Read, and write a 1-page reaction on a single topic 400 WORD or more WITH YOUR o
ID: 387408 • Letter: R
Question
Read, and write a 1-page reaction on a single topic 400 WORD or more
WITH YOUR opinion about the topic -Which you choose and whether you support or reject the idea
you should use this word : I will discuss the ....... because I believe it is ......... > I also agree or desagree with the book that ........
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. Laws of Liability
This chapter discusses the introduction of the painkiller Vioxx by Merck and the introduction of an alternative hip replacement by Johnson & Johnson (J&J). Both companies had impeccable reputations, but they did not handle these products’ dangers to patients well. These cases led to large liabilities that were avoidable had the two firms taken the early warnings seriously. The chapter concludes with a primer on liability law. Liability law is meant to compensate victims for the harm companies cause in introducing new technologies and to deter companies from irresponsibly putting innocent people at risk by not warning them of foreseeable dangers. Vioxx: What Went Wrong? On September 30, 2004, Merck had to pull its $2.5 billion blockbuster painkiller drug, Vioxx, from the market.1 Vioxx was a prescription COX-2 selective, nonsteroidal anti-inflammatory drug (NSAID) prescribed for osteoarthritis, acute pain in adults, and menstrual symptoms. The discovery that the drug could cause heart damage to humans was a severe blow to the pharmaceutical company. Merck clearly did not want to take it off the market because the drug represented 10 percent of its 2003 revenue. Margins were high, and years of research and millions of dollars had gone into the research and development (R&D) that had brought the drug to the market. Once FDA approved, Merck was able to advertise and sell Vioxx as a painkiller. Despite Merck’s positive reputation and its search for a blockbuster drug like Vioxx without gastrointestinal complications, it ignored early warnings and vigorously marketed the drug without being certain of its full safety. It failed to communicate the risks to patients, and after the FDA required that it make the risks known, it withheld evidence that showed the connection between Vioxx and coronary diseases. After more criticism, Merck finally recalled the drug voluntarily but faced thousands of suits for liability. In the end, it even faced criminal charges. Merck’s Positive Reputation That the Vioxx incident happened at Merck came as a surprise. It is an indication of what can happen at any company, no matter how strong or positive its reputation. Merck manufactures, develops, discovers, and markets many medicines in various therapeutic categories. The company’s values, published on its website, include the following: We are responsible to our customers, to Merck employees, to the environments we inhabit, and to the societies we serve worldwide.2 To work for Merck, employees must sign and accept this statement. The company
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has a charitable organization that brings medicine to people in underprivileged areas. It has been named one of Fortune 500’s top companies several times. The Search for a Blockbuster Drug Without Gastrointestinal Complications Merck needed a blockbuster drug to compensate for other drugs that were about to lose patent protection and because so many of its drug development efforts had not been productive. The company began studying COX-2 drugs in the 1980s, hoping to discover a painkiller without gastrointestinal complications. Painkillers, such as Vioxx, and over-the-counter anti-inflammatory drugs, like Advil and Naproxen, are used to relieve many kinds of pain from backaches to osteoarthritis. The company’s studies of COX-2 drugs suggested that they produced the same benefits as other pain relievers without the negative gastrointestinal effects. Vioxx, which was put through several rounds of tests, looked to be of great potential for pain relief without the risk of ulcers. Early Warnings Although the FDA sensed early on that Vioxx caused cardiovascular problems based on some of the clinical studies, removing the product from the market was difficult. Nearly 25 million Americans had taken the drug when Merck recalled it. However, as far back as 1984, Garret Fitzgerald at the University of Pennsylvania, in work published in The New England Journal of Medicine, showed that the COX enzyme in Vioxx, by preventing arterial blood clot formation, could harm people with damaged blood vessels. Merck understood these concerns, but in the studies leading up to Vioxx’s FDA approval, it excluded patients with a history of cardiovascular disease. After 10 years of effort, the FDA approved Vioxx for sale in 1999. In its first year on the market, Merck spent over $160 million, more than any other drug company that year, on advertising and promoting the drug’s benefits, and in its first seven months on the market, doctors wrote five million prescriptions for Vioxx. However, in 2000, Merck’s research chief, Ed Scolnick, continued to warn of the cardiovascular complications. A study, designed to demonstrate Vioxx’s gastrointestinal benefits, was ongoing. Among the subjects of this study, unlike previous Merck studies, 4 percent had a history of prior cardiovascular disease. The Vioxx users in the study had two to five times the rate of cardiovascular problems of subjects who used the generic drug Naproxen.
