Wisconsin GOP Pushes ALEC Anti-Consumer Bill to Protect Drug Makers

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In the name of "job creation," Wisconsin GOP legislators are taking another page from the American Legislative Exchange Council (ALEC) playbook and pushing a bill that gives global corporations that manufacture drugs and medical devices immunity from lawsuits when their products injure or kill.

Drug and Medical Device Immunity in Wisconsin

Wisconsin Governor Scott Walker called a so-called "Special Jobs Session" to consider a list of bills, including a version of the ALEC "Drug Liability Act." ALEC is the corporate-funded national organization that allows Big Business to craft, then vote to approve, "model bills" along with politicians that right-wing legislators then take home and push in their states. The Wisconsin bill, LRB 2890, is sponsored by Sen. Rich Zipperer (R-Pewaukee), who paid his ALEC dues with taxpayer dollars.

The bill gives drug and medical device manufacturers complete immunity from lawsuits based on strict liability if the product was approved by the Food and Drug Administration (FDA) and complied with FDA regulations. This is even more extreme than the ALEC bill, which only prohibits punitive damages against drug manufacturers if the FDA approved the drug that killed or injured a person. (See the side-by-side comparison here).

Lawsuits might be unnecessary if there were limitless funds for independent clinical trials and if the FDA approval process worked perfectly to weed out dangerous products. But it does not. Numerous drugs have been approved by the FDA only to be recalled after people died or were seriously injured.

Vioxx and FDA's Failure to Regulate

The arthritis drug Vioxx was a recent, high-profile case demonstrating that FDA approval alone is inadequate to protect the health of consumers. The FDA approves drugs and devices based on evidence and data largely provided solely by the manufacturer. Vioxx was approved by the FDA and sold for five years, but its manufacturer Merck only pulled it from the market in 2004 when a study revealed it may have led to more than 27,000 deaths from heart attacks and sudden cardiac arrests. Merck is an ALEC member and donated to the 2011 ALEC Annual Meeting at the "Trustee" level.

The FDA had known of the risks for years but failed to act. At the time of the recall, Steven Galson, then-director of the FDA's Center for Drug Evaluation and Research said the study and recall was "not a total surprise" and that they were "aware of the potential for cardiovascular effects." In Congressional hearings on the FDA's failure to respond to the dangers posed by Vioxx, FDA researcher David Graham described the industry's influence over the FDA and efforts by the agency to block findings that the drug posed significant health risks.

Under Rep. Zipperer's proposed bill in Wisconsin, the fact that the corporate-influenced FDA initially approved a drug based on industry data would prevent family members of those killed by products like Vioxx from holding the firm accountable in a Wisconsin court.

"Torts" and Civil Justice

An injury for which a person can sue is known as a "tort." While often a lawsuit cannot undo a person's injury or loss, monetary compensation -- "damages" -- provides the next-best substitute.

Tort lawsuits not only compensate an injured person for their medical bills, lost wages, and suffering, but also provide a check on a manufacturer's future carelessness or wrongdoing. The possibility of a lawsuit, and the associated financial liability, provides a powerful economic incentive for manufacturers to focus more carefully on safety, a consideration that might otherwise be secondary to profits.

Under the tort liability system, free market economic pressures help provide a check on corporate misbehavior to complement efforts by government regulators.

But when regulators fail to adequately regulate products like Vioxx on the front end, tort liability becomes doubly important to ensure safety in the marketplace. The National Conference of State Legislatures (NCSL) has said, "Our civil justice system establishes a duty of care that protects citizens when the federal government is too slow to act or when federal standards are insufficient."

According to Ed Vopal, President-Elect of the Wisconsin Association for Justice, Rep. Zipperer's bill would help do away with the deterrence effect of tort liability and make it more difficult for Wisconsinites wrongfully injured to be fairly compensated. "The bill eliminates the check on manufacturers the civil justice system provides," he says. Absent civil liability, "manufacturers will have less of an incentive to make their products safe."

Wisconsin Bill Applies to Medical Device Liability

Rep. Zipperer's bill also goes further than the ALEC Drug Liability Act by extending immunity to manufacturers of FDA-approved medical devices like artificial knees, heart valves, or defibrillators. Here too, the risks posed by the devices are great, and FDA's oversight is insufficient.

In Spring 2005, 21-year-old Joshua Oukrop went for a bike ride with his girlfriend. He suffered from a genetic heart disease and relied on a defibrillator to shock his heart back to a normal rhythm in the event of an irregular heartbeat. But on this day, Joshua's defibrillator short-circuited, failed to shock his heart as intended, and he died.

The manufacturer, Guidant, had learned three years earlier that the device could short-circuit at a crucial moment. It put a safer version into production but continued selling the 37,000 faulty devices it had already manufactured. It made no effort to warn doctors, patients, or the FDA about the possible risks until just before the New York Times published a front page story.

Guidant subsequently faced a series of lawsuits for its defibrillators and was represented by the law firm Shook Hardy & Bacon (SHB). SHB partner Victor Schwartz, the "undisputed king of tort reform," is the co-chair of the ALEC Civil Justice Task Force, and other SHB partners have also been involved in ALEC leadership positions.

The defibrillator was FDA approved when it left Guidant's control, so under Zipperer's bill, Guidant would be essentially immune from a suit based in Wisconsin. The bill provides an exception when a manufacturer committed "fraud" against the FDA, but fraud is very difficult to prove and is usually only discovered after a lawsuit is initiated. In the Guidant case, solid proof that the company knowingly covered up the defibrillator's dangers was only revealed in the course of a lawsuit against the company.

Additionally, a study released earlier this year demonstrates how a "streamlined," or fast track and less stringent, FDA approval process is resulting in a growing number of medical devices making it to market without adequate testing. Of the 113 products the FDA recalled between 2005 and 2009 for posing serious, potentially life-threatening risks to patients, seventy one percent had never been tested on humans.

But Will It Create Jobs?

The bills in Governor Walker's special session are allegedly focused exclusively on job creation. But according to Vopal, Rep. Zipperer's ALEC-influenced bill will not create jobs, but will make it harder for Wisconsinites to access the civil justice system when they or a family member are injured or killed by a drug or medical device.

Michigan has had a law like the one proposed by Zipperer since 1995, making it the state with the broadest drug manufacturer immunity in the country. "It hasn't worked out too well," says Vopal. Despite Michigan having the country's most favorable regulatory climate for drug manufacturers, in 2007 Pfizer (an ALEC member) closed several facilities and eliminated 2,400 jobs. "And they moved to a state that did not have one of these immunity bills," he says.

"All this bill will do is prohibit Wisconsin citizens from pursuing justice in the civil court system," says Vopal. "It would be devastating for Wisconsin consumers."