Axen v. American Home Products Corp. ex rel. Wyeth-Ayerst Laboratories

• Decision Date: 10 February 1999
• Docket Number: WYETH-AYERST
• Citation: 158 Or.App. 292,974 P.2d 224
• Parties: Douglas J. AXEN and Sandra Axen, Respondents, v. AMERICAN HOME PRODUCTS CORPORATION through its pharmaceutical division,LABORATORIES, Appellant, State of Oregon and Wal-Mart Stores, Inc., Defendants. 9509-06363; CA A97249.
• Court: Oregon Court of Appeals

Page 224

974 P.2d 224

158 Or.App. 292

Douglas J. AXEN and Sandra Axen, Respondents, v. AMERICAN HOME PRODUCTS CORPORATION through its

pharmaceutical division, WYETH-AYERST

LABORATORIES, Appellant,

State of Oregon and Wal-Mart Stores, Inc., Defendants.

9509-06363; CA A97249.

Court of Appeals of Oregon.

Argued and Submitted Oct. 22, 1998.

Decided Feb. 10, 1999.

John G. Kester, appearing pro hac vice, argued the cause for appellant. With him on the briefs were John W. Vardaman, Robert J. Shaughnessy and Helen I. Dooley of Williams & Connolly, Washington, D.C., and Karen O'Kasey, Margaret Hoffmann and Schwabe, Williamson & Wyatt, P.C.

John Paul Graff argued the cause for respondents Douglas J. Axen and Sandra Axen. With him on the brief were Jeffrey B. Wihtol and Graff & O'Neil.

Before WARREN, Presiding Judge, and EDMONDS and ARMSTRONG, Judges.

ARMSTRONG, J.

Defendant American Home Products Corporation (AHP) ¹ appeals from a judgment holding it liable for damages suffered by Douglas Axen. A jury awarded Axen $407,265.75 in economic damages and $1.5 million in noneconomic damages. The jury also awarded Axen's wife, Sandra Axen, $936,392 in damages for loss of consortium. In addition to the compensatory damages, the jury awarded Douglas Axen $20 million in punitive damages.

Because the jury returned a verdict in plaintiffs' favor, we view the evidence and all inferences that reasonably may be drawn from it in the light most favorable to plaintiffs. Greist v. Phillips, 322 Or. 281, 285, 906 P.2d 789 (1995). In 1994, Douglas Axen was diagnosed as having a heart condition for which his doctor prescribed amiodarone, a drug manufactured and distributed by AHP under the trade-name "Cordarone." The federal Food and Drug Administration (FDA) had approved amiodarone for medical use in 1985, at which time AHP began marketing Cordarone. Beginning in 1986, medical studies were published that linked amiodarone with vision loss and optic neuropathy. AHP was aware of those studies. In August 1994, when Axen began taking Cordarone, the package insert listed "optic neuritis," or optic nerve inflammation, as a rare adverse reaction occurring in fewer than one percent of the patient population, but it did not mention optic neuropathy. Neither the package insert nor any of AHP's promotional material listed permanent vision loss as a possible side effect of amiodarone use, nor did any of AHP's materials recommend regular opthamological examinations while using amiodarone.

At some time in September 1994, Axen began to notice changes in his vision. The changes became more noticeable in late October 1994, and he complained of them to his cardiologist. His cardiologist referred him to an opthamologist, who examined his eyes and discovered optic nerve swelling and hemorrhaging in each eye. The opthamologist believed that the eye conditions were caused by amiodarone. On November 7, 1994, Axen's cardiologist called Axen and recommended that he stop taking the drug. Although Axen stopped using Cordarone, ² his vision continued to deteriorate to the point that he became legally blind. Axen eventually was diagnosed as suffering from amiodarone-induced toxic optic neuropathy, which resulted in irreversible degeneration and atrophy of the optic nerve in each eye.

Axen brought this action, claiming, inter alia, that AHP had failed to warn that its product could cause permanent vision loss and that that failure to warn was intentional and was done with reckless disregard for the health and well-being of the people using the drug. Sandra Axen joined in the action, claiming economic and noneconomic damages for loss of consortium. The case was tried to a jury, which awarded the Axens a total of $22,843,657.75 in compensatory and punitive damages. ³ AHP appeals from the judgment based on that verdict, claiming that the trial court erred when it (1) allowed admission of overly prejudicial evidence of uncharged misconduct; (2) denied AHP's motion for a directed verdict on plaintiffs' claim that AHP had been negligent in failing to report certain medical studies to the FDA; (3) failed to apply the damages cap required by ORS 18.560; ⁴(4) held that Sandra Axen could seek damages for lost earnings as part of her claim for loss of consortium; (5) failed to grant AHP's motion for a preemptory instruction on punitive damages; (6) allowed a punitive damage award in a proceeding that failed to comply with due process; and (7) approved a punitive damage award that was unconstitutionally excessive. We affirm in part and reverse in part.

