Pharma giants nearly impossible to sue in Michigan. Democrats seek a change

• Michigan Democrats moving to repeal nation’s toughest drug immunity law that bars most suits over medication injuries
• The law prevents ‘residents from holding corporations responsible for injuring them or killing them or their family,’ says sponsor
• Industry groups contend bill treats drug companies as ‘villains’

LANSING — Thousands of patients across the country learned last week that they will share in a $425 million settlement with a drug manufacturer whose heartburn medication is linked to kidney damage.

But while other plaintiffs get up to $150,000 each, Mary Hanneman won’t see a dime, even though she developed stage four kidney disease following six years on Prilosec and will require dialysis and a transplant.

The reason: Hanneman lives in Michigan.

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Since 1995, the state's toughest-in-nation drug immunity law has provided a near total liability shield for drug manufacturers and sellers. The law generally bars residents like Hanneman from suing over medications that injure them and limits the ability of the state and local governments to participate in national litigation.

Citing the immunity law, a federal judge in February dismissed Hanneman and nearly 200 other Michiganders from the litigation against British pharmaceutical giant AstraZeneca, cutting Michiganders out of litigation eight months before the multi-million dollar settlement announced last week. (AstraZeneca admits no fault).  

"I don't really think it's fair," Hanneman, a 59-year-old Muskegon grandmother, told Bridge Michigan in an emotional interview.

"We should all be able to participate in (the settlement),” she said. “We're all suffering.”

Michigan Democrats, who have spent nearly three decades criticizing the Republican law adopted under then-Gov. John Engler, are now attempting to use their new and narrow majorities in Lansing to repeal the statute.

Legislation debated last week and set for a possible vote Thursday in the Senate Civil Rights, Judiciary, and Public Safety Committee would undo the law, giving Michigan residents, the state and local governments new power to sue drugmakers and sellers whose products cause injury. 

The repeal comes as liability settlements across all industries are ballooning, reaching a record $50 billion in 2022 amid a wave of lawsuits over the opioid crisis, some of which Michigan joined despite its immunity law. But judges have dismissed numerous other lawsuits because of the law.

Michigan is a "crazy outlier," sponsoring Sen. Jeff Irwin, D-Ann Arbor, told Bridge Michigan.

"This law has prevented countless residents from holding corporations responsible for injuring them or killing them or their family," Irwin added in committee testimony. "The state and its residents have lost millions, maybe billions of dollars as a result of this."

Democratic sponsors face opposition from business and industry groups that pushed for the  law in 1995. At the time, backers hoped to attract and retain pharmaceutical companies to the state. That hasn’t happened in large numbers, but Michigan remains home to Pfizer's largest manufacturing facility near Kalamazoo.

Repealing the law would unleash an "onslaught of new litigation against doctors, pharmacists and pharmaceutical companies," Wendy Block of the Michigan Chamber of Commerce, warned lawmakers last week.

Block noted the Michigan immunity law was designed to allow residents to sue over medication injuries if there is evidence the manufacturers intentionally deceived the U.S. Food and Drug Administration to win approval of the drug.

"Current law may not be perfect, but it appropriately seeks to strike a balance between recognizing that all prescription drugs have some risks associated with their use and the need to give Michigan residents an avenue to file a lawsuit if the FDA finds wrongdoing by a drug manufacturer,” Block said.

An ‘absolute defense’

Repeal advocates say any balance in the Michigan law was erased by a 2001 U.S. Supreme Court ruling that only the FDA can determine if a drugmaker misled it, undermining a state exception that had allowed lawsuits in limited instances. 

The fight over the law has intensified since 2003, when the Michigan Supreme Court rejected a lawsuit from residents who suffered heart disease after taking “fen-phen” diet drugs. 

In its ruling, the court found the immunity law gave manufacturers an "absolute defense" to liability claims if the drug and labeling were in compliance with prior FDA approval at the time of production.

Experts say that ruling left Michigan as the only state in the country that cannot recoup Medicaid funds spent on caring for residents injured by a medication.

In 2011, the Michigan Court of Appeals cited the immunity law to dismiss a $20 million lawsuit that Republican Attorney General Mike Cox brought against Merck over Vioxx that was approved by the FDA to treat arthritis but was later shown to increase the risk for heart attacks. 

Merck later agreed to pay $950 million in a federal settlement over the drug.

Plaintiffs have not fared much better in other states or federal court, where judges blocked Michiganders from a settlement over an antipsychotic medication called Risperdal that caused enlarged boys’ breasts and dismissed a suit by a woman whose liver was "destroyed" by a pain medication, among others. 

