Takeda Gets a $6 Billion Punitive Damages Penalty (Actos)

A jury has ordered Japanese drug maker, Takeda Pharmaceutical, as well as their marketing partner, Eli Lilly, to pay $9 billion after finding that the company had hidden the cancer risks of the drug Actos. The Lafayette, Louisiana jury made the decision in a lawsuit filed by a man who was diagnosed with bladder cancer after using the drug for several years.

Punitive Damages

The jury ordered the pharmaceutical company to pay $6 billion in punitive damages with Eli Lilly responsible for the remaining $3 billion, but under the contract between Eli Lilly and Takeda, the marketing company is indemnified and will not have to pay any damages. It was the seventh largest punitive damage case in United States history, but it is expected that an appeals court would likely reduce the amount or overturn the verdict. Because the Supreme Court has ruled in recent cases that punitive damages cannot be more than ten times the amount of compensatory damages, which, in this case  was approximately $1.5 million, it is likely the punitive damage award will be reduced to about $15 million.

Cancer Diagnosis

The lawsuit was filed by Terrance and Susan Allen of Attica, New York in 2011 after Mr. Allen was diagnosed with bladder cancer. He had been taking Actos since 2006, and the lawsuit claimed that the manufacturer was aware of the risks of bladder cancer, yet failed to warn physicians or patients. Mr. Allen said that he was “overwhelmed” by the verdict, but that the lawsuit was more about making others aware of the dangers of the drug. Mr. Allen has been cancer free for approximately two years, but faces possible recurrences in the future.

Actos and Cancer

In 2011, the United States Food and Drug Administration (FDA) required that the label on Actos reflect that there was an increased risk of bladder cancer in patients who used the drug. Studies have shown that patients who took Actos for more than a year have a 40 percent higher risk of contracting bladder cancer than patients who do not use the drug. Shares in Takeda stock dropped nearly six percent the day after the verdict was announced.