Toole v. Richardson-Merrell Inc.

• Citation: 60 Cal.Rptr. 398,251 Cal.App.2d 689
• Decision Date: 12 June 1967
• Docket Number: RICHARDSON-MERRELL
• Parties: , 29 A.L.R.3d 988 Allen D. TOOLE, Plaintiff and Respondent, v.INC., Defendant and Appellant. Civ. 23181.
• Court: California Court of Appeals

Page 398

60 Cal.Rptr. 398

251 Cal.App.2d 689, 29 A.L.R.3d 988

Allen D. TOOLE, Plaintiff and Respondent, v. RICHARDSON-MERRELL INC., Defendant and Appellant.

Civ. 23181.

Court of Appeal, First District, Division 3, California.

June 12, 1967.

Rehearing Denied July 12, 1967.

Hearing Denied Sept. 7, 1967.

Bronson, Bronson & McKinnon, Harold R. McKinnon, San Francisco, Lawrence E. Walsh, Richard E. Nolan, Alfred E. Schretter, Davis, Polk, Wardwell, Sunderland & Kiendl, New York City, for appellant.

Herron & Winn, John Wyn Herron, Dennis B. Conklin, San Francisco, for respondent.

Paul D. Rheingold, Trustee, Mer/29 Group, Speiser, Shumate, Geoghan & Krause, New York City, amicus curiae in support of contentions of respondent.

SALSMAN, Associate Justice.

Appellant Richardson-Merrell Inc. ¹ appeals from a judgment on a jury's verdict awarding respondent Toole $175,000 general damages and $500,000 punitive damages for injuries suffered as a result of the use of a drug manufactured and marketed by appellant and prescribed for respondent's use by his physician. The trial court granted appellant's motion for a new trial solely on the issue of punitive damages, unless respondent consented to remission of $250,000 of the punitive damage award. Respondent consented to the remission, and a new trial was denied. On appeal, appellant challenges both aspects of the judgment.

Respondent, 43 years of age, developed cataracts in both eyes as a result of taking the drug triparanol, manufactured and sold by appellant under the trade name of 'MER/29'. Acting under his doctor's direction, he began use of MER/29 in July 1960. He developed a condition known as ichthyosis, characterized by dry, flaky, red and inflamed skin. He also suffered hair loss over his entire body. He stopped use of the drug in December 1961. His skin returned to normal, most of his hair regrew, but cataracts developed, his eyes became opaque, and it was necessary to operate and remove the lenses of both eyes. His sight is now distorted, peripheral vision is reduced, his eyes have lost their ability to adjust for distances, are painfully sensitive to light, and he is required to wear corrective glasses. There was also evidence that he is now more apt to suffer detached retinas which could lead to blindness. He has an emotional overlay of fear that the drug may have some long-term ill effect that may manifest itself later in life.

MER/29 was supposed to aid in the treatment of arteriosclerosis, commonly described as a 'hardening of the arteries'. This condition is thought by some physicians to be caused, in part at least, by the presence of too much cholesterol in the blood, and to be a contributing factor in cases in heart attack and stroke. The purpose of MER/29 was to inhibit cholesterol production in the body and thus aid in the prevention of illness and death from heart attacks and strokes. But there was also evidence that, where MER/29 did inhibit the production of cholesterol, it caused an unnatural accumulation of desmosterol, which formed deposits in the arteries just as cholesterol did. Because of this, MER/29 was not considered by some physicians as a rational approach to the treatment of arteriosclerosis.

Appellant's Administrative Organization

Before relating the evidence concerning the development and promotion of MER/29 and appellant's knowledge of its toxic effects, it is important to understand appellant's administrative organization and the responsibilities of its officers and agents in the development, testing and marketing of the drug.

MER/29 was developed by the Wm. S. Merrell Co., Inc., a division of appellant Richardson-Merrell Inc. Frank N. Getman was president of the division; Robert Woodward was executive vice president (succeeded later by E. R. Beckwith, Jr.); Dr. Harold Werner was vice president and director of research; Phillip Ritter was vice president in charge of marketing, and Dr. Joseph Murray was liaison officer to the Food and Drug Administration, ² working under Vice President Werner. Below this level of management were two divisions. One, the Medical Science Division, was headed by Dr. Pogge, assisted by Drs. Bunde and McMaster, the latter in charge of medical research on MER/29. The other division was the Biological Science Division, in charge of Dr. Van Maanen. This division had five departments, one of which was the Toxicology Department headed first by Knox Smith and later by William King. Mrs. Beulah Jordan also worked in the Toxicology Department, and under the direction of Mr. King and Dr. Van Maanen compiled some of the records hereafter mentioned.