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Failure to Communicate Although Merck knew of the problem, it did not communicate Vioxx’s ill effects in its marketing material. It reasoned that the study had been done without a placebo. Therefore, it was impossible to know whether Vioxx caused the negative results or they showed up because Naproxen had cardiovascular benefits. However, in 2001, another study appeared that cast additional doubt on Vioxx. The Cleveland Clinic’s Dr. Eric Topol published a study in The Journal of the American Medical Association that showed increased rates of heart attacks and strokes connected to Vioxx. The information that something could be wrong with Vioxx started to leak to the public. A Merck employee provided The Wall Street Journal with internal emails. In one, a Merck employee said that the company excluded all heart patients from its Vioxx studies so that cardiovascular problems would not surface. In another, a different Merck employee discussed how the company designed its studies to minimize unflattering comparisons with other drugs. This email acknowledged it would have been hard to hide the unfavorable comparisons. The FDA’s Required Warning The FDA responded to the controversy. An advisory panel recommended that the agency require Merck to put a warning label on Vioxx. The agency told Merck to stop misleading doctors about the cardiovascular effects of Vioxx. In a letter to Merck, the FDA accused the company of minimizing the cardiovascular findings and misrepresenting Vioxx’s safety in its marketing of the drug. The requirement that Merck put a warning label on Vioxx, however, was delayed until 2002. Under pressure from Merck, the label provided information about Vioxx’s benefits first. The potential heart and stroke problems were only mentioned much later in the warning. Merck, alarmed, canceled a planned 2002 study to test whether patients with acute coronary syndrome who were given an antiinflammatory drug like Vioxx would benefit. It did not want to carry out Vioxxrelated studies that involved subjects with coronary disease. In 2003, it suspended a study it initiated to determine if Vioxx could be used for the prevention and treatment of colon polyps and colorectal and prostate cancer because initial results of the study showed a high rate of cardiovascular deaths.
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More Criticism Vioxx was the blockbuster Merck needed. The drug brought in $2.5 billion in revenue in 2003. One billion dollars of this revenue came from Medicaid. However, Medicaid advocates started to criticize Merck. They wondered what outcomes patients with cardiovascular disease were getting from Vioxx. In addition, The Lancet, a British medical journal, published a study in 2004 based on data from 25,000 patients and 18 clinical studies that showed that patients taking Vioxx exhibited 2.3 times the cardiovascular risks of patients taking competitor drugs or placebos.3 The FDA, too, released the results of an incomplete study. David Graham carried out an epidemiological study for the FDA and made public his unpublished data.4 His claim was that using pain relievers other than Vioxx would have prevented 27,000 heart attacks and sudden cardiac deaths in the United States. Publicly, Merck stood behind the efficacy and safety of Vioxx. However, employees leaked other documents to The Wall Street Journal. One in particular caught people’s attention. It was called the “Vioxx Dodge Ball” and instructed sales representatives not to directly answer questions that physicians posed about Vioxx’s safety. Voluntary Recall In the fall of 2004, Merck decided to act. Before the FDA could force a recall, the company voluntarily recalled the painkiller. The company’s CEO made the announcement. Merck maintained that it only knew of the full extent of the danger after the publication of the article in The Lancet and that as soon as it made the discovery, it initiated its recall. Merck also maintained that the FDA had permitted it to continue marketing Vioxx with a warning label, but that it was taking the responsible route and withdrawing the drug voluntarily. After Merck took this step, its stock price fell drastically. However, over time it recovered, and Merck did not suffer lasting financial damage. In the fall 2004, Senator Charles Grassley started a congressional investigation of Vioxx. He maintained that Merck was not the only blameworthy organization, but that the FDA had to accept some of the responsibility as well because it knew of the questionable results long before it acted. The FDA countered that drugs like Vioxx often appear to be safe at first and are only proven unsafe later on, after many additional studies. At the hearings, Grassley questioned the FDA’s independence. He revealed potential conflict of interest in that 10 out of 32 of the expert committee members chosen by the FDA to evaluate Vioxx had ties to the industry, had consulted for Merck, or owned stock in other pharmaceutical companies.
