Broader implications of Wyeth v. Levine rulings

The way things go in the courts might have more of an affect on how investors view pharma down the line than anything else.

Wyeth v. Levine in New Jersey Supreme Court case regarding Wyeth's drug, Phenergan.Take the case of the woman suing Wyeth over her arm amputation. When clinicians injected Wyeth's blockbuster anti-nausea medication, Phenergan, into her arm, she developed gangrene, which is a known side effect. She sued and won, but Wyeth appealed, and the case went to the Supreme Court.

The method of administration, an "IV push" has the rare side effect of irreversible gangrene if the drug enters an artery rather than the intended vein, which is what happened to the woman who lost her arm.

The woman is set to gain $6.7 million--a paltry sum for a lost arm and not much of a hit for Wyeth financially, but the drugmaker wants the ruling overturned nonetheless. Why? Because it opens the doors for state-level lawsuits over side effects for every drug on the market.    

It also calls into question who will hold the ultimate responsibility for drug labeling: drug companies or the FDA. Either way, pharma investors would be smart to keep their eyes on what is happening in the courts when looking at individual companies, but also for potential sweeping decisions. Patients, it seems, will have to do due diligence when it comes to pharma labeling for now--but that's no small task for patients suffering from nausea in the hospital. 

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