The Evidence

Appellant's Toxicology Department began animal testing of MER/29 in 1957. In the first six-week test, all female rats on a high dosage died. All were found to have suffered abnormal blood changes. There was evidence that unusual blood changes in animals tested with drugs are regarded as a major danger signal.

A second rat study was begun, using a reduced dosage of MER/29. This test also produced abnormal blood changes in the rats. Vice President Werner was informed of these results.

In 1958 William King was hired by appellant and put in charge of the Toxicology Department, replacing Knox Smith. He was assigned to review the blood findings reported in the rat tests conducted by Smith.

In March 1959 a test of MER/29 in monkeys was completed. Again, abnormal blood changes were found. But Dr. Van Maanen ordered Mrs. Beulah Jordan, the laboratory technician, to falsify a chart of this test by recording false body weights for the monkeys, by extending their records beyond dates after which the monkeys had been killed, and by adding data for an imaginary monkey that had never been in the test group at all. Mrs. Jordan protested to King but was told: 'He (Van Maanen) is higher up. You do as he tells you and be quiet.'

Knox Smith had prepared a brochure reflecting Merrell's test results of MER/29 on rats. This literature was intended for use of medical doctors clinically testing the drug on human beings. King revised this brochure, and eliminated all reference in it to the abnormal blood findings previously recited. Dr. McMaster, of the Medical Science Division, who was in charge of medical research on MER/29, had knowledge of the deletions, and consented to them.

On July 21, 1959 appellant filed a new drug application with the FDA seeking permission to place MER/29 on the market. The application contained many false statements, among them these:

(1) It was reported that only four out of eight rats had died during a certain study, whereas in truth all had died.

(2) Wholly fictitious body and organ weights and also blood tests were reported for dead rats as if they had continued to live and to take MER/29.

(3) None of the abnormal blood changes encountered in experiments was disclosed.

(4) False data was related for a monkey being tested with the drug, and also data was stated for a monkey that was never part of the test group.

(5) The falsified chart, prepared by Mrs. Jordan under protest was included in the application.

At the time appellant filed its new drug application it knew that MER/29 would require long-term use, because when use was discontinued cholesterol levels rose, but appellant had no data on the long-term effects of MER/29 in humans. At the time of its new drug application only 116 persons had taken MER/29 on an experimental basis, and none had used the drug for more than six months. There was evidence that before a drug such as MER/29 is marketed initial studies should be made to establish its toxicity, followed by a three-year test in humans, to be followed by a final period of testing in humans before placing the drug on the market.

The FDA informed appellant that its new drug application was incomplete; that a low margin of safety was indicated and that a two-year study in rats and a three-month study in dogs should be undertaken. This information was conveyed to President Getman and the vice-presidents and division heads under him. Dr. Murray, appellant's liaison officer, replied to the FDA and specifically informed it that there had been no blood changes in appellant's tests of MER/29 on rats or monkeys, and that a 16-month study in monkeys had adequately demonstrated the safety of MER/29. These statements concerning absence of blood changes in animals were of course untrue.

While appellant's new drug application was pending, it arranged a conference, held at Princeton, New Jersey, to which research doctors were invited to discuss MER/29. King read a paper to the group entitled 'The Toxicology of MER/29.' No mention was made by him of the abnormal blood changes discovered in test animals, but the false statements previously noted about weights and dosages of MER/29 given to monkeys were recited. President Getman had knowledge of this meeting and later referred to it as '* * * the most terrific selling tool that Merrell has ever had.'

In January 1960 appellant completed another study on the effect of MER/29 in rats. Nine out of ten rats in this study developed eye opacities. Appellant's report to the FDA of the results of this study was false or misleading because it reported that eight out of twenty rats had developed mild inflammation of the eye, but did not disclose the eye opacities seen in the test animals.

In February 1960 appellant reported to the FDA the results of its tests of MER/29 in dogs. One dog in the test group developed eye opacities and blindness, but again this information was eliminated from the report to the FDA. In the same month, appellant completed a long term test of the drug used in rats. Of 36 test rats in this group, 25 developed eye opacities. The results of this test were also withheld from the FDA.

In April 1960 the FDA granted appellant's application to market MER/29. There was testimony at trial, however, that placing the drug on the market at that time was not in line with the...