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Thousands of Suits Starting in 2005, lawyers started to file thousands of lawsuits against Merck on behalf of plaintiffs who claimed injury. In some of the cases, perfectly healthy people who did not have a history of weight problems, did not smoke, and had no past heart disease problems died from heart attack or stroke after taking Vioxx for nine months or more. Merck’s legal liabilities were estimated to exceed $18 billion in 2005. Physicians leveled charges against Merck for spending millions of dollars on advertising. They felt pressured into prescribing Vioxx when ordinary over-thecounter drugs like Advil and Ibuprofen would have been safer, cheaper, and just as effective. An Archives of Internal Medicine study showed that nearly threequarters of the people who took Vioxx did so unnecessarily. They could have relied on simpler over-the-counter medication. In 2007, Merck agreed to pay $4.85 billion to settle 27,000 lawsuits and signed a corporate integrity agreement promising to monitor its future promotional activity and report back to the government regularly. Criminal Charges In 2011, Merck pleaded guilty to a criminal charge of selling Vioxx and agreed to pay $950 million in fines to the Department of Justice. Tony West, assistant attorney general of the Justice department’s civil division, made the claim that Merck had subverted FDA rules that were meant to keep medicines safe and that it had undermined the ability of healthcare providers to make good decisions on behalf of their patients. Johnson & Johnson’s Hip Replacement: What Went Wrong? Merck was not the only example of a company with a positive reputation that put patients at risk with a technological innovation. Johnson & Johnson (J&J), the world’s largest seller of healthcare products, had created such brands as Band-Aid, Tylenol, Listerine, Lubriderm, Rogaine, Bengay, and Baby Powder. However, by the end of the first decade of the 21st century, it faced numerous lawsuits over an apparently innovative hip replacement technology that had injured thousands.5 J&J had consumer healthcare, medical device and diagnostic, and pharmaceutical divisions and 250 subsidiaries, including three that were of particular interest regarding health and safety issues in this time period: DePuy, Ethicon, and McNeill. DePuy made hip implants that left patients with metal poisoning and other complications, Ethicon made transvaginal mesh implants that led to serious complications and required multiple revision surgeries, and McNeill had serious product quality issues. Because of lawsuits stemming from these problems, J&J, like Merck, had to pay billions of dollars in damages. What went wrong in the DePuy case with a company that had been viewed as a paragon of social responsibility was acquisition of this subsidiary, infatuation with a new technology,
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failure to warn patients of design problems with a technology, an FDA investigation, voluntary recall, suits, and massive reimbursement to patients who had been harmed. A Paragon of Social Responsibility Johnson & Johnson’s credo stated that its first responsibility was to doctors, nurses, patients, children, mothers, and families who used its products and services.6 Its next responsibility was to employees, communities, the environment, and natural resources. Stockholders were its last responsibility, and it claimed that it only owed them a fair return of their investment. In 1982, J&J showed that it lived up to the principles in its credo when, despite concerns about the shareholder reaction, it initiated a rapid recall of 31 million bottles of Tylenol after seven people died from ingesting cyanide-laced pills.7 However, the same J&J that recalled Tylenol in 1982 was forced against its will to withdraw 288 million items from the market, including liquid Tylenol, Motrin, Zyrtec, and Benadryl, because of quality-control problems at J&J plants in Pennsylvania and Puerto Rico in the 21st century. J&J again had to withdraw 500,000 bottles of infant Tylenol in 2012 reluctantly and against its will. The Acquisition of DePuy The most outstanding example of the problems that J&J faced relate to the hip implants sold by its DePuy subsidiary. J&J acquired DePuy, a commercial orthopedic manufacturer and device maker, in 1998. In 2010, this subsidiary of the company was the world’s top manufacturer of hip replacements. With the Pinnacle Hip Replacement System, which was introduced in 2000, the Articular Surface Replacement (ASR) system that DePuy sold internationally in 2003, and the ASR XL Acetabular System that DePuy sold both internationally and in the United States in 2005, DePuy was a pioneer and technological leader in introducing a metal-onmetal design in hip replacement.
