Saturday, August 20, 2005

Michael: A Pill to Kill the Goose that Layed the Golden Eggs

With a quarter billion product liability judgement in the bag, and thousands of other equivalent Vioxx lawsuits pending you may be sure that it won't be long before Congress rides to the rescue of negligent drug manufacturers by offering them statutory protections from liability.

The GOP dominated federal government has already thrown several bones in the direction of the medical industry: so called 'tort reform' on medical malpractice litigation, immunity from liability for the drug industry on particular products, and moving mass class actions suits (which are most often product liability) to the federal courts. The prospect of bleeding out billions in equity and profits from the Vioxx cases, and other looming negligent drug marketing cases, is bound to send drug industry lobbyists scrambling to the Hill.

I'll even predict their likely rheotrical attack. Without legal protection against irresponsibly large jury awards, our drug companies will be forced to be overly cautious, or even fail to distribute some life-saving drugs, reducing the quality of Americans' health care and harming American drug manufacturers competitiveness in the world. If we don't cap non-economic damages in drug-related product liability suits, the entire industry will suffer irreparable harm. Oh, yes... and plaintiff's lawyers are scum.

It's all nonsense, of course. Our products liability system is the best means of encouraging self-regulation by industry. And effective self-regulation is the cheapest and most efficient means of regulating an industry. The FDA is too captured by the industry, especially in post-approval monitoring, and has proven quite extraordinarily ineffective at protecting consumers in this and other cases. Given the possible routes for politics to enter into any regulatory agency, this isn't really surprising.

If we allow our lawmakers to abrogate the consumers' last line of defense, active and zealous plaintiff's attorneys eager to champion the cause of those harmed by faulty products and negligent manufacturers, then the industry will have little incentive to rigorously police themselves to ensure that the public aren't harmed by their products. Harm to the public becomes just another cost of doing business. Without severe punitive damages available for willful negigence and malicousness, companies do not face the dire and strongly motivating prospect of being driven out of business by really bad decisions. In the interest of short-term profit, we will lose the excellence and accountability that make the American pharmacuetical industry a leader in the world and some of the most profitable business enterprises on earth.

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