugs and medical devices have increased significantly as more complex devices and more widespread use of drugs have been developed. This makes it even more crucial for drug developers or medical device manufacturers to proactively evaluate their programs and implement preventative procedures to minimize the risks to potential Products Liability. Another important note to keep in mind is that most standalone Product Liability policies have defense costs within the limit. Drug developers facing major lawsuits may wind up with huge legal fees that will eat up most of the policy limit. This is why it is also important to carefully evaluate Umbrella limits to address if your coverage is adequate.

For more information on Products Liability and Clinical Trial coverage, talk with WGA’s Life Sciences team or visit http://clinical-trials-insurance.com/

About the Author

Mindy Evanter is a Senior Vice President at William Gallagher Associates with over 25 years of experience, specializing in designing risk management and insurance programs for life sciences companies.

617.646.0244 | Mevanter@wgains.com | Connect with Mindy on LinkedIn

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