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Better that 99 go unaided than 1 be improperly treated March 5, 2009

Posted by federalist in Healthcare, Judiciary, Markets, Regulation.

Wyeth v. Levine struck me as a horrendous decision.  As the WSJ summarized from the dissent:

Justice Alito’s larger point is that “drug labeling by jury verdict” undermines the workability of the federal drug-labeling regime. Juries are presented with tragic plaintiffs who were injured, not the unknown patients who are helped, by a product. Hence, they tend to focus on risks more than overall benefits. By contrast, federal regulators are tasked to take the long view and factor in the interests of all potential users of a drug. 

The existing regulatory tax (i.e., the FDA approval process) on development and sale of drugs is already so high that consumers are certainly being harmed, being deprived of life-saving products that would otherwise be available to them.  This decision now allows individual states to unilaterally impose additional tort taxes, which harm the ability of interstate corporations and consumers to engage in mutually agreeable commerce.

I searched the blogosphere trying to understand how six of this Supreme Court’s judges could have backed this decision (best summary is here).  The only supportive analysis I could find suggested that this decision was really about federalism: preserving the rights of the states to not be preempted by the federal regulation.  But Overlawyered has a concise rebuttal to that notion:

Federalism is a two-way street, and permitting states to impair interstate commerce through a litigation tax upsets the federalist structure of the Constitution.

Stevens’ majority opinion notes, “Congress has repeatedly declined to preempt state law….”   So hopefully Congress can promptly close the floodgates of harmful litigation this decision just opened.



1. federalist - March 13, 2009

WSJ editorial:

The biggest price we may pay for a health-care system run from Washington are the therapies we never get as a result.

2. federalist - March 16, 2009

Gordon Crovitz also editorialized on the subject and approvingly noted a British invention:

In Britain, Parliament passed a law in 2006 authorizing judges to consider whether allowing a particular lawsuit to go ahead could “firstly, prevent a desirable activity from being undertaken at all, to a particular extent or in a particular way; or, secondly, discourage persons from undertaking functions in connection with a desirable activity.”

This law blocks lawsuits that challenge potentially risky but desirable activities, from school outings to scientific innovation. It also liberates British judges to think about the real-world impact of lawsuits.

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