After getting hammered in quick succession for $500 million, $162 million and $90 million worth of punitive damages in three cases involving a total of just five plaintiffs, Teva settled its Nevada hepatitis C (HCV) / Propofol claims. The price tag was just past a quarter billion dollars.
So what happened? Teva's generic Propofol wasn't defective. It didn't leave the factory contaminated with HCV. Instead the claims arose out of the following findings of the CDC:
Inappropriate reuse of syringes on individual persons and use of medication vials intended for single-person use on multiple persons was identified through direct observation of infection-control practices at clinic A (Desert Shadow Endoscopy Center). Specifically, a clean needle and syringe were used to draw medication from a single-use vial of propofol, a short-acting intravenous anesthetic agent. The medication was injected directly through an intravenous catheter into the patient's arm. If a patient required more sedation, the needle was removed from the syringe and replaced with a new needle; the new needle with the old syringe was used to draw more medication. Backflow from the patient's intravenous catheter or from needle removal might have contaminated the syringe with HCV and subsequently contaminated the vial. Medication remaining in the vial was used to sedate the next patient.
and the final report of the Southern Nevada Health District which includes the following graphic demonstrating how the clinic contaminated the Propofol:
The vials were clearly labeled for single use and the warning was further emphasized when reports surfaced that some were being used for multiple doses. Discovery apparently revealed that the larger vial size helped reduce manufacturing costs.
Okay, so Teva was found liable for not guarding against the (allegedly) foreseeable blatant disregard of its warning labels and of standard vaccination administration safety procedures by the endoscopy clinic. Nevada seemingly has an expansive view of duty and its jurors a limitless view of foreseeability. But what explains the repeated mega punitive verdicts? Every mass tort has its outliers but we've not seen anything like this. If we hear any scuttlebutt we'll let you know.
Along the way it certainly looked like the cases were going well for Teva. For example, it made some good law at the Nevada Supreme Court which we've mentioned previously. Specifically the court recognized that a rule preventing a defendant from discussing other possible causes (unless its experts are willing to testify that such alternate cause(s) were, in reasonable medical probability, the cause in fact of plaintiff's illness) would work a great injustice. As we've said before the effect of such a rule would be to admit the most speculative claims of causation while excluding the most reasoned and sober assessments of causal attribution.
Why did Teva settle? Again, we're not privy to any inside information but hazard the following guess. The recent tendency of the Nevada Supreme Court to affirm eye-popping jackpot verdicts weighed heavily in Teva's analysis. Usually when you get a huge judgment before a supreme court, as Teva had here, you're pretty confident that at the very least the outlier award will be substantially reduced. Yet in Nevada these days such payouts are quite likely to be affirmed. In any event we're betting that the Nevada civil courts will be busy and that tort claims arising out of the spread of pathogenic bacteria, viruses and prions will increasingly be the focus of the plaintiffs' bar.