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All-Metal Replacements Orthopedic surgeons believed that all-metal replacement hips like DePuy’s ASR system would last longer than traditional replacement devices made of plastic and metal. By 2010 DePuy’s Pinnacle systems had been installed in as many as 40,000 U.S. patients, and up to 37,000 U.S. patients used its ASR products. Outside the United States, another 56,000 patients relied on Pinnacle systems and ASR products. Starting in 2003, DePuy sold the products outside the United States as an alternative to a replacement procedure called resurfacing. Two years later, the company adopted the resurfacing component for standard hip replacements in the United States. The problem was that the metal ball and cup components in these products often rubbed together, causing friction and releasing metal debris and particles into the user’s bloodstream, which in turn caused tissue damage and crippling injuries. The implants also often loosened, and patients suffered joint dislocation that required additional surgeries. Design Problems These design problems came to light in Australia and England shortly after the first sales were made in those countries. According to internal DePuy documents revealed at subsequent trials, a consultant to the company warned the head of DePuy’s orthopedic unit, Andrew Ekdahl, who oversaw the hip’s introduction, that there was a serious design flaw with the implants. However, for years DePuy insisted to surgeons who complained when the device failed that their implanting techniques, not the device itself, were responsible. FDA Investigations The all-metal system was once highly popular with surgeons, but by 2011 the metal devices were rarely used because of high failure rates. After reports of complications from consumers and physicians, the FDA was about to take action, and J&J agreed to a recall. This technology had been designed to improve the quality of life of thousands of patients, but instead it left many of them with serious permanent injuries. Because of the many problems patients encountered, the FDA investigated the ASR and Pinnacle devices. The FDA told DePuy that it would reject its approval of resurfacing technology in the United States because of the high concentrations of metal ions that were reported to have been released in European patients’ bodies. When the FDA asked DePuy for more safety data, the company panicked. It decided it would have to phase out of the ASR, but it first chose to sell its inventories of the devices without telling physicians or patients about the problems. In the foreign countries in which it continued to sell this technology, J&J did not reveal the FDA’s regulatory decision.
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A Voluntary Recall In 2010 the company discontinued the Pinnacle line of implants and decided to voluntarily recall all hip replacements. Its claim was that it acted as soon as it had definitive information on the dangers and that it voluntarily recalled the product immediately after obtaining data from the National Joint Registry of England and Wales that showed the devices were failing prematurely and at a higher rate than competing implants. It also promised to pay the medical costs of replacement procedures. However, during patient lawsuits, another picture emerged of what J&J knew, when it discovered this information, and what it did with it. Internal company documents showed that DePuy officials knew long before the recall that the product’s design was flawed and that it failed at prematurely high rates. In testimony, a DePuy engineer admitted that by 2008 company officials were fully aware of reports by an English surgeon that found that the resurfacing version of the ASR technology released high levels of metallic ions, especially in female patients. At that time, company officials understood that the product was defective and that it would have to be redesigned. Orthopedic databases to which the company subscribed showed that most artificial hips had a lifetime of 15 years or more before they had to be replaced. However, by 2008, these databases showed that ASR metal systems failed patients at high rates after just a few years. Indeed, internal DePuy documents brought to light by lawyers during trials against the company estimated a 40-percent failure rate for most patients in five years, a rate that was eight times higher than for other hip devices. Suits Against the Company Because DePuy had not warned its patients of these risks, the company confronted as many as 12,000 legal claims against it in the United States alone. The estimate was that in two-thirds of these cases patients would have to have additional surgeries to remove and replace their original implants. In addition to those who had already undergone painful and costly procedures to replace their implants, the projections were that thousands more would have their hip replacements fail in coming years. Based on the number of patients who already had undergone device replacements, DePuy estimated that 37 percent of patients who used the all-metal system would need to have it replaced within five years. A British implant registry updated its projected failure rates for ASR patients in 2011. The devices were failing in one-third of cases. DePuy publicly challenged this estimate, but other global medical organizations projected even higher failure rates. DePuy settled three hip-related lawsuits in the summer of 2012 for $200,000 each. A 2013 court verdict then ordered the company to pay plaintiffs $8.3 million in damages. The company took a $3 billion special charge related to the medical and legal costs of the metal-on-metal technology. Later in the year, it agreed to pay
