Actos Lawsuit Results in Landmark $9 Billion Punitive Damages Verdict

Following more than 12 weeks of trial, it took a Louisiana jury only a few hours to return a verdict in the first federal case involving the development of bladder cancer from side effects of Actos, awarding $1.5 million in compensatory damages and an additional $9 billion in punitive damages against Takeda Pharmaceuticals and Eli Lilly.

The landmark jury award, which may be the largest ever in a pharmaceutical product liability lawsuit, came in a case brought by Terrance Allen, who alleged that the makers of the diabetes drug Actos withheld information from consumers and the medical community about the risk of users developing bladder cancer.

The Actos trial was the first “bellwether” case in the federal court system, where about 3,000 other complaints are pending involving nearly identical allegations.

Following closing arguments presented on Monday in the U.S. District Court for the Western District of Louisiana, the jury awarded $1.5 million in compensatory damages, which are designed to compensate Allen for his injuries. The jury also awarded additional damages designed to punish the drug makers for their actions, indicating that Takeda Pharmaceuticals should pay $6 billion in punitive damages and another $3 billion should be paid by Eli Lilly, which helped distribute the drug in the United States for several years.

Before the case began, U.S. District Judge Rebecca Doherty, who is presiding over all federal Actos bladder cancer lawsuits, found that Takeda acted in bad faith during pretrial discovery, either accidentally or intentionally destroying evidence relevant to the cases. As a result, Judge Doherty allowed evidence to be presented to the jury regarding the spoiliation of evidence.

Testimony and evidence was presented during the trial that suggested that Takeda Pharmaceuticals actively tried to hide the drug’s links to bladder cancer and successfully did so for several years. The trial included internal memos and communications, as well as scientific studies that Allen’s attorneys argued the drug maker tried to keep the public unaware.

Takeda has maintained that Allen’s bladder cancer was not caused by Actos and that the company did due dillegence in providing bladder cancer warnings. However, the jury found that the popular diabetes drug was the cause of Allen’s bladder cancer diagnosis and awarded the seventh largest punitive damages verdict in U.S. history.

The drug maker has indicated that it will appeal the decision, and it is likely that the verdict will be substantially reduced.

Following the award, Takeda’s stock dropped more than eight percent. While some analysts say investors are overreacting, the drug maker’s overall cost to settle Actos lawsuits is likely to be substantial, since they will face a risk of punitive damages in other cases.

Actos Litigation

Actos (pioglitazone) is a type 2 diabetes drug that has been used by millions of Americans. Concerns emerged in 2010 about a potential link between Actos and bladder cancer, leading to thousands of product liability lawsuits being filed against the drug makers for failure to adequately research the medication or provide sufficient warnings to consumers and the medical commuity.

In addition to cases pending before Judge Doherty in the federal Actos MDL (Multidistrict Litigation), a large number of cases have been filed in various state courts throughout the country. At least three trials have already taken place at the state level, with conflicting results.

In May 2013, a California jury awarded $6.5 million in damages over Actos bladder cancer in a case brought by Jack Cooper, who was given an expedited trial date due to his grave health. However, following post-trial motions, that verdict was reversed after the state court judge excluded the plaintiffs’ expert witness testimony.

A second trial was held in Maryland state court in September 2013, which resulted in a jury finding that Takeda failed to adequately warn about the risk of bladder cancer from Actos and awarding $1.77 million in damages. However, the case resulted in a defense verdict for the drug maker under a unique Maryland law, known as contributory negligence, as the jury also found that the plaintiff failed to exercise reasonable care for his own health, which nullified the negligence of the drug maker.

A third Actos bladder cancer trial recently concluded in Nevada state court, which resulted in a defense verdict after the jury determined that both Actos and the plaintiff’s history as a smoker contributed to the development of bladder cancer. In that case, the plaintiff also ordered generic versions of Actos from online pharmacies, which raised questions as to whether Actos or unknown factors in the generic versions purchased online could have contributed to the development of the disease in that case.

Another state case is currently underway in Las Vegas. The case involves claims by two different plaintiffs who say they developed bladder cancer as a result of taking the drug.