Justinian Lane

Americans Can’t Afford a Preemption Premium

This term, the Supreme Court will decide Wyeth v. Levine, a case that may virtually eliminate the right of a citizen injured by a prescription drug to sue the drug's manufacturer.  The case turns on whether FDA approval preempts failure to warn lawsuits.  In addition to the public health arguments against preemption, there is also a financial argument against preemption. 

When Merck finally recalled Vioxx, the FDA estimated that the drug had caused 27,000 heart attacks.  (One FDA insider estimated that figure to be as high as 139,000.)  A Harvard study estimated the lifetime cost of treating a heart attack to be $114,000.  That would put the medical costs alone from Vioxx-caused heart attacks at between $3 billion and $15 billion dollars.  Who paid those costs? 

Since Vioxx wasn't an inexpensive drug, it's a reasonable assumption that most people who suffered heart attacks while taking Vioxx had private insurance, Medicare/Medicaid, or both.  So both private insurers and the taxpayers paid the lion's share of the Vioxx-caused heart attacks.  Under the current system, anyone who receives a settlement over a defective drug usually must repay their insurer or Medicare/Medicaid at least a portion of the medical costs the insurer paid.  Some states are especially vigilant about policing settlements and ensuring that Medicaid gets repaid.

If the Supreme Court finds in favor of Wyeth, there won't be anymore settlements over defective drugs.  Private health insurers and taxpayer-funded insurers will have to pay 100% of the costs of treating the insured victims of the next Vioxx.  The consequence is predictable: insurers will have to raise their rates, and taxpayers will have to pay more to keep Medicare/Medicaid solvent.  Those of us who are insured will have to pay a preemption premium to keep our policies, and the millions of Americans who aren't insured will find it even more difficult to afford health insurance.  Oh - let's not forget about our already-overburdened Social Security system.  Some people never recover from heart attacks and end up receiving taxpayer-funded Social Security disability benefits.  And of course, those people without insurance will most likely be unable to pay for their medical bills, forcing medical providers to raise the cost of services to the rest of us.  Worse still, many injured citizens will be forced to file bankruptcy, thus forcing innocent creditors to bear part of the burden of prescription drug injuries.  Clearly, preemption is great for the pharmaceuticals, but costly to the rest of us.

Most of us believe the old saying "You break it, you buy it," is fair.  So isn't it also fair to make the manufacturer of a defective drug pay for the medical bills of the individuals injured by that drug? 

Justinian Lane: Author Bio | Other Posts
Posted at 12:56 PM, Jun 16, 2008 in Preemption
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Vioxx wasn't defective under any reasonable legal definition of "defective."

Posted by: Ted | June 16, 2008 3:30 PM

Setting aside whether Vioxx was legally "defective" is the issue of whether it caused heart attacks. If it caused even a single heart attack, shouldn't Merck have to pay the cost of that heart attack? If not, why not?

Posted by: Justinian Lane | June 16, 2008 3:38 PM

If I get a hangover from drinking beer, should Guinness pay the cost of my headache?

If I'm one of the 100,000 people a year who are hospitalized taking aspirin or ibuprofen instead of Vioxx (over 16,000 of whom die), who should pay the cost? This is why your math is wrong, incidentally: all painkillers have side-effects.

Posted by: Ted | June 16, 2008 3:57 PM

Posted by: Ted | June 16, 2008 3:58 PM

Bad analogy. A hangover won't cost $100k+ to treat.

As for the aspirin? Why shouldn't Bayer foot those bills instead of taxpayers?

I just posted about that link, actually.

Posted by: Justinian Lane | June 16, 2008 4:04 PM

The issues in the Lane arguement are valid, what I fear that the discussion misses, is the fraud and deception that Merck practiced and will this dicision shield that. If victims of Vioxx where givin the same facts that Merck had, and dicided the benifits outwiegh the risks, then no foul, but that is not what happened. No reasonable person questions that drugs have different risks and benifits, and that to a large extent that is individual, but Merck hired phantom writers and ommited relavent data and information, so suggesting that vioxx and asprin are similar is a real stretch, Makes me think Ted was an executive at Merck. Why shouldn't Merck do the same thing again, after all they kept selling the drug with out the proper warnings for a long time, and their costs to settle claims is far less than the extra money they made, and after all isn't the share holder (Ted)the most important person in the universe.