Having to tell a Michigander injured by a pharmaceutical drug that they cannot sue or be part of national settlements is “one of the hardest things that I've had to explain to clients,” said Tiffany Ellis, a Detroit-based attorney whose Weitz & Luxenberg, P.C. law firm represented Hanneman in the AstraZeneca lawsuit. 

“Most Michigan consumers can never even find a law firm that will take these cases, because the law is almost a total shield,” Ellis said.

Prior efforts to repeal Michigan’s drug immunity law have failed despite some bipartisan support including in 2006, when a GOP-sponsored bill passed the House but was blocked by the Republican-led Senate.

The new legislation has high-profile backers, and “I'm hoping that this will be a good bipartisan win,” said Sen. Stephanie Chang, D-Detroit, who co-sponsored the repeal bill and chairs the Civil Rights, Judiciary, and Public Safety Committee.

Michigan Attorney General Dana Nessel, a Democrat, is advocating for repeal of the drugmaker immunity law. She said the law has prohibited her from individually suing companies that played a role in "creating the opioid epidemic."

To avoid dismissal of opioid litigation, Nessel’s office employed treated distributors as drug dealers and sued them for creating a public nuisance rather than attempt to sue manufacturers for product safety. 

Michigan was ultimately able to join national settlements that will bring more than $1.5 billion to local communities ravaged by the opioid crisis. 

But “the existence of this unique provision greatly complicated that approach,” said Jason Evans, corporate oversight division chief for the attorney general.

“By ending this immunity, Michigan will be placed in the same position as every other state in the country," Evans told lawmakers last week. "This isn't a red state, blue state thing. This is a Michigan-is-different-from-everyone-else thing."

Whitmer, industry groups at odds

Michigan Gov. Gretchen Whitmer has spent more than a decade criticizing the state’s drug immunity law, promising to try and repeal the law as part of her 2018 campaign.

The Democrat bashed the law as a state senator in 2010, arguing it "puts drug company profits ahead of justice for our people” and treats Michiganders like “second-class citizens — second to every other state.”

While her office does not usually comment on pending legislation, Whitmer spokesperson Stacey LaRouche this week told Bridge that the governor opposed the law as a legislator and “has been working ever since to get justice for those who have been harmed.”

Repeal would be far from a blank check for residents who sue drugmakers, said Ellis, the Detroit-area attorney. 

She noted Michigan’s product liability law also includes a “rebuttable presumption” provision that assumes manufacturers are not liable for injuries unless proven otherwise. 

That presumption is stricter than many other states and would still make it “very difficult” to prove fault, Ellis told Bridge. But Michigan’s drugmaker immunity law stands alone, she said. 

“Michigan is not only the only state that has this law, Michigan is the only state that has ever had this law,” Ellis said.  

Industry groups, however, argue full repeal would go too far. 

The legislation amounts to "yet another assault on Michigan's life sciences industry" and would create a business environment that "unduly burdens" companies here, Stephen Rapundo, president and CEO of the Michigan Biosciences Industry Association, told lawmakers in written testimony.

"Advocates for repeal would have one believe that pharmaceutical manufacturers – whose work saves millions of lives – are villains," he said. "They are not."

Repealing the law would lead to more lawsuits, which would increase drug costs while also discouraging doctors from prescribing medications that are subject to litigation even if those cases fail, Rapundalo argued. 

"Eliminating immunity and returning the risk of uncertainty inherent with any drug to the manufacturers, sellers and providers may feed popular notions of consumerism, but is not without further risk for consumers," he said. 

Short of complete repeal, Michigan could instead consider amending the existing law to clarify existing exceptions to the immunity shield that allow consumers to sue, said Cary Silverman of the American Tort Reform Association, a national organization that advocates for policies to reduce lawsuits.

Requiring the FDA to confirm it was "intentionally" misled by a drugmaker, as courts have interpreted the Michigan law, is a high hurdle, he acknowledged. 

But the overall law is sound because it relies on the FDA “to decide what medications are available to us and helps ensure that the risks presented on labels are substantiated by science and expertise and not exaggerated by faulty information," he said. 

The alternative, Silvermann said, would be to “decide these complex issues on a case-by-base basis in the context of individual lawsuits that often have hired-gun experts on both sides. That's not the best process."

As introduced, the repeal legislation would not apply retroactively, meaning Michiganders previously injured by a medication would not gain new rights to sue the manufacturer or seller. 

But for Hanneman, a Medicaid recipient whose kidney function is at 19 percent and dropping, changing the law is a matter of justice.

“Michigan shouldn't be the only state that is left out of something like this,” she told Bridge, referring to the $425 million AstraZeneca settlement she missed out on. “It's not fair to everybody that has issues. It's just not fair.”