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$2.5 billion to settle more than 7,500 state and federal lawsuits affecting more than 8,000 people who had to have their all-metal artificial hips removed and replaced with another device. The Reimbursement Plan Under the reimbursement plan to these people, the typical patient obtained $250,000, before legal fees, for pain and suffering. However, it was uncertain if this deal would satisfy a sufficient number of the claimants. The proposed settlement, submitted to a federal judge in Toledo, Ohio, had to have the support of 94 percent of eligible claimants to go forward. Some claimants could do much better if they held out for better terms. Under the terms of the settlement, some patients were entitled to only small payouts, whereas other patients’ payments would be lowered based on how long the patient had the implant. The payment to a patient who had a device for five to six years fell to $225,000, and if the patient had a device for six to seven years, the payment went down to $200,000. However, patients could qualify for a special pool, based on the severity of their injuries, and obtain more money. About 10 percent of the claimants were eligible. For example, some patients in the special pool had replacements on both hips. The average basic award of $250,000 was affected by a variety of factors. Plaintiffs who smoked, were overweight, or were older also had their payments reduced. In 2014, J&J had to increase the money it reserved for the damages. The takeaway here, like in the Vioxx case, is that organizations introducing new technologies cannot ignore early warning signs of dangers. They must address these dangers with prompt action or face dire consequences. They need to monitor new technology introduced into the market and be prepared for a quick withdrawal should surprises take place, regardless of the short-term financial considerations. The Laws of Liability From a legal point of view, what type of due diligence is needed?8 According to classic legal doctrine, companies have to act as a reasonable person would under the same circumstances. If they do not conform to this standard, they are at fault and have to compensate the victims. The compensation can be very large. In the Union Carbide, BP, Merck, and J&J cases, the liability amounted to billions of dollars. Modern legal theory does not require proof of fault. The doctrine that prevails is strict liability, but strict liability does not mean that a company is without a defense. The company must show that the technologies it brings to market have no design or manufacturing defect, that it has provided adequate warnings, and that users have voluntarily assumed the risk. The latter can be demonstrated by showing that the company has provided users with enough information to make an independent judgment.
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Evolution of the Law How has the law of damages evolved in the United States? In legal terminology, this branch of law is called torts. Derived from French and Latin roots and meaning “to twist,” tort law deals with private harm or injury. When a person is harmed, the plaintiff (the person claiming to have been harmed) may bring an action against the defendant (the person alleged to have caused the harm). The purpose is to restore the situation to the condition before the harm was caused and, inasmuch as possible, to compensate the plaintiff for the damage that was done. Tort law also has a deterrent effect. If a company knows that a victim must be compensated, there is less of a chance that a perpetrator will commit an act that is known to cause harm. Insofar as tort law aims to restore a situation to its prior condition, its purpose is to promote a sense of justice in society. The deterrent effect of plaintiff suits in instances like Bhopal, BP, Vioxx, and J&J’s hip replacement can be quite large, but corporations often seem able to absorb these charges and go on as if nothing has happened. Classic Tort Law According to the classic tort law, a plaintiff has to prove breach of duty, actual damages, and causation, and a defendant can argue contributory negligence and assumption of risk. Even if the harm is unintentional, the defendant owes the plaintiff the duty of care that a reasonable person would show under the circumstances. When the courts find fault with the actions of both parties, they are not faced with an either/or situation. In some states, they have the right to apportion blame on a percentage basis. This rule reduces the plaintiff’s burden to prove that the defendant is at fault. By applying a standard of comparative negligence, states can reduce the award the defendant owes the plaintiff by the percentage for which the plaintiff is responsible. The exact apportioning of responsibility between defendant and plaintiff is one of the most controversial aspects of tort law. Therefore, some states have adopted nofault, which simplifies the process by eliminating costly and lengthy court procedures. It also guarantees that the victim receives some compensation, regardless of who is at fault.
