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?