Another Assault on Our Rights
In an abandonment of past precedent by the federal executive, the Bush administration has been petitioning courts to reject lawsuits by citizens who allege injury from prescription drugs and medical devices. The administration claims that companies should have a blanket exemption from injuries caused by drugs and devices that were approved by the FDA, claiming that such lawsuits would result in the withdrawal of useful products from the market.
This represents a wholesale retreat from the position the federal executive took before the U.S. Supreme Court in 1997 when it argued that approval by the FDA represents a minimum standard for a medical device. Now that floor has suddenly become a ceiling for the Bush administration, shielding manufacturers and drug companies from liability and depriving consumers of their rights of redress. The architect of the administration’s strategy, FDA general counsel Daniel Troy --surprise, surprise -- represented drug giant Pfizer while in private practice. The practical result is to slam the court house door shut on ordinary citizens injured by medical products.
Although few Americans are aware of their Seventh Amendment rights, the U.S. Supreme Court has broadly interpreted this basic component of our Bill of Rights. The Court established, for example, the right of “trial by jury in actions unheard of at common law, provided that the action involves rights and remedies of the sort traditionally enforced in an action at law, rather than in an action at equity or admiralty.” The Court has also applied the Amendment to causes of action created by statute: “The Seventh Amendment does apply to actions enforcing statutory rights, and requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law.”
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Lawrence Brooks Hughes - 7/27/2004
Drug companies are not going out of business only because shareholders expect their future to be better than their recent past. Pfizer and Lilly stocks are essentially at the same price as five years ago, which means investors have lost the use of money kept in them since 1999, plus the amount that money's value has lost from inflation, less token 2% dividends. Merck has fallen from $70-80 in 1999 to $45-50 today, a dismal record, with a current 3% dividend. Despite rising revenues, these industry giants have shown inadequate return on capital over this period. They do have very promising new products coming, however, and have been making enormous investments in them. Their sales and earnings are utterly transparent. The companies also furnish information on what the FDA approval process, clinical tests, etc., are costing. Most analysts consider those costs excessive. The massive investments in new drugs have not been warranted by earnings over the past five years, and these are not eleemosynary institutions. They must get higher profits to continue, as Congress recognized, fortunately, in the terms of the new Medicare entitlement law.
Jonathan Dresner - 7/27/2004
There are more than two options here, and the administration's attempt to solve the problem of medical safety by tort reform is like trying to solve the problem of osteoperosis with low railings: it's a symptom, not a cause.
Companies clearly are not going out of business under the current tort regime: they are developing and marketing new drugs, often using distorted research and shoddy safety controls. So malpractice payments are less than making things better. Tort reform (or tort removal, in the FDA case) in the direction that the administration has pushed will lower those costs further, making it likely that safety research spending will drop further.
Frankly, if we want safer drugs, and if the drug companies are such simple risk/reward calculators, we should be lowering the threshold for class action suits, forbidding gag rules in settlements, and raising FDA standards for approval even if it means raising costs for drug companies.
Lawrence Brooks Hughes - 7/26/2004
There has been a revolution in the practice of medicine over the past 30 years, and it seems to be accelerating. Most of the sick who used to languish in hospital beds day after day are now at home popping pills. The steady supply of new "wonder" drugs has been the eighth wonder of the world. It has been magnificent, and American capitalism has done it all--there was money in it for somebody with every pharmaceutical advance. Do we want that stream of new pills to keep coming, or shall we cut it off? Do we want the drug manufacturers to prosper, or the trial lawyers? Is it more important to reward the rare victim of pharmaceutical malpractice, or to maintain progress for the vast marjority of people who haven't any complaints with their pills and pill-makers? You have painted the situation as if there was only one side to the proposed legislation, when there are clearly two. Furthermore, under the status quo drug prices keep rising to unacceptable heights--largely paid by the government for old folks--while the trial lawyers take much of the money. Some change is obviously needed, but to assume the drug companies have limitless funds, or will continue investing to develop new drugs when the risk/reward ratio is adverse, is absurd.