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Assumption of Risk Assumption of risk means defendants can claim that the plaintiff was aware of the risks but decided to pursue the activity anyway. The protection offered by this claim has grown in importance as U.S. society becomes more litigious. For organizations introducing new technologies, this point of law is important. Sharing what is known about the risks with those who might be affected is critically important. The plaintiff’s awareness of risk need not be conscious and explicit, but the defendant’s argument is strengthened if a consciousness of the risks involved is specific. Therefore, there are many instances of risk-sharing when it comes to technologies. For instance, patients in hospitals are almost always required to sign papers acknowledging their awareness of risks before any type of complex surgery is performed. This sharing of what was known was absent in the Bhopal, BP, Vioxx, and J&J hip replacement cases. Punitive Action When the plaintiff has been warned, the courts are far less likely to take punitive action against the defendant. A plaintiff can still recover even after admitting awareness of risk, but the awards will be limited to compensation for tangible medical costs and lost earnings rather than intangible emotional distress or pain and suffering, which means that awards will be substantially lower. Withholding of relevant information led to punitive action in the Bhopal, BP, Vioxx, and J&J hip replacement cases. Strict Liability The classic theory of torts puts the burden of proof on the plaintiff to prove that the defendant is at fault. However, with the move toward strict liability, modern tort theory means that the plaintiff no longer has to prove fault. Strict liability theory derives from the treatment the courts give to inherently dangerous activities. For example, if a person owns wild animals, such as snakes or leopards, and those animals injure someone, the owner is responsible regardless of the care exercised. Likewise, a company that uses explosives is responsible for harm even if it observes safety rules. Strict liability was attached to the Bhopal, BP, Vioxx, and J&J hip replacement cases because in each instance the activity or product was inherently dangerous. According to strict liability, responsibility exists without the sense of moral opprobrium that applies under the classic approach.
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The Justification for Strict Liability What is the justification for strict liability? Why should a defendant have to pay when the harm inflicted is unintentional and the defendant’s actions are reasonable and appropriate under the circumstances? It is necessary to recognize that someone will have to bear the costs of damages, whether the victim, the injurer, or society at large through its governmental institutions. Modern tort law has decided to make the defendant or the defendant’s insurance company mainly responsible. Tracing the evolution of the doctrine of strict liability shows three periods:9 Recovery from damages was mainly governed under contract law in the first period, which lasted until the beginning of World War I. The classic theory of torts developed during the second period, which lasted from World War I to the mid-1960s. A strict liability standard emerged during the third period, which has been in effect since the mid-1960s. Under contract law, if a manufacturer of a technology caused a product defect, the consumer had no right to recovery if the consumer’s transaction was with the retailer, not the manufacturer. Privity of contract meant that a plaintiff could sue only when she had a legally binding contract with the defendant. Legal analysts, however, subsequently viewed the privity of contract requirement as prejudicial to consumers, who lacked the knowledge, expertise, and power of the manufacturers of technologies. The MacPherson v. Buick Motor Co. decision of 1916 ended the privity of contract requirement in product liability cases. A buyer typically purchases a car from a dealer, not a manufacturer. Regardless of contractual obligations, the courts hold manufacturers responsible. After this decision, product liability became a subset of tort law rather than contract law. Under this doctrine, a buyer has to prove that the manufacturer of a technology did not provide reasonable safety features or adequate warnings. A famous decision issued in 1947 by Judge Learned Hand in United States v. Carroll Towing Co. defined reasonable precaution as the expected injury exceeded the costs of precaution, and the defendant failed to take action. In the Bhopal, BP, Vioxx, and J&J hip replacement cases, this was the situation—the expected injuries exceeded the costs of precaution, and the defendants failed to take action. Further Movement from a Fault-Based System Further movement away from a fault-based system can be seen in a case against Coca-Cola Bottling Co. decided by Justice Traynor of the California Supreme Court in 1944. In this case, a Coca-Cola bottle exploded in the hands of a waitress. The courts decided against Coca-Cola Bottling with three main points being part of the decision: It is cheaper for society to have a strict liability standard. A plaintiff has to
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prove only damage and causation, not fault; the burden of proof—and the time and expense of legal proceedings—is reduced. The plaintiff did not have to show that Coca-Cola was responsible for the bottle exploding. Although more trials may take place, the ease of execution of tort cases should reduce total costs to society. It is less expensive for the producer to bear the cost of the damage than it is for the victim. The cost of a single accident can be devastating for the victim, who is often uninsured and unprepared. On the other hand, the costs of an accident may be trivial to the producer, who should have the foresight to acquire insurance. Also, liability costs can be passed on to consumers in the form of higher prices, which are probably only a few pennies for each product sold. The option of spreading the risk, available to the producers, is unavailable to customers. The producer’s intimate knowledge of the product and capability to change