In a devastating blow to Novartis, a federal judge denied a bid to overturn a verdict in which a jury decided the drugmaker failed to adequately warn about the risks that its Zometa and Aredia bone-strengthening meds caused severe jaw bone damage. And in making his decision, he writes that the jury was shown sufficient evidence to conclude a cover-up was undertaken with "the knowledge and approval of high-ranking officials."
The ruling, which was issued yesterday, was made by US District Court Judge James Beaty and came almost exactly a year after a jury awarded $12.8 million to Rita Fussman, whose family claimed she suffered jawbone damage while she was dying of breast cancer in 2009. The jury awarded $287,000 in compensatory damages, as well as $12.6 million in punitive damages, which were reduced under North Carolina law. The final award was nearly $1.3 million.
Novartis, however, sought a new trial and argued, in part, that punitive damages were awarded incorrectly. But the move backfired. In his ruling, Beaty notes North Carolina law requires that, for a plaintiff to win punitive damages, a jury must be presented with clear and convincing evidence at trial to determine that officers, directors or managers of a company "participated in or condoned the conduct constituting the aggravating factor giving rise to punitive damage.”
And Beaty decided that such evidence was, indeed, presented to uphold the punitive damage award. In other words, Novartis execs are being fingered. The Fussman case, by the way, was the first from the multi-district litigation in federal courts to be tried and the only case, so far, where a plaintiff presented evidence for punitive damages. As a result, his order may have the potential to reverberate across the hundreds of other lawsuits that Novartis faces.
In case you wondering, Beaty was rather emphatic. For instance, he wrote that "...the willful and wanton conduct alleged in this case involved intentional deception and suppression of medical evidence by Novartis employees in investigating side effects and communicating with medical professionals."
"...based on the evidence presented, the court concludes that sufficient evidence was presented to support a finding by the jury, by clear and convincing evidence, that Novartis managers intentionally concealed the risk of ONJ (osteonecrosis of the jaw) and attempted to subvert the medical inquiry regarding the risks of ONJ, all with the knowledge and approval of high-ranking officials within the company. In addition, the evidence would support the conclusion that Novartis managers took this course of action for purely financial reasons, in order to protect its marketing of bisphosphonate drugs."
"Indeed, the evidence presented at trial against Novartis on this issue was of such sufficient strength that during closing arguments, counsel for Novartis felt compelled to concede that there was 'bad news' for Novartis because documents admitted during trial showed that Novartis managers had, in the words of defense counsel, engaged in 'improper' thinking, were 'less than perfect,' and had raised ideas of doing things that 'probably should not have been thought about' to prevent publication of or obscure medical evidence regarding risks of ONJ with Aredia and Zometa."
"In addition, there was sufficient evidence presented to support the jury’s conclusion that this intentional deception and suppression of medical evidence by Novartis was related to Mrs. Fussman’s jaw injuries, because the evidence was sufficient to support the finding that the actions by Novartis were undertaken as part of an effort to keep doctors and other medical professionals from learning of the ONJ risks, and it was this lack of adequate warning and information that the jury had already determined was the proximate cause of Mrs. Fussman’s injuries" (here is the complete ruling).
We have asked Novartis for a comment and will update you accordingly. [UPDATE: At 2 pm ET, a Novartis spokeswoman sent us this: “We are disappointed and disagree with the court’s decision. We believe that Zometa is an effective option for cancer patients with bone metastases and hypercalcemia of malignancy. We are reviewing our appellate options.”]
This is not the first time that Novartis has experienced a trying moment over the Zometa and Aredia litigation. Last year, the drugmaker was sanctioned by a federal court judge in Tennesse for denying that it ran direct-to-consumer ads for Zometa and, then, failing to produce those ads - which were later discovered independently by lawyers for a woman who claims the medication caused osteonecrosis. The drugmaker flip-flopped on the existence of the ads in different motions and was recently ordered to pay about $50,000 in attorneys fees (back story).
So far, four cases have gone to trial over the Novartis drugs. Earlier this month, a federal court judge has dismissed a lawsuit. A New Jersey jury rejected claims by a woman who similarly charged the meds caused her jaw damage (see this). And two years ago, a Montana jury ordered Novartis to pay $3.2 million in damages to a cancer patient who made the same claims (back story). This same dispute, by the way, plagues Merck, which last month won a trial involving its Fosamax med (see here).