Posted by: Ed | June 16, 2008 4:35 PM

Re: the preemption tax, I think Justinian's good piece only begins to suggest what the cost will be. When the next Vioxx (or whatever) happens - and it happens in the dark - the cost in public trust in both FDA and industry will be catastrophic, possibly irreparable. If anyone thinks regulation is Draconian now, it will look like the Wild West compared to what will follow. And what remains of a great, productive industry - profit-making for itself and for many (rightfully and fruitfully) - will be in tatters.

Whatever the short-term gleam in people's eyes, preemption for pharma is financial self-destruction. That means a public health disaster as well.

The industry understood this when it backed off reversing Kefauver-Harris in the mid-90s. It does not look like it knows it now.

It, and all of us, will pay indeed.

Posted by: Henry Greenspan | June 16, 2008 5:49 PM

Agreed, the facts were hidden about Vioxx by Merck and phantom or ghost written articles were put in publications by paid Merck "yes" boys like Ted. This was to help the FDA fast track the drug to market to insure profits without adequate long term test results. Profits before patient safety, then when the FDA required them to put a black box on the medication the corelation between Vioxx and aspirin were introduced, a real stretch! A COX2 inhibitor and aspirin on the same level? I dont think so... They just flat out got greedy and didnt worry about the side effects and dangers that happen when patients took this drug. They should be held Responsible and liable for their actions and misrpresentation about their little money maker Vioxx.

Posted by: oreo | June 17, 2008 2:01 PM

How does the benefit (taking the edge off the pain) compare with the risk (any ischemic event). It's not merely heart attacks and strokes, blood clotting causes many problems. I have a young active friend (28 at the time) who developed DVT (Deep Vein Thrombosis) while she was on Vioxx. Coincidence?
And TED for crying out loud, that WSJ letter to the editor looks to be so contrived it was probably written by a Merck employee. Do you believe EVERYthing you read?

Posted by: Davie | June 17, 2008 4:19 PM

I took Vioxx. I have taken stronger drugs for arthritis; e.g., methotrexate, butazolidine (since banned), sulfasalazine, and others). My doctors warned me on each drug and told me I had to take monthly blood tests. With MTX I had to have liver biopsies. Vioxx had no warnings and lots of pro-active marketing that it was very safe. Within six weeks of starting Vioxx I had visual migraines. From there on it was downhill for the next 15 months until I had my second mini-stroke and a TIA.
Merck lied. The FDA was asleep. I now have to take more drugs to counter the migraines and the risks of mini-strokes. Of course, I pay for these drugs through my health care premia and through my copays. Merck pays nothing. That's only fair; that's American medicine.

Posted by: William Aldrich | June 27, 2008 5:26 PM

Oreo's facts are wrong: the FDA never required a black-box warning on Vioxx.

Davie, the benefits are that Vioxx avoids the side-effects of aspirin and other pain-relievers that kill thousands of people a year. All pain-relievers have side effects.

Vioxx doesn't cause "visual migraines." Aldrich appears to be blaming his underlying health-problems on an unrelated drug. It's certainly not true that "Vioxx had no warnings." His complaint, if any, is with his doctors.

Greenspan's argument appears to be that we should have litigation results now that are bad public policy to prevent regulation results in the future that are worse public policy. A better solution would be to have a good public policy in both litigation and regulation, and not kow-tow to the trial lawyers, who care only about their own profits, and not public safety. Greenspan's too smart not to know about the problems of hindsight bias.

Posted by: Ted | June 29, 2008 10:31 AM


I had eye surgery ands in the post-op pack was MAXIDEX(dexamethasone) drops by ALCON LABS.

Two days later I was BLIND

Use Google and enter EPOCRATES MAXIDEX REACTION to verify

Posted by: WEL | November 4, 2008 4:17 PM