Trial lawyers are quietly working to create a deluge of new lawsuits with a bill that is gaining traction on Capitol Hill.
The bill, called the CREATES Act, would give private individuals an unprecedented right to sue to enforce the Federal Food, Drug and Cosmetic Act (FDCA) that controls how drugs are approved by the FDA.
Purportedly needed to address a conflict between generic and name brand drug manufacturers, the bill includes several astonishing giveaways obviously intended to make lawsuits against the drug manufacturers are highly lucrative endeavor.
For example, the bill ties civil penalties for any violations to the “gross profit” of companies involved. Unlike many, many other instances where individuals are afforded the right to seek redress in court, there is no cap on the penalties or even a limitation they somehow reflect the actual loss allegedly incurred by the plaintiff.
Generally speaking, the default under federal law is the government’s prosecutors identify any alleged violations of the law and bring perpetrators to court. Fines include clearly defined caps and are payable to the U.S. Treasury.
The more aggressive version of this, found in several areas like in the environmental laws, allows private individuals to sue to force the government to enforce the law on someone else. This itself has been wildly abused by environmentalist groups who have been waging a legal jihad on the energy industry for decades, with great success.
The CREATES Act would be in a brand new, third category. This allows private individuals to sue to enforce the law, but the fines go to those individuals and are theoretically limitless.
In the modern legal field, opportunities like these are exploited as pure money-making opportunities, with Wall Street investment groups funding lawyers who systematically try cases until one comes home big.
The legislation was introduced by Sen. Patrick Leahy (D-VT), one of the most liberal members of the Senate and a huge trial lawyer ally and top recipient of their campaign contributions. He’s received millions from lawyers over the course of his career. The niche issue involved was likely chosen because it allows lawyers to target drug companies who, one, have significant assets that justify bringing even highly frivolous suits given the chance of a major payday and two, are seen as politically vulnerable given recent controversies over the price of name brand drugs.
Besides the obvious consequences of siccing tens of thousands of trial lawyers on the industry that creates tomorrow’s medicines, the bill has also alarmed patient advocates like March of Dimes because it could easily lead to unsafe drugs on the shelves.
The context for this fight is that when name brand drugs are nearing the end of their patent, there’s a legal process governing how the name brand and generic drug companies collaborate as the generic companies prepare to sell the drug for the first time. Especially for the highly complicated medicines that are produced today, it’s not a simple process for the generic company to start making these drugs, so there are a number of checks to ensure the generic versions are safe and of the same quality as the name brand versions.
The generic drug manufacturers are pushing to speed this process up because the expenses of this quality control step eat into their profit margins. Hence, the CREATES Act, which gives them the right to sue any companies they allege aren’t fully complying in the collaboration process.
The problem is, terrifying the name brand companies with lawsuits that could very easily destroy some of the largest and most well-established firms in the U.S. is going to quite obviously lead to cutting corners.
Sooner or later, this is going to end in disaster when the generic versions of a complicated drug end up harming patients. It’s this concern that led March of Dimes and several other groups to come out against the bill.
In conclusion, the profit motive is a powerful thing. For some people, it motivates them to work day and night to invent medicines that cure previously sickness and diseases that killed people for thousands of years. Other people come up with deviously clever ways to take other people’s money via lawsuits. One of these is what we’re trying to promote.
Keep an eye on the CREATES Act and help keep the trial lawyers at bay.