While multinational pharmaceutical companies have been around for decades, there has been a recent shift in society’s view towards them as a whole, and their benefit (or detriment) to our way of life. In the early days of a new medical startup, the idea of curing disease or helping us live longer happier lives sounds like a noble goal, one that a company should be applauded for. Cures for rare diseases, the increasing life expectancy of developed nations, and even widespread vaccinations all stemmed from the growth of early pharmaceutical companies. Times change though, and the reputation of drug companies as well. As more and more of these companies merge, combine, move offshore (or try to) and get sued though, the perception changes. Now, the term “Big Pharma” is used as a negative, to reflect the out-of-touch companies that are more interested in making an extra dollar on the suffering of fellow humans than they are on curing cancer.
If recent medical mass tort lawsuits are any indication, this perception is only getting worse. Every day, drug companies are facing billions of dollars in lawsuits over their drugs, alleging everything from improper marketing and false advertising, to illegal kickbacks to doctors, to lying about toxic ingredients killing patients. These aren’t just small, relatively unknown drugs or companies either, household names like Merk’s Propecia, Johnson & Johnson, and Pfizer. All of these companies have paid out millions of dollars in class action settlements in recent years, with more to come as additional cases work their way through the multi-year litigation process. The rise of the Internet has made more and more people aware of the recalls and side effects of popular drugs, allowing more and more individuals to band together in class action lawsuits against drug-makers. Plaintiff’s drug attorneys are able to raise awareness, and clients, through social media and reach hundreds of victims at a time. Pro-consumer juries and judges are awarding record-breaking verdicts against the makers of “bad drugs”, in amounts that make the executives of these companies take note, lest they be sued out of existence by their own customers and shareholders.
Considering the all-out legal assault from angry victims and their attorneys in the U.S, it’s no wonder that many Big Pharma companies are looking to move offshore, both for tax reasons and likely to escape some of the anger aimed at them at home. As long as the bulk of their high-margin business and customer base is in the United States though, these companies will always be subject to legal action in their biggest market. Perhaps the rise of legal action against these companies will be a blessing in disguise in the long-term, as they strive to work harder to serve the customer instead of litigate against them.