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Eli Lilly and Takeda shed billions in punitive damage payments.

Summary: This past spring, pharma companies Eli Lilly & Co and Takeda Pharmaceuticals Co were taken to task over their alleged conspiracy to hide cancer ...

This past spring, pharma companies Eli Lilly & Co and Takeda Pharmaceuticals Co were taken to task over their alleged conspiracy to hide cancer risks associated with the diabetes drug Actos. In April, a jury decided that the two pharmaceutical companies would face a massive $9 billion in punitive damages related to mislabeling of the product. But as of Oct 27, the only thing massive about those damages is the reduction they were granted by U.S. District Judge of Louisiana Rebecca Doherty, who cut them back to $36.8 million.

In her decision, Doherty stated that the $9 billion --one of the largest punitive damage claims of all time--was "excessive" and had denied the companies due process. Doherty granted a motion from the drug makers to reduce the damage payments earlier this year, but rejected their request for a new trial following the decision.

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While the damage claim was diminished considerably, Reuters reports that Doherty did not pull any punches in her comments on the pharmaceutical companies' conduct. She said in her ruling the defendants had engaged in "seriously reprehensible behavior," urging higher courts to give more guidance on the limits to punitive damages that can be collected from defendants in such cases. Doherty also said that the companies had "disregarded, denied, obfuscated and concealed" issues with the drug for over a decade, in her rejection of their request for a new trial.

Under the terms of the new damage awards Takeda will $27.6 million and Eli Lilly will pay $9.2 million.

The original suit addressed health issues stemming from the use of Actos, an orally administered drug designed to control blood sugar levels for patients with type-2 diabetes. According Actos' warning label, the product can result in an additional risk of bladder cancer. However, a study of the drug showed that long-term users had up to a 40 percent higher risk of developing cancer. Plaintiffs allege that the Takeda and Lilly did not do enough to warn users of the serious increase in cancer development that the drug could promote.

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Publication:Inside Counsel
Date:Oct 28, 2014
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