A new study that compared the costs and benefits of accepting a settlement offer as opposed to going to trial, concluded that when you are suing and a deal is offered by the defendent, you should take the deal. That is the lesson from the biggest study ever undertaken on the impact of plaintiff decisions to accept a settlement instead of going to trial. Researchers found that most plaintiffs who pass up settlement offers to go to trial end up getting less money than if they had taken the settlement.

Are You Likely to Get an Offer?

Wyeth, the maker of Prempro, has already settled with two women who were plaintiffs in a lawsuit against Wyeth who they blamed for their breast cancer. Rather than allowing the court case to proc lawsuit eed, Wyeth offered a settlement of an undisclosed amount of money to each woman, and they accepted. Did they do the right thing? Would they have been better off taking their case to court?

The co-author of a new study, previewed in the NY Times (August 8, 2008), reviewed over 2000 lawsuits brought to civil courts between 2002 and 2005. In 61% of cases, plaintiffs who decided to pass up a settlement and go to trial, ended up with less money than if they had accepted the settlement offer. 15% of cases, both sides were right in going to trial in just 15% of cases.

Your Lawyer Might Think Otherwise

The author speculates that lawyers may not be explaining the odds of winning at trial adequately. Factors that influence plaintiff decisions to go to trial instead of settling include contingency fee arrangements. Lawyers, who like to gamble, may be willing to bet on a big fee from a trial rather than a more modest fee from a settlement.

The findings are consistent with what psychologists have found. People are more averse to taking risks when they expect to have something to lose, and more willing to take risks when they reasonably stand to gain something.

People considering a Prempro-related lawsuit may want to fully explore the issue of settlements with their attorney before any offer is on the table. That will give your attorney a chance to know your preferences and for him or her to explain his/her views on the subject to you. That way, both of you will be prepared and won’t feel ambushed by the other.

Need an Attorney?

Need an attorney to talk with about your concerns? Fill out a contact form on one of the pages on this website and we will pass it along to an experienced attorney who can help you think through your situation, gratis. To help you prepare for your conversation with an attorney, you may want to review Prempro On Trial and other articles on this site.

In mid-July, 2008, Wyeth settled lawsuits with two Nevada women who blamed their breast cancers on the company’s drug Prempro, which they took to relieve hot flashes and menopause symptoms. Vesta Woodhouse, 71, and Annie Woods, 61, are among millions of women who used Prempro as a hormone replacement therapy. Woodhouse took Prempro for 19 months before developing breast cancer. Woods took Premarin, Provera, and Prempo for about 5 years before developing breast cancer. Their lawsuits claimed that Wyeth failed to warn them about breast cancer risks. Wyeth settled with both women for an undisclosed amount.

Judge Rules Against Wyeth

New Jersey Superior Court judge, Bryan Garruto, in June 2008, issued a pre-trial rulng that a federal law does not bar state product liability lawsuits against drug makers. The ruling is the third by state and federal judges finding that lawsuits alleging drug companies did not adequately warn about a product’s dangers are not pre-empted by the US Food and Cosmetics Act. In other words, the law gives the 50 states, not the FDA pre-emption in matters pertaining to the safety of drugs.

The ruling allowed plaintiff Ellen Deutsch’s lawsuit to proceed. Deutsch, in her early 60s, took Prempro from 1996 to 2002 along with an older Wyeth menopause drug, Premarin. Deutsch alleges that the drugs caused her breast cancer. This is the first Prempro case to reach the courts in New Jersey, and was set to go to trial in July, 2008, the first of 250 trials pending in the state and one of 10,000 filed nationwide.

Wyeth Pays Big

In March 2008, Wyeth and Pfizer Inc. were ordered to pay an Arkansas woman $27.1 million in punitive damages. The Arkansas jury found that Wyeth’s Prempro and Pfizer’s Provera had caused the plaintiff to develop breast cancer, and further determined that the companies had shown reckless disregard for the health risks posed by their HRT drugs and should be punished. Wyeth’s share of the punitive damages came to $19.3 million.

Judge Reduces Jury Verdict

In February 2008, a district court judge in Nevada reduced a jury award against Wyeth from $134 million to $58 million. The damages included both compensatory and punitive damages based on the theory that the drugs Premarin and Prempro caused the plaintiff’s breast cancer. The judge was concerned that the amounts represented “the result of passion and prejudice.” The judgment was the largest award to date against Wyeth, which faces about 5,300 similar lawsuits across the country involving the drugs Premarin, an estrogen replacement, and Prempro, a combination of estrogen and progestin.

