Compensation matters: What is it about the West that compensation amounts to million-dollar suits, while in India, patients are left with a pittance?

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New Delhi | Updated: October 07, 2018 1:12 PM

Pharma giant Johnson & Johnson recently agreed to pay Rs 20 lakh as compensation to patients in India who suffered due to its faulty hip implants. In the US, however, the company agreed to pay an estimated $2.5 billion to 8,000 patients in the same case.

What is it about the West that compensation amounts to
million-dollar suits, while in India, patients are left with a pittance? (Reuters)

It’s an advertisement that was carried in all leading dailies last week. With the header as ‘Attention’, the notice asks patients with ASR (articular surface replacement) hip implants by DePuy International, a subsidiary of pharma giant Johnson & Johnson (J&J), to follow up with their orthopedic surgeons for evaluation of their hip implants regularly. The notice further says that the government has constituted a central expert committee and state level committee to address concerns and assess the compensation claims of eligible patients in respect of the ASR hip implants.

But Mumbai resident and patient Vijay Vojhala isn’t amused. “It’s complete eyewash. What are they going to achieve by such an advertisement? They are playing with our pain and the government is in cohorts with them,” an anguished Vojhala alleges. “The moment you call the helpline, you are asked to fill a form and email it to the company. And then, there is endless wait. At least that’s what has happened till now,” the 44-year-old claims.

Mumbai-based Vijay Vojhala is among the 4,700 patients in India who had Johnson & Johnson hip implants between 2006 and 2010.

Vojhala has a bone to pick with J&J. In 2008, he had undergone a hip implant and, as suggested by his orthopedic surgeon, went with the J&J product. But a few months after the surgery, he started experiencing excruciating pain along with a pronounced limp, reducing his mobility drastically. A medical representative with a multinational, Vojhala then had a chance meeting with an orthopedic surgeon in a medical conference and that changed his life completely. “He told me about the defective implant and how it has been recalled globally. He suggested that I undergo tests to check the cobalt and chromium levels in my body,” he says. Tests revealed that he was suffering from various side-effects of the defective device and, after living for two years with a defective implant, he underwent a revision surgery.

The case in question isn’t new. And it’s not one restricted to India. In 2010, ASR hip implants were globally recalled by J&J. The device, comprising ASR XL Acetabular Hip System and ASR Hip resurfacing system, was first introduced in India in 2006. The company renewed its registration certificate for the product in 2009, even as it had begun recalling the product in Australia the same year. The recall in Australia happened after an analysis by the Therapeutic Goods Administration, the Australian regulatory body under the department of health, indicated that it had a higher-than-average replacement rate. In 2010, it was recalled from the US and UK market as well, but it took Indian regulators two more years to ban its import and cancel the product licence. “And now, after so many years, they have come up with a joke of a compensation amounting to Rs 20 lakh. What sort of justice is this?” asks Vojhala.

Redressals & reimbursements
Vojhala is among the 4,700 patients in India who underwent J&J hip implants between 2006 and 2010. It was only at the persistence of a few patients like him that the Indian government finally formed a committee. “I wrote to several politicians, the state health minister and CM, central drug controller, National Human Rights Commission and where not,” he says.
The committee, which was formed in 2017, recommended that J&J be made liable to pay at least Rs 20 lakh to each affected patient, and that the reimbursement programme for revision surgeries should continue till August 2025. Though the committee had submitted its report in February this year, it was only after patient outcry that the outcome was made public. “The constitution of the committee is pointless, as it only has medical and pharma professionals. Ideally, they should have had a social scientist, human rights expert, an academic and social scientist besides aggrieved patients and doctors,” says Malini Aisola, co-convenor, All India Drug Action Network, a public health group that works for patient rights.

The implants in question are metal devices, with components of cobalt, chromium and molybdenum. When the metal debris flakes off and enters the bloodstream, it leads to an increase in cobalt and chromium in blood, resulting in blood toxicity and metallosis that can lead to several issues like deafness, thyroid problems, nerve problems, heart problems and even death due to multiorgan failure.
In 2013, J&J agreed to pay an estimated $2.5 billion to 8,000 US patients for the defective hip implant. The compensation, tipped to be the highest ever for any medical device, came after thousands of lawsuits were filed by individuals allegedly affected by the company’s product. “The compensation in the West points towards damages that value life. Here, the drug controller and the pharma giant seem to be in cohorts,” alleges Vojhala.

In another major compensation case, J&J was ordered to pay $4.7 billion in damages to 22 women in the US who alleged that they got cancer after using its talcum powder. In July, the jury in Missouri, US, awarded $4.5 billion in punitive damages—the verdict was the fallout of some 9,000 legal cases, wherein women alleged that J&J’s asbestos-laden talcum powder caused them ovarian cancer.

So what is it about the West that compensation amounts to million-dollar suits, while in India, patients are left with a pittance? “Lack of awareness and culpability of regulators have been the biggest deterrents for consumers in India to seek redressal, especially in medico-legal cases,” points out Delhi-based Supreme Court advocate Divya Kesar. In the US and UK, class action suits or group litigation are a norm, wherein a large number of affected parties come together to fight a legal battle. A class action is a collective claim in which the court awards permission to an individual or individuals to bring the claims of others similarly situated in a single case. But in India, this kind of legal battle is yet to pick up strength. “Although various Indian statutes provide for collective action, such provisions are rarely used… collective action is not a very popular civil remedy in India due to lengthy court proceedings,” says Kesar.

