In a great example of “CYA,” Takeda settles Actos cases for $2.3B. The agreement, yet to be approved by the plaintiffs, is a result of last year’s whopping smackdown in which a federal jury awarded a shopkeeper $9B, payable by Takeda and it’s former partner, Eli Lilly & Co. The court reduced that award to $36.8M, but even so, that was a better deal than Takeda is offering now.
Over 3,500 Actos cases were consolidated on Louisiana, In Re Actos (Pioglitazone) Products Liability Litigation, presided over by U.S. District Judge Rebecca Doherty in the Western District. Takeda still faces 4,500 more cases in state courts in West Virginia, California, Pennsylvania and Illinois.
Plaintiffs, former Actos users, claim that Asia’s biggest pharmaceutical company either ignored or hid the drug’s possible carcinogenic properties, as well as lied to U.S. regulators. If 95% of the class OKs the settlement Takeda will put $2.37B into a fund. Individual plaintiffs would get in the neighborhood of $300,000, possibly less after factors such as age, exposure to other toxins and smoking history are taken into consideration.
The settlement will result in the first loss on the company’s records since it was listed on the Nikkei exchange in 1949. Takeda’s Q4 2014 loss will be $2.7B. Hear that sound? It’s the world’s smallest violin being played in sympathy.
University of Michigan professor of law and business, Erik Gordon, opines that, “It’s a good deal for Takeda. Takeda’s mishandling of this drug is worthy of large punitive damage awards. Given the apparent strength of the cases, the plaintiffs probably deserved more compensation than this deal offers.” Back to the CYA, Takeda hopes that the settlement will save it from juries hearing the case and awarding reasonable damages to Takeda’s victims.
Actos generated over $16B in revenue for Takeda since its release in 1999. The company has never reported a loss on the books until now. Yet, it is clearly trying to rob the plaintiffs of fair compensation for damages suffered. It seems to be saying, “Sure, our diabetes drug gave you cancer so now you’re dealing with two major illnesses. We’re so sorry. Here’s a pittance for your troubles.” Big Pharma has never been about helping people, at least not when it negatively impacts the bottom line.
Personally, I hope the class as a whole tells Takeda to take its offer, fold it into a one-inch square (being careful to round the corners) and stuff it.