Judge Reduces Takeda and Lilly Actos Verdict to $36.8 Million

November 3, 2014

A federal judge slashed the $9 billion jury verdict levied against Takeda and Eli Lilly to $36.8 million in a case that alleged the companies misled patients about cancer risks of the diabetes drug Actos. The 99-percent decrease didn’t surprise one legal expert who noted that the new damages could act as precedent for thousands of similar lawsuits.

Judge Rebecca Doherty delivered a scathing rebuke of the drugmakers’ conduct in a court filing Monday, and denied the drugmakers’ motion for a new trial. Doherty agreed with a jury that the companies engaged in a 12-year effort to hide Actos’ (pioglitazone) cancer risks from physicians and patients, even going so far as to destroy evidence.

Doherty, however, described as excessive the $9 billion damages awarded to diabetes patient Terrence Allen for acquiring bladder cancer after taking Actos. The initial award — $6 billion for Takeda and $3 billion for Lilly — wouldn’t meet federal punitive damage standards, she said.

The new damages — $27.6 million for Takeda and $9.2 million for Lilly — are enough to deter corporations from engaging in similar behavior, she said. While the $36.8 million alone might not be a lot, if other cases reached similar judgments, the cost to companies would be staggering, said Doherty, who heard the case in the U.S. District Court for the Western District of Louisiana.

Doherty also slightly reduced compensatory damages from $1.47 million to $1.27 million, 75 percent of which will be paid by Takeda and 25 percent by Lilly.

One expert wasn’t surprised that the verdict was reduced, noting that $9 billion in damages for a single case with one plaintiff is extremely large. “Constitutionally you can’t have these runaway verdicts,” Erik Gordon, a business professor at the University of Michigan, said.

However, awarding $36.8 million for a single case is still above the normal range of $10-$20 million for punitive damages, he added.

Gordon also noted that the damages could have a lasting impact on the remaining lawsuits. Currently there are roughly 3,500 cases in various federal courts and up to 5,000 cases in state courts. Lilly is not a party to all of the cases, as it only marketed the drug until 2006.

“Other judges aren’t bound to follow anything, but they all have something to hang their hats on,” he said. “Another judge will not be breaking new hazardous ground. Judges like to refer to precedents, and even things that aren’t really precedents.”

Takeda and Lilly showed no signs of backing down, both saying that no damages should be awarded and they will continue to appeal the verdict.

“There is no credible scientific evidence that establishes a causal link between Actos and this disease,” Takeda said. — Robert King

Originally appeared in Drug Industry Daily, the pharmaceutical industry’s number one source for regulatory news and information. Click here for more information.