Update on recent development in the pharmaceutical industry
09 September 2005In our August 2004 newsletter we reported on a number of trends in class actions in Australia including in the health care and pharmaceutical industries. These trends included an increase in medical malpractice claims (despite the high standard of medical care in Australia) and an increase in the number of class actions against pharmaceutical and medical device manufacturers over the alleged adverse effects resulting from, or defects in, the use of these products. In this article, we provide a brief update on some recent developments in the pharmaceutical industry.
Bringing a drug to market
The recall of a number of high profile drugs over the last year has highlighted the difficulties associated with developing and testing new drugs. These difficulties have been brought into particularly sharp relief by the recall of Tysabri, a new multiple sclerosis drug. Tysabri was recalled after several patients using Tysabri allegedly developed a rare and very serious progressive neurological disease called Progressive Multifocal Leukoencephalopathy (PML). PML usually occurs only in immuno-suppressed patients, often resulting in irreversible neurological deterioration and ultimately death. At first, it was thought that the risk of developing PML only arose if a patient was using Tysabri in combination with another drug or when Tysabri was used over long periods. However, reportedly cases subsequently emerged of patients using Tysabri (and no other drugs) for a short period who developed PML. The recall of their drug illustrates a worrying phenomenon—a drug for which a serious (and potentially fatal) adverse effect could not be readily identified in trials, and where the apparently resulting disease cannot be treated by simply stopping use of the problem drug.
The price of drug recalls
The cost to pharmaceutical companies of drug recalls has recently been quantified in the case of the drug Fen-Phen. Fen-Phen was an anti-obesity drug which was recalled in 1997 after reports of heart valve disease and pulmonary hypertension primarily in women who had taken this drug. In April 2005, American Lawyer magazine reported that more than 50,000 product liability lawsuits had been filed in relation to this recall and that the total cost to date was estimated to be as high as US$14 billion.
The cost of the recent Vioxx recall is yet to be quantified. A United States jury in the last week has awarded approximately US$250 million in damages in an action brought by an individual over Vioxx, in what is thought to be the first in thousands of such actions. Australian law firm, Slater & Gordon, has signalled that it will be bringing a class action later this year over Vioxx.
One factor (of many) which may be contributing to the widespread impact of drug recalls, and so the size of class actions, is the emerging trend of consumers asking to be prescribed the latest drug when another existing drug may be equally effective. This means that the take-up of new drugs by consumers is often swift and on a large-scale, with the result that any problems that are subsequently identified with the drug are likely to affect a large number of consumers.
The response?
So how can pharmaceutical companies respond to the increasing difficulties faced in bringing a drug to market, and in particular to the rising trend of class actions? In response, the focus of companies (as well as regulators) has fallen on the conduct of clinical trials. It has been suggested by some commentators that the clinical trials may need to be longer and more wide-ranging in order to detect side-effects that are rare or only occur when a drug is used over long periods, and that the clinical trialling of new drugs should be more transparent. The latter suggestion has been taken up by one pharmaceutical company which now publicly discloses information on clinical studies of its drugs on an online clinical trials register.
The many suggestions of how to address the issue of problem drugs are of course vitally important to consider and, if determined to be effective, to be implemented. However, it is important to recognise that any new measures implemented will only ever reduce, but not eliminate, the potential for claims relating to allegedly unsafe drugs that have been released to market.
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