Justices split over ruling in drug fraud case
A divided Supreme Court is leaving intact a ruling favoring people who sued a pharmaceutical company, saying they had been harmed by a drug to combat diabetes.
The dispute stems from several suits against Warner-Lambert over its diabetes drug Rezulin. Warner-Lambert is now owned by Pfizer (PFE, Fortune 500). The Supreme Court split 4-4 in the case, with Chief Justice John Roberts not participating.
The users of the drug are relying on a Michigan law to allege that the pharmaceutical company engaged in fraud by misleading federal regulators to get the drug approved. The Michigan law shields pharmaceutical companies from product liability lawsuits, unless they committed fraud.
State vs payday loans. Fed At issue in the case is whether that fraud exception, which allows lawsuits to proceed, is pre-empted by federal regulation of the pharmaceutical industry.
The 2nd U.S. Circuit Court of Appeals in New York ruled that the exception to the Michigan law was not pre-empted by federal regulations, enabling the plaintiffs to pursue the case.
Twenty-seven Michigan residents say they suffered personal injuries caused by Rezulin, a drug that federal regulators approved despite risks to the liver and cardiovascular system.