Takeda, Eli Lilly found liable by jury in Actos claims

Verdict calls upon the companies to pay $9 billion in damages over bladder cancer possibly related to Actos use

Lloyd Dunlap
WESTERN DISTRICT, La.—A U.S. jury has ordered Takeda Pharmaceutical Co. Ltd. and Eli Lilly and Co. to pay a combined $9 billion in punitive damages after finding that the companies concealed the cancer risks associated with the diabetes therapy Actos (pioglitazone). The jury also awarded compensatory damages to the plaintiff of nearly $1.5 million in the first federal lawsuit related to the drug to go to trial.
 
The jury ordered Takeda to pay punitive damages of $6 billion, with the remaining $3 billion to be paid by Eli Lilly, its U.S. marketing partner on Actos between 1999 and 2006. The plaintiff alleged that he developed bladder cancer after taking Actos for more than five years, claiming that Takeda executives ignored or downplayed concerns about the drug’s link with cancer and misled regulators about its risks. Jurors found Takeda and Eli Lilly “failed to adequately warn” about Actos’ bladder-cancer risks, while company executives “acted with wanton and reckless disregard” for patients’ safety in their handling of the drug.
 
Complicating the case for the defense was presentation by the plaintiff’s lawyers of “evidence spoliation.” Diane Lifton, co-chair of Hughes Hubbard & Reed LLP’s Life Sciences and Product Liability Groups, who has been following the litigation, noted that despite the blockbuster size of the jury’s verdict, the plaintiffs could encounter significant hurdles in post-trial litigation and subsequent Actos suits. Lifton has represented a broad spectrum of product manufacturers in the trial of high-stakes pharmaceutical, medical device and toxic tort product liability and commercial litigations. She has extensive experience developing medical and scientific experts—and successfully challenging the opponent’s experts—in a wide range of fields, including oncology, pathology and U.S. Food and Drug Administration (FDA) regulations.
 
Lifton pointed to two major factors at trial that acted as a one-two punch against the drug companies: First, the impact of the judge’s instruction on destruction of documents. Earlier this year, U.S. District Judge Rebecca Doherty ruled against the defendants on a key evidence spoliation issue concerning dozens of missing email and paper files that addressed issues of Actos’ safety. The jury was allowed to hear claims that defendants intentionally destroyed these files, evidence which plaintiffs’ attorneys argued would have been beneficial to their case.
 
“In trials where evidence spoliation such as this is put before a jury, it creates a pall that soon takes front-and-center and puts the defense at a disadvantage in front of jurors,” said Lifton. “Such fallout has an unfortunate side effect: The jury’s attention is now shifted to look more at the defendants’ conduct in handling evidence, rather than the weaknesses in the evidence itself and the totality of the plaintiffs’ evidentiary offering—the merits of their case.”
 
Lifton also maintained that the plaintiffs were able to put unreliable scientific evidence before the jury, allowing plaintiffs to make their case with theories that many in the defense bar take issue with. She pointed out that the Actos drug is prescribed in the type 2 diabetic patient population, a group that already has an increased risk of bladder cancer, given the nature of the disease and its own complications. Lifton also pointed out that plaintiffs relied in part on animal studies, which do not necessarily correlate to effects in humans.
 
“There remains much to question about the science advocated here by plaintiffs’ experts, and, on appeal, whether much of plaintiffs’ evidence had been properly admitted,” said Lifton. “Should this science have been presented to a jury when it is clear that there are major issues with it? The answer, without question, is ‘no’.”
 
In response to the decision, Kenneth D. Greisman, general counsel for Takeda, said the drugmaker “respectfully disagrees with the verdict and … intend[s] to vigorously challenge this outcome through all available legal means, including possible post-trial motions and an appeal.”
 
In its response, Lilly posted the following statement on its website: “[I]n response to the verdict in the case of Terrence Allen, et al. v. Takeda Pharmaceuticals North America, Inc., et al. No. 6:12-cv-00064. The jury found in favor of the plaintiffs and awarded $1.475 million in compensatory damages. The allocation of liability was 75 percent Takeda and 25 percent Lilly. The jury also awarded $6 billion in punitive damages from Takeda and $3 billion from co-defendant, Lilly.”
“While we have empathy for the plaintiff, we believe the evidence did not support his claims,” said Mike Harrington, senior vice president and general counsel for Lilly. “Lilly disagrees with the verdict and we intend to vigorously challenge this outcome through all available legal means.”
 
Judgments were entered in Takeda’s favor in all previous Actos trials. Lilly was not named previously. This is the first federal case to be tried and the first in the consolidated Actos multidistrict litigation. Lilly co-promoted Actos with Takeda from 1999 to 2006.
 
Under Lilly’s agreement with Takeda, Lilly will be indemnified by Takeda for its losses and expenses with respect to the U.S. litigation and other related expenses in accordance with the terms of its indemnification agreement.
 
The trial began Feb. 3 in the U.S. District Court for the Western District of Louisiana, where more than 2,700 Actos suits have been consolidated for pre-trial information exchanges. In three previous Actos trials, judgments have been entered in Takeda’s favor, with state jurors in Las Vegas most recently rejecting claims the company failed to properly warn consumers about the risks of the therapy.
 
In 2012, study results suggested that Actos is associated with an increased risk of bladder cancer, although the absolute risk remains low. The findings followed safety reviews of the drug by both the FDA and European Medicines Agency, with the regulators issuing warnings about a potential increased risk of bladder cancer associated with the treatment. Regulators in France and Germany had previously suspended use of Actos.
 
Takeda, which said it will appeal the Louisiana verdict, has prevailed in the other cases that went to trial. Most recently, a jury in Illinois found it wasn’t responsible for the death of a man who took the drug.
 
Last year, state juries in California and Maryland ordered Takeda to pay a total of $8.2 million in damages to former Actos users. Judges in both states threw out the verdicts. In December, jurors in Las Vegas rejected claims the company failed to properly warn consumers about the risks of Actos.
 
Actos sales peaked in the year ended March 2011 at $4.5 billion and accounted for 27 percent of Takeda’s revenue at the time, according to data compiled by Bloomberg. Actos has generated more than $16 billion in sales since its 1999 release, according to court filings. Takeda now faces generic competition from Ranbaxy Laboratories Ltd.

Lloyd Dunlap

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