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Even Sophisticated Big Pharma Legal Teams Often Agree to Settlements



If you've been injured by a defective drug, suing the pharmaceutical drug manufacturer may seem like a daunting prospect. After all, lawsuits can take months—or even years—to go to trial. And drug companies can surely afford to pay expensive lawyers to fight your lawsuit in court. You may be wondering: Is it even worth the effort to file a lawsuit? The answer is yes. And here's a little secret: You may be able to win your lawsuit without stepping foot in a courtroom.

Seroquel Settlement

Pharmaceutical company AstraZeneca PLC owns the antipsychotic drug Seroquel, which was found to cause diabetes in some people who took the drug.

In 2010, the first Seroquel lawsuit went to trial, and a jury found in favor AstraZeneca. The plaintiff, who claimed Seroquel caused his diabetes, walked away with nothing. And while it was the first jury verdict, it wasn't AstraZeneca's first Seroquel win. Judges had previously dismissed nine other cases and nearly 3,000 had been abandoned by the plaintiffs.

But the win came at a cost: AstraZeneca had already spent $650 million in legal fees related to Seroquel drug litigation. And it knew it was facing tens of thousands of additional cases—many of which it might likely win. What did the company do? It spent $647 million to settle 28,461 Seroquel claims. Ultimately, it decided that it was more cost-effective to settle the cases than to defend each one in the courtroom.

Settlement or Trial?

The pharmaceutical industry is a business, and, like any business, it exists to make money for its owners.

When a pharmaceutical company is sued, it typically does an in-depth analysis to decide whether to try to settle a lawsuit or take its chances in court. Among the factors the company will consider:

  • What is the likelihood that the company will win the lawsuit?
  • How much will the company pay in legal fees to defend the lawsuit in court? How much will the company pay in legal fees to settle the case?
  • If the company loses the lawsuit, how much money can the plaintiff expect to receive in damages? How much money would it cost to settle the lawsuit?
  • What are the advantages to the company of winning the lawsuit in court? What are the disadvantages if the company loses the lawsuit?
  • Does the company expect to be hit with similar or identical lawsuits? If so, how many lawsuits can be expected?
  • What kind of publicity can the company expect in connection with the lawsuit?
  • How will a lawsuit affect the company's stock price?

These are just some of the questions a drug manufacturer might ask and answer when deciding whether to try or settle a defective drugs lawsuit.

In the end, a manufacturer's decision often hinges on a single question: Will I pay less in legal fees, expenses and damages to settle this and similar lawsuits, or will I pay less to let the case be resolved in court?

Ultimately, the answer to that question will determine whether the pharmaceutical company offers you a settlement.

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