Economic Effects of Product Liability and Other Litigation Involving the Safety and Effectiveness of Pharmaceuticals

Economic Effects of Product Liability and Other Litigation Involving the Safety and Effectiveness of Pharmaceuticals

Economic Effects of Product Liability and Other Litigation Involving the Safety and Effectiveness of Pharmaceuticals

Economic Effects of Product Liability and Other Litigation Involving the Safety and Effectiveness of Pharmaceuticals

Excerpt

Many people are concerned about the economic effects of product liability in the United States, and there has been an active policy debate about this issue for several decades. Liability effects on the economic performance of the pharmaceutical industry have played a leading role in this debate. More recently, concerns have grown about other kinds of litigation in which drug safety and effectiveness are central issues. Such other safety- and effectiveness-related litigation includes criminal and civil complaints brought by the U.S. Department of Justice and lawsuits brought by state attorneys general and private plaintiffs under state consumer protection acts and other causes of action.

This monograph examines the economic incentives of pharmaceutical companies stemming from product-liability and other forms of litigation and considers effects on company decisions affecting product safety, effectiveness, availability, prices, and the mix of research and development. The emphasis, however, is on product safety and effectiveness. It should be of interest to policymakers and policy analysts who seek to understand the economic effects of pharmaceutical product-liability and related litigation as well as to legal practitioners and policy advocates as they formulate their policy arguments.

The research reported here was supported by core funds of the RAND Institute for Civil Justice (ICJ). It was made possible by a special contribution to the ICJ from Pfizer Inc. and a smaller, but also greatly appreciated, contribution to support data collection from Merck & Co. The analysis also employs data collected in an earlier project on mass litigation supported by Munich Re.

The RAND Institute for Civil Justice

The research reported here was conducted in the RAND Institute for Civil Justice (ICJ), a program of RAND Justice, Infrastructure, and Environment. RAND Justice, Infrastructure, and Environment provides insights and solutions to public- and private-sector decisionmakers across numerous domains, including criminal and civil justice; public safety; environmental and natural resources policy; energy, transportation, communications, and other infrastructure; and homeland security. RAND Justice, Infrastructure, and Environment studies are coordinated through four programs—the Institute for Civil Justice; the Safety and Justice Program; the Environment, Energy, and Economic Development Program; and the Transportation, Space, and Technology Program—and the Homeland Security and Defense Center, run jointly with the RAND National Security Research Division. Institute for Civil Justice research analyzes litigation trends and outcomes, evaluates policy options, and brings together . . .

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