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U.S. House Rewards Pharmaceutical and Medical Negligence; Punishes Victims

July 28, 2005

U.S. House Rewards Pharmaceutical and Medical Negligence; Punishes Victims

Statement by Joan Claybrook, President, Public Citizen

The House vote today (230-194) to shield the medical industry from accountability for negligence is an abhorrent abuse of federal power that shifts costs from wealthy corporate interests to patients who are severely injured by defective drugs, medical devices or poor medical care.

Physicians who are supporting this legislation, H.R. 5, are being scammed, because it would do nothing to bring down their high medical malpractice insurance rates. Study after study has shown that the driving forces behind rising malpractice premiums are the economic cycle and the business decisions made by insurers. The so-called “crisis” of patients lawsuits is pure fiction. In fact, both the number and the total value of malpractice payouts to patients has remained flat since 1991 and has significantly declined since 2001, when adjusted for medical inflation.

Rather than punishing innocent victims by arbitrarily capping malpractice payments, Congress should seek to reduce medical mistakes and scrutinize the practices of malpractice insurers, who are taking advantage of captive clients, weak competition and lax regulation to more than make up for disappointing investment returns.   From 2000 to 2004, the top 15 malpractice insurers, on average, raised their rates by 120 percent while payouts increased only 5 percent.

But while malpractice rates have begun to stabilize due to the improved economic climate, the Republican-led House has voted to slash the legal rights of people whose lives are devastated by medical negligence. This legislation would usurp the role of state juries and judges by slapping an arbitrary, maximum price tag of $250,000 on the pain and suffering of severely injured victims, even when they are blinded, paralyzed, disfigured, irreversibly brain-damaged or left to cope with the death of a child or spouse. Because only the most seriously injured patients ever collect pain and suffering awards greater than $250,000, the damage caps harm them the most. It also would exempt pharmaceutical companies from the threat of punitive damages as long as their products meet FDA compliance – which all of the products they sell do – despite revelations that the FDA has been ineffective in overseeing drug safety. It also would lift the threat of punitive damages from nursing home corporations whose reckless hiring practices render ailing, elderly residents more vulnerable to abuse.

But the bill will do nothing to address the fact that as many as 100,000 people a year die from preventable medical errors in hospitals alone – or the fact that just 5.5 percent of doctors now account for 57 percent of malpractice payouts. It will only increase hardship for innocent people seeking justice once the damage is done. The Senate should reject this blatantly anti-patient bill.