Pharmaceutical Companies Face $9B In Punitive Damages For Concealing Cancer Risks

A Japanese drug maker is facing higher punitive damages for allegedly concealing the cancer risks associated with a diabetes drug than those dished out in the past by federal juries.

The $6 billion in damages leveled against Takeda Pharmaceutical overshadow the $5 billion once imposed against Exxon Mobil Corp for the Exxon Valdez oil spill in 1989. But don’t expect that number to stick as the company says it plans to contest the damages, Reuters reports

Takeda and co-defendant Eli Lilly promoted Actos, a diabetes drug, without making clear the possibility of cancer risks associated with the drug.

“We intend to vigorously challenge this outcome through all available legal means, including possible post-trial motions and an appeal,” Kenneth Greisman, general counsel of Takeda Pharmaceutical, says in a statement.

For its part Eli Lilly, who takes 25% of liability in the case, was ordered to pay $3 billion in punitive damages. The company says in a press release that it will be indemnified by Takeda for its losses and expenses around the litigation, and also plans to challenge the outcome of the case.

The plaintiffs’ lawyer in the case says it was not certain whether the damages award would be sustained as the legal process continues.

The $9 billion in combined punitive damages awarded against the companies exceeds the massive penalty previously handed down to Exxon Mobil Corp following the Exxon Valdez oil spill.

However those damages were reduced in 2008 when the U.S. Supreme Court ruled the award had been “excessive.” The company ultimately paid $500 million.

Punitive damages are awarded to discourage other companies from bad conduct, while compensatory damages are meant to pay victims for their actual losses.

In the most recent case, the jury awarded the payment of $1.475 million in compensatory damages to victims of the pharmaceutical companies.

Reuters reports the jury deliberated for an hour and 10 minutes before delivering its verdict, and another 45 minutes to come out with the multibillion-dollar punitive damages.

This isn’t the first case against Takeda, but it’s a markedly different outcome.

Last May, a U.S. judge nullified a jury verdict for $6.5 million against the company after ruling the plaintiffs failed to offer reliable evidence that Actos caused cancer.

Japan drug maker Takeda to fight $6 billion damages imposed by U.S. jury [Reuters]

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