Summary Judgment for Wyeth

A judge in Minnesota dismissed a product liability lawsuit against Wyeth, granting the drugmaker’s motion for summary judgment in a case in which a woman blamed the company’s hormone replacement therapy for her breast cancer. In dismissing the case, which had been scheduled to go to trial in January 2008, Judge George McGunnigle of the Hennepin County District Court in Minneapolis found that the plaintiff, Patricia Zandi, had not offered any scientifically valid evidence to support her claim that she had developed breast cancer as a result of using Wyeth’s Premarin and Prempro.

Wyeth Loses Prempro Trial

A jury found that Prempro caused the plaintiff’s breast cancer and awarded Jennie Nelson and her husband $3 million, in a retrial of a Philadelphia HRT case. Wyeth indicated it would appeal.

In a prior Philadelphia trial, a jury also found in favor of the plaintiff, Jennie Nelson, but the judge threw out the verdict and declared a mistrial due to “extraneous circumstances” related to misconduct of a juror. The original jury awarded Nelson and her husband $1.5 million in compensatory damages. This time, Nelson was awarded $2.4 million and her husband $600,000, for a total of $3 million.

Mistrial in Prempro Case

In Jennie Nelson v. Wyeth Pharmaceuticals, the judge declared a mistrial and ordered a new trial, overturning a verdict against Wyeth. An attorney for the plaintiff stated that the mistrial was due to “extraneous circumstances,” but gave no details because the judge’s order was under seal.

The Nelson trial had been divided into two phases, with the first phase addressing causation and compensatory damages and the second liability and punitive damages. The jury concluded, at the end of phase one, that Prempro was the cause of the plaintiff’s breast cancer. The amount of compensatory damages awarded was $1 million for Nelson and $500,000 for her husband. The punitive damages phase was scheduled to begin the following day.

Texas Case Dismissed

A Texas judge dismissed a hormone replacement therapy case that was on the verge of going to trial, brought by a woman who claimed she developed breast cancer as a result of taking Prempro. The judge, Caroline E. Baker of Houston, said the woman couldn’t accuse Wyeth of failing to warn about risks associated with Prempro because drug labels are regulated by the U.S. Food and Drug Administration, according to a Wyeth statement. Wyeth lawyers have said the company did what the FDA told them to do.

Judge Denies Punitive Damages

In the Prempro trial of Mary Daniel v. Wyeth, the jury rendered a verdict for the plaintiff for $1.5 million in compensatory damages and found a basis to move to a punitive damages phase, but today the judge ruled, as a matter of law, that the evidence was insufficient to hold Wyeth liable for punitive damages. However, the judge apparently has decided to allow the jury to hear the evidence on punitive damages and to render a verdict — under seal — in case her ruling is reversed on appeal. The punitive damage award will not be made public unless an appeals court overturns the judge’s ruling.

Previously, a jury found that Wyeth failed to properly warn about the cancer risks associated with Prempro, and that the drug was responsible for plaintiff Mary Daniel’s breast cancer. It awarded Daniel and her husband $1.5 million in compensatory damages. The jury also found that Wyeth’s conduct was malicious or showed reckless indifference, a finding that under Pennsylvania law could send the jury back to determine additional punitive damages to be paid by the New Jersey-based company.

The jury was expected to return in a matter of days to decide punitive damages, finding Wyeth’s conduct to be “malicious, wanton, willful, oppressive or showing reckless indifference to the interest of others,” in failing to provide adequate warnings about Prempro and breast cancer risk.

States differ in drug liability standards and limitations. Arguments that are successful in some states, fall flat in others and in federal courts. For that reason, the first few Prempro liability cases have been closely watched by patients, physicians, lawyers, company officials, and stock analysts to see just how these early cases trend in state and federal courts.

So far, Wyeth has lost four out of seven cases brought against Prempro, the menopause drug used in the aborted Women’s Health Trial, since 2006 when Prempro lawsuits first began to be heard in state and federal courts. To date, these cases have been brought by women who developed breast cancer after taking Prempro for 17 months to 6 or more years.

FDA Tries to Carry A Bigger Stick

Prempro litigation began in earnest after an article appeared in the Journal of the American Medical Association (JAMA) in 2003, revealing increased risk of dementia and Alzheimer’s disease in women 65 years and older taking Prempro. Plaintiffs claimed that menopausal and postmenopausal women were being over-prescribed Prempro by their physicians and erroneously told to continue taking Prempro indefinitely, in the hope that the drug would protect the women against heart disease and osteoporosis, even though the drug was only approved for treatment of menopause symptoms. Inadequate Prempro labeling failed to fully alert women to the many dangerous side effects from taking the drug long-term.

