Earlier this week, Takeda Pharmaceutical Co. was ordered to pay $6 billion in punitive damages by a jury in Lafayette, Louisiana. Eli Lilly, Takeda’s co-promotion partner, was ordered to pay an additional $3 billion. The jury found that Takeda hid the risks that Actos, its multibillion dollar diabetes medicine, put patients at a higher risk of bladder cancer. A $1.475 million compensatory award also was granted in addition to the combined $9 billion in punitive damages.

In January, Judge Rebecca Doherty ruled that Takeda acted in “bad faith” and destroyed documents that showed Takeda knew Actos could increase the risk of bladder cancer in patients. Despite a litigation hold issued in 2002 that required retention of all documents and electronic data related to Actos, the court found that documents were destroyed as late as 2011. As a penalty for failing to preserve documents in accordance with the litigation hold, Judge Doherty instructed the jurors that they could infer the destroyed evidence supported the plaintiff’s claims.

Forty-six Takeda employees had documents that were deleted from company computers following the 2002 litigation hold and a subsequent communication that was distributed specifically instructing employees to retain Actos-related documents.  These forty-six employees include former and current employees, as well as employees at all levels of the organization involved in the development, marketing, or sale of Actos, including Directors, Presidents and Vice Presidents, and sales personnel. Judge Doherty stated in January, “The breadth of Takeda leadership whose files have been lost, deleted or destroyed is, in and of itself, disturbing.”

Health care companies should closely evaluate their own company policies, procedures and practices related to the distribution of litigation hold notices and retention of potentially responsive documents.  Procedures related to departing employees and email retention practices should be scrutinized.  Companies also should ensure that its IT professionals in particular are educated and understand litigation hold expectations so that they can be a critical resource for the Legal department.

Thank you to Zach Schreiber, an associate in Cooley’s New York office, for his significant contributions to this blog post.  

Posted by Cooley

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