A federal jury awarded a combined $9 billion in punitive damages against Takeda Pharmaceuticals U.S.A. Inc. and Eli Lilly & Co. after it found that the drug makers did not disclose cancer risks for their diabetes medicine, Actos.
The jury in Lafayette, La., awarded the plaintiff $6 billion in punitive damages from Takeda, the U.S. arm of Japan's largest pharmaceutical firm, and $3 billion from Eli Lilly. The jury also gave the plaintiff compensatory damages of nearly $1.5 million.
Legal experts said the high penalty, which they expect will be reduced on appeal, sends a signal to the pharmaceutical industry to provide customers with proper warnings about the dangers of their medications. The verdict may also be thrown out on appeal.
"The question is how much money does it take to get the attention of a giant company like Takeda?" said Marsha Cohen, professor of law at UC Hastings College of the Law. "These companies shouldn't be unaware of the risks for chronic disease drugs like Actos, which have a huge number of people taking them."
Kenneth Greisman, general counsel for Takeda, said Tuesday that the company would "vigorously challenge" the verdict in post-trial motions and on appeal.
Mike Harrington, general counsel for Eli Lilly, said the Indianapolis company would strive to overturn the verdict. He said the evidence did not support the plaintiff's claims.
Takeda made Actos, and Lilly marketed it in the U.S. and Canada.
Takeda was accused in the suit of failing to warn users of the medication that research had linked Actos to increased risk of bladder cancer. Instead, the company allegedly hid the risks in order to protect its blockbuster drug.
The Food and Drug Administration said in 2011 that use of Actos for more than a year may be associated with heightened risk for bladder cancer. That same year, regulators in France and Germany suspended sales of Actos over health concerns.
Takeda has already defended itself in court several times over Actos.
In two cases last year, juries in California and Maryland ordered the company to pay millions in damages, but judges in both cases ultimately threw out the verdicts.
A jury in Las Vegas this year rejected allegations that Takeda did not take steps to warn users about the potential risks of Actos.
Takeda still faces about 2,700 pending lawsuits over Actos, according to data compiled by law firm Bernstein Liebhard.
The jury verdict was yet another legal headache for Takeda, which raked in billions in Actos sales before its patent expired in 2011. Since then, the company has faced generic competition and scrambled to find other sources of revenue.
Takeda stopped development of a successor drug to Actos earlier this year over concerns of possible liver damage.
Shares of Lilly fell 4 cents to $58.58.