Jury slams Teva, Baxter with $500M in damages

A district court jury in Nevada has ordered Teva Pharmaceutical Industries (NASDAQ: TEVA) and Baxter International (NYSE: BAX) to pay a combined $500 million--the largest such award in state history--to plaintiffs who contracted hepatitis C after vials of the anesthetic propofol were reused. Both companies--Teva as manufacturer and Baxter as distributor--say they will appeal.

The plaintiff's lawyers argued that the drug vials weren't packaged with adequate warnings against their use for more than one patient. The lawyers also said that the 50 mL vials shouldn't have been sold to endoscopy centers in the first place because nurses were too tempted to reuse them rather than throw away the substantial leftovers. Teva and Baxter blamed the outbreak on clinical procedures. "The label for [Teva's] propofol product clearly states that it is for single patient use only and that aseptic procedures should be used at all times," the company says in a statement. 

It was the first civil case spawned by that outbreak of disease; hundreds of other lawsuits remain. If juries are willing to award such high punitive damages in the others, both Teva and Baxter could be in big trouble. But appeals courts could take the companies' side--in recent years, some big punitive-damages awards levied against drugmakers have been struck down on appeal.

Teva, at least, says it's well prepared for an appeal. "Teva believes that there are numerous grounds for appeal, and plans to contest the verdict vigorously," the company says. 

- see the statement from Teva
- get the Review-Journal story