Lawyers argued that it is the responsibility of the manufacturer to protect patients from harmful side effects and to warn of these on the label. But Wyeth, the maker of Prempro, had a shield against such arguments, or so they thought. The doctrine of “preemption,” Wyeth contended, absolved them from these burdens. Wyeth was referring to the FDA declaration that the agency possessed preemption power, an authority the agency had announced in the preamble of new rules for drug labeling the agency had issued on June 30, 2006. The preemption statement was an attempt to ban plaintiffs from filing lawsuits against a drug that the FDA had approved based on pre-market data.

Backdoor Preemption

While some courts have upheld the FDA’s preemption rights, others have not. Plaintiff attorneys say this was a backdoor attempt by the FDA at tort reform, giving the FDA new powers to trump state liability laws. But state courts have a legal right to police public health issues, and injured plaintiffs have a right to have their warning label claims heard by a jury, say attorneys for plaintiffs.

Unfortunately, the FDA didn’t monitor post-market adverse Prempro effects, at the time, and lawsuits were the only meaningful safety checks that remained to consumers. That is now remedied by the PDUFA of 2007, which goes into effect in 2009. The FDA’s role is parallel to, not in conflict with, the judiciary system. Further, the FDA statement in the preamble of a rule on drug labeling doesn’t have the force of law. The FDA did not go through the proper administrative rule-making procedures that are necessary for such an expansion of FDA authority. In the end, it is Congress that has the final legal authority to amend the functions and responsibilities of Executive agencies, not agency directors.

Both sides, in this legal standoff, believe it could come down to a decision by the US Supreme Court. Until the top court decides whether or not to rule on the matter, the action is in the appellate courts, and both sides are watching to see how things turn out there.

Defending Patients’ Rights

An extraordinary editorial in a July 2008 issue of the New England Journal of Medicine, written by the top editorial leadership of the journal, which is, arguably, one of the most prestigious publications in medicine, places medical science squarely on the side of the patient in the debate about preemption. The authors conclude that preemption will result in drugs and devices that are less safe and that will undermine national efforts to improve patient safety. Further, that approval of a new drug by the FDA is no guarantee of safety. Serious side effects come to light only after a drug is on the market for a while. But the FDA has no power to do anything about it, unlike other federal agencies, and is both beholden to and dependent on the manufacturers to reveal information about adverse patient experiences.

The editorial closed with a request that Congress put the matter of patient redress through the courts into law. As we move toward reform of the health care system, patient rights are going to be a flagship issue. Perhaps in the next administration, the FDA will resume a more balanced role as the arbitor of fairness in protecting both drugmakers and the public, rather than primarily a defender of corporations and the status quo.

Courts Reject Preemption

Perhaps the most significant event in the brief history of Prempro lawsuits was the news that Wyeth had settled lawsuits brought by two Nevada women who had taken Prempro and developed breast cancer, just before their trial was to start. In mid-July 2008, Wyeth avoided a trial by agreeing to settle with the two women, paying them an undisclosed dollar amount to resolve allegations that Wyeth had failed to adequately warn about breast cancer risks for women taking Prempro.

The Wyeth settlement comes on the heels of the US Supreme Court’s decision not to take up a case that would have determined whether FDA’s drug preemption authority supercedes state laws that allow plaintiffs to challenge a drug’s safety, efficacy or labeling. Drugmakers and the FDA argued that preemption exists as the FDA’s actions are considered the final word on drug safety and effectiveness. Earlier, a state judge in New Jersey, who is handling hundreds of Prempro lawsuits, ruled that a federal law does not bar state product liability lawsuits against drugmakers. This ruling is the third at the state level to find that a drug’s approval by the FDA does not protect drug companies from being sued. The FDA rulings are a floor, not a ceiling, and drug companies can always strengthen warnings and add new ones, the appellate Judge in the case ruled.

Wyeth Takes Stock

Now that the drug Industry’s preemption defense has been shot down by medical authorities and the courts, and the Supreme Court has decided not to get into the matter, Wyeth may have taken stock of what’s ahead and concluded that the courts may not be inclined to protect Wyeth’s bottom line. Meanwhile, Prempro lawsuits are clogging court calendars and continuing to draw media attention to women’s injuries from Prempro. Wyeth’s recent decision to settle two cases out of court may be a harbinger of what’s to come. Settling may be a way for the company to control costs and halt bad publicity from the tsunami of lawsuits waiting in the wings. We’ll keep you posted on this and other news on the patients rights and litigation front, so stay tuned!