In its first assignment of error, AHP contends that the trial court erred by admitting as evidence two letters from the FDA to AHP and a press release from United States Senator Edward M. Kennedy. The letters and the press release all referred to AHP's marketing of Cordarone and took AHP to task for over-promoting its product.

The FDA letters were admitted for the limited purpose of proving punitive damages. The first letter from the FDA to AHP was dated December 15, 1989. The version submitted to the jury was redacted pursuant to AHP's request and reads, in pertinent part:

"Dear Dr. Canavan: ⁵

"Please refer also to your current promotional campaign for Cordarone (amiodarone HCl).

"These promotional campaigns by your firm have presented and continue to present false and/or misleading information regarding the safety and/or efficacy of these products, thereby resulting in misbranding of these products under the Federal Food, Drug and Cosmetic Act.

"Cordarone (amiodarone HCl)

"Cordarone is indicated only for treatment of documented, life-threatening recurrent ventricular arrhythmias (recurrent ventricular fibrillation, recurrent hemodynamically unstable ventricular tachycardia) when these conditions have not responded to documented adequate doses of other available antiarrhythmics or when alternative agents cannot be tolerated. Cordarone is clearly labeled as an antiarrhythmic of last resort.

"The Indications section also makes clear that Cordarone should be administered only by physicians who are expert in the treatment of recurrent life-threatening arrhythmias. The labeling contains an extensive boxed warning that cautions against the use of the drug because of the extreme risks associated with its use. This extraordinarily cautious labeling accurately reflects the opinion of the medical community that Cordarone is an antiarrhythmic of last resort.

"Prior Warnings Regarding Cordarone Promotion

"Your firm has been warned repeatedly against promoting the drug in a manner inconsistent with this cautionary labeling, with the most recent instance being an extensive telephone discussion between DDAL and two representatives of your firm on February 17, 1989. In that conversation, DDAL advised your firm that the content and emphasis of then-current journal advertisements for Cordarone were fundamentally inconsistent with the content and emphasis of the approved labeling for this product.

"Your representatives suggested that prescribers are already aware of hazards associated with the use of Cordarone, thereby minimizing the need for maintaining this cautionary tone in your promotional activities. DDAL emphasized that certain prescribers may not be familiar with these hazards, and other prescribers might infer from your advertising that Cordarone has been demonstrated to be safer than originally believed. As you know, the labeling for Cordarone has not undergone substantive change since approval, and the agency's original concerns regarding safety of Cordarone have been substantiated.

"Current Promotional Activities

"Review of a current advertisement for Cordarone (3441-3, published in an October, 1989 journal) indicates that our cautions have been ignored by your firm. The advertisement is clearly intended to minimize the hazards of the drug and emphasize the drug's efficacy. Ad number 3441-3 is listed as having been last revised on January 2, 1987.

"This follows your use of brochure number CDR152 (submitted by your firm on May 25, 1989) in which you also minimize hazards associated with the administration of Cordarone, by suggesting that it is possible to administer the drug in a manner that eliminates the need for concern over these hazards.

"Moreover, the primary efficacy claim in this piece is an unapproved use of Cordarone. Your statement that 'an early decision for Cordarone * * * can improve the odds' clearly fails to recognize the drug's unique role as a drug of last resort.

"In brochure number CDR172 (submitted by your firm on August 23, 1989), a single case study is presented which suggests that Cordarone is readily tolerable. At no point in the piece is Cordarone described as a drug of last resort.

"Your firm's ongoing false and misleading promotional activities for Cordarone cause it to be misbranded under sections 502(a), 502(f), 502(n) and 201(n) of the Federal Food, Drug and Cosmetic Act.

"Conclusion

"Your firm has an intolerable record of compliance with the law, compounded by your recent promotion of Cordarone. * * * Your firm continues to promote Cordarone, an extraordinarily hazardous drug, in a manner we consider clearly misrepresentative of its known hazards.

"We intend to ensure, by all available regulatory means, that your firm complies with the law, and with the widely-accepted scientific principles incorporated therein, so that health care providers and their patients can benefit from promotional information that will further, rather than thwart, their efforts to make informed product selection decisions."

The FDA letter then listed a number of actions that the agency required AHP to take in order to alleviate the perceived defects in its promotional materials and stated that, if AHP failed to provide a satisfactory response, the agency was "prepared to recommend legal action, which may include seizure, injunction, and/or criminal prosecution."

The second FDA letter was received by AHP on ...