Last week's Supreme Court drug ruling will cost lives - Wyeth v Levine

The Supreme Court and the Tyranny of Lawyers. By Gordon Crovitz
Last week's drug ruling will cost lives.
WSJ, Mar 09, 2009

Every era of change has holdouts. As the Industrial Age began, the Luddites smashed newfangled mechanized looms. They understood that automation would let more people enter the textile industry, and that low competitive prices would replace their high fixed prices. At one point in the early 1800s, there were more British soldiers fighting the Luddites than there were fighting Napoleon. Our Information Age has its own antitechnology, antimarket Luddites, as the Supreme Court reminded us in a loom-smashing opinion last week.

At one level, Wyeth v. Levine is just another lawsuit with a silly result. The Food and Drug Administration had required Wyeth to distribute carefully worded warnings with its antinausea drug. The FDA told Wyeth to warn that "under no circumstances should Phenergan Injection be given by intra-arterial injection." The warning label also included, in uppercase letters: INADVERTENT INTRA-ARTERIAL INJECTION CAN RESULT IN GANGRENE OF THE AFFECTED EXTREMITY. Tragically, a physician's assistant in Vermont ignored the clear warnings and injected the drug into the arm of Diana Levine, who then developed gangrene and lost the arm. She sued the hospital, successfully. But she also sued Wyeth.

The legal issue was whether the medical experts at the FDA had pre-empted state lawsuits by mandating clear warnings. A majority of justices said that such implied pre-emption could not block lawsuits. The case would have been different if Congress had specifically pre-empted state drug lawsuits. The simple lesson businesspeople took was that the drug maker could not have done anything to avoid being sued. This logic leads to every drug (and ladder, hammer and toaster) having to carry 50 different warnings, one for each state, updated by local juries from time to time.

More broadly, this case is Exhibit A for how our legalistic culture puts a drag on the innovation, transparency and risk-taking that our new era champions. The result will be higher hurdles for funding to start health companies. There will be less research and development for new drugs, at a time when genome and other path-breaking information should be breaking important new ground, curing people, and helping drive the economy. Prices for drugs will rise to cover future jury verdicts. Defensive medicine already accounts for 30% of doctor bills, an amount equal to the cost of covering the 50 million Americans without health insurance.

As legal reformer Philip Howard has pointed out, one reason for excesses in the legal system is that what worked in the Industrial Age no longer works in our less standardized era. "The idea of organizing how to do things," Mr. Howard wrote in his recent book, "Life Without Lawyers," grew out of the need to set up assembly lines and to regulate complex systems and industries. But "today we assume unquestioningly that any activity will be more effective if we detail in advance how to get the job done." Mr. Howard also noted that lowered standards for litigation mean that people are now more free to sue.

"These two great currents of social organization -- prescribing rules to specify how to do things and affording individual rights to invoke a legal proceeding -- now sweep us along through our day like a mighty river, causing us to cling to legal logic for ordinary daily choices," he wrote. "To stay afloat, we must constantly be prepared to answer this question: Can you show this was done properly?" Instead of risk-taking and personal accountability, we have what Mr. Howard called a "moving mudbank comprised of accumulating bureaucracy and whatever claims people unilaterally choose to assert."

There are signs that the Industrial Age is yielding to the Information Age. In Britain, Parliament passed a law in 2006 authorizing judges to consider whether allowing a particular lawsuit to go ahead could "firstly, prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way; or, secondly, discourage persons from undertaking functions in connection with a desirable activity."

This law blocks lawsuits that challenge potentially risky but desirable activities, from school outings to scientific innovation. It also liberates British judges to think about the real-world impact of lawsuits.

Just as jokes about life in the Soviet Union marked the end of the empire, humor in the U.S. suggests that it's time for common sense to replace the tyranny of legalism. The annual Wacky Warning Label Contest winners include a label on a baby stroller warning, "Remove child before folding"; a carpentry electric drill cautioning, "This product not intended for use as a dental drill"; and a brass fishing lure with a three-pronged hook on the end warning, "Harmful if swallowed."

Popular acceptance that one era has passed and another has begun is not enough to establish a clear demarcation. But as the example of the earlier battle against the Luddites shows, it's at least a start.