Is There a Massive Weight-Loss Drug Litigation in the Making?
America is getting fatter and fatter. According to the Centers for Disease Control, more than 40% of us now are obese. We know — not good news right before the holidays. But for many of us who make New Year's resolutions, there's always next year.
Cue weight-loss drugs. Originally approved for the treatment of diabetes, weight-loss drugs are working wonders for people who struggle to control their weight. Some studies suggest that patients who use these drugs and make lifestyle changes on average lose between 15 and 30 pounds. Miracle drugs indeed.
Less Fat, More Money ... and More Problems?
The companies that make these drugs are seeing major dollar signs. More and more, insurance companies are approving weight-loss drugs such as Ozempic, Wegovy, and Mounjaro, for their formularies, making them affordable for consumers. Unless you've been living under a rock, you've seen the ubiquitous ads on TV, plastered on internet pages, and dominating your Instagram and Facebook feeds. The size of the market is projected to reach $77 billion per year by 2030.
But with every drug comes side effects. This class of weight-loss drugs, called glucagon-like peptide-1 receptor agonists (GLP-1RAs), has been associated with digestive problems. Some people who take them find that the food they eat may not clear their stomach (gastroparesis) or their intestines (ileus) at a normal rate, which can cause serious health problems.
Failure to Warn
Cue the lawsuits. Plaintiffs' lawyers have filed about 20 lawsuits over the drugs in various federal courts across the country, claiming that the drug manufacturers failed to warn of these risks. They have now asked a panel of federal judges — the aptly named Judicial Panel of Multidistrict Litigation — to transfer all of the cases to federal court in the Western District of Louisiana for coordinated pre-trial proceedings. One well-known plaintiffs' firm, Morgan & Morgan, claims to be investigating as many as 10,000 potential claims. That's a lot of lawsuits.
Morgan & Morgan argues that the appropriate judge to manage weight-loss drug litigation is Judge James D. Cain, Jr., who sits in Lake Charles, Louisiana. While Judge Cain, a Trump appointee, has not managed multidistrict litigation (MDLs) before, he has handled hundreds of hurricane-related property damage claims in the few years he has been on the bench. Morgan & Morgan also report that the Western District of Louisiana is free from MDLs at the moment, making it and Judge Cain, in their view, the perfect place and person to handle this litigation.
Why Does Making It an MDL Matter?
Novo Nordisk and Eli Lilly, the companies that make these drugs, have yet to take a position on Morgan & Morgan's motion. From the drug manufacturer's perspective, an MDL has both upsides and downsides. Multi-district litigation is the process in which many different federal lawsuits are temporarily consolidated to reduce the burden on the federal court system. While the cases remain separate, the temporary consolidation can help reduce the costs of the lawsuit and the time it takes to gather evidence (called discovery).
On the one hand, having a single judge managing the litigation can reduce costs for the manufacturer. It can also reduce the disruption that mass litigation can have on the day-to-day business. Executives generally prefer to avoid having to sit for deposition after deposition, which they would if the cases weren't coordinated. And because the MDL judge generally appoints a steering committee to represent the plaintiffs in all of the cases, the drug manufacturers' lawyers benefit from only having to negotiate and coordinate schedules with a handful of plaintiffs' lawyers.
On the other hand, MDLs can come with significant downsides for a drug manufacturer. For example, if the cases are transferred to an MDL judge who doesn't take a liking to them, the manufacturers may be disappointed by some of the rulings that would, in turn, apply to all of the cases. MDLs can also be more intrusive in that the plaintiffs are generally entitled to a broader range of information in an MDL than they would be in an individual case.
But the biggest potential downside of an MDL is the increased financial exposure. MDLs increase exposure for the companies in at least two ways. First, they are great for generating business for plaintiffs' lawyers. Once an MDL is created, you can expect the number of lawsuits will increase, maybe exponentially. This can massively increase the amount a company will have to pay if it wants to settle the litigation.
Second, and related, among the flood of cases that get filed will be many meritless cases. Unfortunately, some plaintiffs' firms are more concerned about signing up clients than they are about properly screening their cases. If they aren't careful, they may sign people up who never used the drug at issue or used it but suffered no harm. That means that the drug manufacturers may end up paying to settle some number of frivolous claims. So there are both sides to the argument,
Another interesting question is their take on the proposed MDL judge. Judge Cain hasn't handled an MDL before. He will be harder to read than judges with MDL track records. Also, Lake Charles, Louisiana isn't exactly convenient for either of the manufacturers; Novo Nordisk is in New Jersey and Eli Lilly is in Indiana.
FindLaw's Crystal Ball Says ...
Our prediction? As long as he agrees to handle the MDL, the Judicial Panel will create a diet drug MDL and transfer all federal cases to Judge Cain for coordinated pretrial proceedings. We'll place our bets and see.
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