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Manufacturers Should Bear The Costs Of Their Harmful Drugs

What is needed across Canada now is a legal regime that has real consequences for pharmaceutical companies.

08/18/2017 14:53 EDT | Updated 08/18/2017 14:55 EDT

Recently, 10 provincial governments have accepted a class-action settlement with Purdue Pharma, the maker of OxyContin. The settlement concerns the misleading claims Purdue Pharma allegedly made to physicians about the addictive nature of the drug. These claims may have contributed to Canada's current epidemic of opioid addiction.

George Frey / Reuters
Bottles of prescription painkiller OxyContin.

The settlement of $20 million, including $2 million to the provinces, is widely considered to be insufficient to address the costs associated with this epidemic. If all courts approve the settlement, as an Ontario court did last month, Canadians will be responsible for covering the mounting costs associated with opioid addiction.

So why settle?

One reason the provinces have accepted this inadequate settlement is because they were lumped into a class action lawsuit brought by a group of Canadians addicted to OxyContin.

Although it may be too late to change the outcome in this case, we propose two solutions to increase pharmaceutical manufacturers' accountability to Canadians and their governments. Indeed, if provincial governments have more latitude to sue and patients have an easier access to the courts, the Canadian legal climate may more efficiently deter drug manufacturers from making unfounded claims about their products.

What is needed across Canada now is a legal regime that has real consequences for pharmaceutical companies.

The first proposal is to pass provincial legislation across the country giving the government legal authority to bring an action against pharmaceutical companies (or drug manufacturers) to collect hospital, medical and other costs resulting from illnesses related to a company's actions.

The provincial governments can look to the provincial tobacco recovery laws — which allow a provincial government to collect hospital, medical and other costs resulting from tobacco-related illnesses such as cancer, heart disease and stroke — for guidance. The laws set out a number of evidential and procedural rules facilitating recovery of compensation for such costs. For instance, they can provide for a reverse burden of proof so that it is up to the defendant manufacturer to prove that its actions did not give rise to the disease for which the province claims expenditures.

Although certain aspects of these laws would have to be modified, the key principle would be the same: the province could directly start a legal action to recover the cost of health-care costs related to the wrongful actions of drug manufacturers. The Supreme Court of Canada confirmed the constitutionality of tobacco recovery laws in 2005.

The second proposal is to make it easier for more Canadians to succeed in class-action lawsuits. Class actions allow claimants to join together to sue a party and, as a result, reduce individual litigation costs. Quebec, the country's most progressive province regarding consumer protection, has made class actions more accessible by lowering the burden imposed on claimants who wish to bring a class action for harm they have suffered. Unlike the common-law provinces, Quebec's procedural rules make it easier for claimants to achieve class action status. Claimants need only demonstrate that they have an arguable case and it is assumed that the facts they allege are true.

There is a strong history of successful class actions in Quebec. Indeed, a Quebec court recently awarded $15 billion in damages to members of two class actions launched against the tobacco industry for their failure to warn consumers about the health effects of their products.

What is needed across Canada now is a legal regime that has real consequences for pharmaceutical companies. Until we raise the costs associated with wrongdoing in Canada, companies will continue to act with impunity — with real-life consequences. And Canadians left to pick up the tab for health care.

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