the situation dwarfs the consumer’s knowledge and the customer’s ability to change the situation. The consumer buys technically sophisticated goods that pass through a long and complex chain from factory to retailer. The consumer is unlikely to know where in the chain of design, production, and distribution a defect can occur. Therefore, if the consumer is seriously injured, the manufacturer is responsible. These three points were incorporated into the 1965 Second Restatement of Torts by the American Law Institute.10 Thus, strict liability became the norm and, in effect, replaced the slogan “Let the buyer beware (caveat emptor)” with “Seller beware.” A seller is held strictly liable even if it exercises all possible care in the preparation and sale. Clearly, Bhopal, BP, Vioxx, and J&J did not exercise all possible care. Refinements of the Laws of Liability The Second Restatement of Torts has since undergone a number of refinements that have made it more like the classic law of torts. First, the need to show product defect so that a manufacturer can be held liable pushes strict liability toward classic tort law. A defect can occur in the design or manufacture of the product or by virtue of a failure to warn. These defects existed in the Bhopal, BP, Vioxx, and J&J cases. Determining whether a defect has occurred, especially in product design, is similar to determining whether fault has taken place under the classic theory. The concept of reasonable behavior under the circumstances, often formulated as a state of the art defense, plays an important role. A second element pushing strict liability toward classic tort law is the continued consideration of contributory negligence. Most courts would hold that a manufacturer cannot be held liable if the consumer blatantly misuses the product. A third way in which strict liability is similar to the classic doctrine is that it
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retains the concept of assumption of risk. Defendants can claim that the plaintiff was aware of the risks but decided to pursue the activity anyway. Thus, warning labels and disclaimers are needed. Had Union Carbide, BP, Merck, and J&J adhered to these principles, they would have coped much better with technological danger. Conclusion This chapter has discussed what went wrong when Merck introduced the painkiller Vioxx and J&J introduced alternative all-metal hip replacements. Given the positive reputations of both companies, it was a surprise that they ignored early warnings because of commercial concerns, failed to communicate openly with customers, and suffered from huge damage payments even after they voluntarily recalled these products from the market. The large fines and liabilities, which the firms suffered, were avoidable had they taken the early warnings seriously. The chapter concludes with a primer on liability law. The laws of liability require that firms take warnings seriously and that they communicate openly and honestly with customers. Otherwise they may be subject to large punitive action claims against them.
Explanation / Answer
I will discuss the Product liability of the manufacturer, the law of tort which compensates the end user and the strict liability which is imposed on organizations like Johnson & Johnson, Vioxx by Merck, Bhopal (Union Carbide) etc. because I believe it is their responsibility to ensure developing and launching a product in the market which is safe for the end consumer.
The end consumer who is not aware of all the risks and in medical cases already under lot of stress and pain would have undergone a hip replacement and opted for a joint from J&J assuming it’s a company of high repute and it will give a product which will be well tested and have zero complication and side effects.
Here we see the organizations becoming aware of their product defects, for example, DePuy the joint manufacturing specialist a J&J subsidiary took 10 years to withdraw the defective hip joint when it was already used on 40,000 patients in the USA and almost 56000 patients outside the USA. They were recommended by orthopedic surgeons as most reliable. They were responsible for emitting metal ions in the human body which caused serious complications. They had to compensate a huge number of patients and finally had to withdraw the product from the market.
The case of Vioxx introduced by Merck is similar where despite symptoms of the medicine causing heart-related complications after the consumption of the drug. The company promoted the product aggressively through advertising, which was initially $160 million for the launch of the product. The reason for launching drug which apparently increased chances of the heart-related problem by 2.3 times was launched for commercial purposes only. They had many patents expiring and Vioxx was contributing $2.5 billion of sales in 2003. They finally recalled the product in 2004 fall, which was almost 5 years after its launch. They endangered human life only for financial gains and had to pay legal claims worth $ 18 billion in the year 2005.
I also agree with the article where it mentions the need to have strict product liability laws which insist on the warning and side effects clearly mentioned on the products. The law of tort and the compensation to the consumer should be given promptly to ensure the person is adequately supported and his welfare and well-being are restored.
The liability laws on manufacturer will ensure that the organizations that ignore human wellbeing for commercial gains should be strictly warned and should be prepared to face the consequences if they fail to meet their obligations of informing consumers of the risks associated in using their products. The consumer who is an innocent party and has limited resources in these cases already suffering. It adds to his suffering by the behavior of these companies.
To sum it up the organizations like Merck, J&J, Union Carbide etc should be morally responsible and they should take their responsibility towards society and people seriously. The legal system should also ensure they face strict penalties for violations and causing harm to individuals who are using their product assuming they are following all required safety measures.
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