Excessive Verdicts in Life Sciences: Current Trends and The Demand for a New Approach

Public perception continues to greatly impact litigation against the life sciences industry. Over the past decade, ongoing public anger over perceived high drug prices and the devastating opioid epidemic has entrenched the American public’s strongly negative views of pharmaceutical companies. Polling by the Gallup Organization in the fall of 2023 found that 60 percent of Americans viewed the pharmaceutical industry negatively_, while only 18 percent held a positive view. These strongly held and decidedly negative sentiments play a crucial role in influencing the litigation outcomes involving the industry, affecting both settlements and jury verdicts.

The financial toll on the industry is substantial, with nationwide opioid litigation, over two decades of industry-wide litigation regarding pricing practices, and other litigation costing tens of billions of dollars. This situation threatens the industry’s financial health and future, leading to numerous Chapter 11 bankruptcies over the last few years. Additionally, companies that remain in business face significantly higher legal expenses, increased insurance premiums, and more cautious and defensible pricing decisions and business practices, even when not required by law.

At Buchanan’s Fall Life Sciences and Healthcare Summit in Philadelphia, attorneys, industry experts, and insurance professionals discussed trends impacting life sciences litigation, including the unfavorable litigation landscape and the strategic options available to life sciences companies defending against dubious claims. Buchanan attorneys were joined by John Ryan, Executive Vice President, Chief Counsel Officer and Corporate Secretary at Temple University Health; and Nick Gaudiosi, Northeast Region Leader of Aon Risk’s National Healthcare Practice.

Adopting a ‘Litigation Readiness’ Strategy

Despite the challenging environment, life sciences companies can take several proactive steps to enhance their ‘litigation readiness.’ When combined with time-tested and well-executed litigation strategies, these actions can level the playing field against aggressive government agencies and private plaintiffs’ attorneys. These include:

Developing and implementing a robust compliance program consistent with federal guidelines.
Ensuring appropriate and ongoing training for executives and key employees.
Creating and maintaining information governance policies, with ‘defensible deletion’ as the cornerstone.
Obtaining appropriate D&O and other insurance and understanding the policy coverage and limitations.

When litigation arises, time is of the essence. Life sciences companies must engage experienced counsel who understand the life sciences industry and strategies to overcome current public perceptions. Numerous strategic choices can move the needle and aid in a favorable litigation outcome:

Know your case: Engage in early case assessment to identify at the outset the strengths and weaknesses of the client’s position.
Litigate aggressively: Where appropriate, challenge jurisdiction or seek transfer to a more favorable venue, file Rule 12 motions, and aggressively contest the scope of fact discovery.
Tell a strong company story: Identify and prepare knowledgeable fact witnesses and sympathetic corporate designees who can explain industry dynamics and the client’s business in plain language.
Test your case: Conduct early and thorough testing with mock juries of potential cases and trial themes and defenses, and be ready to change course as needed.

The Need for Experienced Counsel

Propelled by negative public perceptions, the life sciences industry faces more aggressive and higher-stakes litigation by ever-more-sophisticated government enforcers and private plaintiff attorneys. Working with experienced counsel who know the industry has never been more important. At Buchanan, our attorneys have demonstrated litigation and trial expertise and always take a proactive and collaborative approach to protecting your business and its interests.