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    Wednesday, November 20, 2019-3:05:46A.M.

     

     

     

     

     

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OPINION | An $8 billion drug heist

DRUG heists are common in many parts of Philadelphia, but usually they’re against the law. Last week a Philly jury held up Johnson & Johnson for $8 billion for failing to disclose side effects from an antipsychotic drug, and this heist happened in a courtroom.

More than 13,400 people have sued J&J for allegedly not adequately warning that Risperdal may cause gynecomastia or enlarged breasts. Hundreds of lawsuits have been dismissed after judges concluded the claims were pre-empted by federal drug label approvals, but plaintiff attorneys played the Philly case like a Stradivarius.

Plaintiff Nicholas Murray was diagnosed with an autism spectrum disorder as a child and was prescribed Risperdal in 2003. At the time the drug had been approved by the Food and Drug Administration to treat schizophrenia and autistic disorders in adults, and its label warned of increased risk of gynecomastia. In 2006 the FDA approved the drug for children.

Mr. Murray’s doctors and mother testified that the drug helped him. Yet in 2013 he sued J&J for marketing Risperdal for children to doctors without adequately disclosing the risks of gynecomastia. Neither of his doctors spoke with a company salesperson until after it had been approved for children. J& J also revised its drug label in 2006 to note that gynecomastia was reported in 2.3 percent of 1,885 children and adolescents treated with the drug in various clinical trials.

Nonetheless, a Philadelphia jury in 2015 awarded Mr. Murray $1.75 million in compensatory damages, which a judge later reduced to $680,000 while barring punitive damages. But a state appellate court overruled the judge and granted the plaintiff another trial with a new jury to seek punitive damages. J&J was not allowed to discuss with the jury evidence of its warnings in the second trial.

The Supreme Court has ruled that punitive damages may only be awarded if a company acts with malice. Mr. Murray’s attorneys presented no evidence in the first or second trial of intentional wrongdoing, but they asserted in court that J&J “chose billions over children” and “valued profits over safety.” The jury awarded Mr. Murray $8 billion — equal to about 10 percent of J& J’s annual revenue and nearly 12,000 times the compensatory damages. J& J plans to appeal and should get the award reduced since the Supreme Court said in State Farm v. Campbell (2003) that “few awards exceeding a single-digit ratio between punitive and compensatory damages will satisfy due process.”

But the plaintiff lawyers hope to force J&J to pay billions of dollars to settle thousands of claims, with the lawyers getting a 25 percent cut. The jackpot award will also attract more plaintiffs. The American Tort Reform Association finds in a new study that trial lawyers spent $422 million advertising legal services and soliciting claims on local broadcast TV during the first six months of this year. They spent $11 million on 73,000 ads in Philadelphia.

The Federal Trade Commission last month warned several plaintiff firms that their ads may make “deceptive or unsubstantiated claims” and have caused consumers who viewed the ads to discontinue their medications and suffer adverse consequences including death. The Risperdal lawsuits could do the same.

J&J is also under siege in opioid litigation though its fentanyl patches and crush-resistant pill make up less than 1 percent of opioid prescriptions. An Oklahoma judge in August ordered J&J to pay the state $572 million, much of which will go to plaintiff firms. The drugmaker is also fighting 14,200 lawsuits based on dubious science alleging that its talc powder has caused ovarian cancer and mesothelioma.

J&J’s balance sheet is strong enough to survive this assault, but patients will ultimately pay this trial-lawyer tab via higher prices or in fewer new treatments. All Americans should worry when an industry that follows the law can nonetheless be looted because it is politically unpopular.