Experts argue that a well-oiled judiciary in the West also promotes litigation cases. “The US courts are fairly rigorous in their methodology for computing compensation. Indian courts, however, have a rather jugaad quick-fix attitude when it comes to determining such issues. Their approach is an ad-hoc one, as amply demonstrated in the Bhopal (gas tragedy) case,” says Shamnad Basheer, founder and managing trustee, IDIA, a Bengaluru-based not-for-profit that works for the elimination of inequities in education, and former chair professor of intellectual property law at West Bengal National University of Juridical Sciences, Kolkata.

The victims of the 1984 Bhopal Gas tragedy are still fighting for compensation. As per government figures, a total of 5,74,376 people were exposed to the US-based Union Carbide Corporation’s (UCC) toxic gas, of which 5,22,000 received Rs 25,000 each as compensation. “This was not given as a lump-sum amount… it took anywhere, from eight to 10 years, for the victims to get it,” says Bhopal-based Rachna Dhingra, a representative of the Bhopal Group for Information and Action, one of the five organisations working for the rights of the Bhopal gas disaster victims. As per the central government, only 5,295 people died as a result of the gas disaster—these people earlier received Rs 1 lakh as compensation and later Rs 10 lakh was disbursed.

But even that meagre compensation didn’t come easily. “The onus fell on the victim to prove that he/she was affected on that night. They had to pay money to doctors to testify on their health status, hire lawyers to fight in the claim court to prove that they were victims. In a way, they were fighting their own government for adequate compensation, whereas the state should have fought with them against Union Carbide,” Dhingra says. She points out how the government’s settlement in 1989 with the multinational for $470 million was not based on any medical or research figures. “When the process of claims ended, it turned out that more than half a million were affected and the compensation amount to the majority ended up being less than $500,” Dhingra adds.

In 2010, the central government decided to file a curative petition in the SC, stating that it had underestimated the number of deaths and injuries, and sought more compensation. The curative petition seeks compensation of more than Rs 1,000 crore from UCC, now owned by Dow Chemicals. “The government plans to reopen the settlement, but eight years later, the case is yet to come up for hearing,” Dhingra says. India’s efforts to approach the US courts in hopes of obtaining a larger compensation were thwarted on the grounds of ‘forum non conveniens’, a discretionary power that allows courts to dismiss a case where another court—in this case, Indian courts—or forum, is much better suited to hear the case. “Further, the final settlement had barred all subsequent lawsuits. And, therefore, all suits filed by the victims in the US courts at later stages were also dismissed,” says Basheer of IDIA.

Legal loopholes
Under the Indian legal system, damages may be awarded under general principles of tort law (which is largely judge-made ‘common law’), or under any of the specific statutes, such as the Consumer Protection Act (CPA), contracts act or Drugs and Cosmetics Act (DCA). But it’s not easy to claim compensation. “Unfortunately, the DCA provides for compensation in very limited circumstances, such as faulty clinical trials, for supply or spurious/adulterated/sub-standard drugs. These provisions can’t apply to faulty medical devices such as J&J’s ASR hip implant since such implants can’t qualify as ‘spurious’, ‘adulterated’ or ‘sub-standard’ under the terms of the Act and corresponding rules/guidelines,” says Basheer.

Although various Indian statutes provide for collective action, such provisions are rarely used. “The contingency fees charged by lawyers in the US are not permitted in the Indian legal system… this is responsible for the absence of a plaintiff bar (an informal designation for attorneys who generally represent people suing someone). Also, since there is no certainty regarding recovery, the plaintiffs are not motivated enough to file class action suits,” says advocate Kesar. Besides, in India, there is also the major risk of the plaintiff not only losing the case, but also not getting compensated. “They may even end up bearing the legal cost of the defendant company,” she adds.

A number of state laws in the US provide for strict liability. As such, the consumer who buys a defective product does not need to independently establish that the defect arose from manufacturers’ negligence. The producer is strictly liable for such defects even if he/she took all reasonable care. “Unfortunately, in India, we are yet to adopt strict liability standards the way the US has. The time may have come, in fact, to legislate on this front. The Centre has now sought to amend the consumer protection bill,” says Basheer of IDIA.

In the US, what works for the complainant is that damages are generally of two broad types: compensatory and punitive. Compensatory damages are categorised into economic damages that are directly attributable to various economic costs. Non-economic damages are for factors such as pain and suffering. More often than not, non-economic damages are far more significant than economic ones. “Illustratively, in the J&J case, a trial court in Los Angeles awarded damages of $8.3 million to an aggrieved patient, of which $8 million were damages for pain and suffering alone,” points out Basheer. He further states how punitive damages are meant to teach a lesson to the corporation, so that it deploys safer norms whilst manufacturing products and ensures that consumers are not harmed. “Compared to the US, the Indian legal system does not offer much, but this is changing slowly and courts are beginning to grant punitive damages in a larger number of cases now,” he adds.

Way ahead
Over the past few years, India is slowly inching its way up when it comes to compensation claims. In a major development in 2015, the government instituted action against Nestlé India for Maggi (on reports that it contained excess lead) in the National Consumer Disputes Redressal Commission. The complaint was, by nature, a collective action and filed on behalf of all consumers, seeking damages of Rs 640 crore for alleged unfair trade practices, false labelling and misleading advertisements. The complaint was filed under Section 12(1)(d) of the Consumer Protection Act 1986, under which the central or state government can—in its individual capacity, or as a representative of the interests of consumers in general—file complaints to the National Commission. “The complaint opened up doors to future collective actions on behalf of consumers and is a landmark case,” says advocate Kesar.

Another landmark judgment where compensation became a talking point involved the trademark/drug regulatory issue between Glenmark Pharmaceuticals and Galpha Laboratories—Glenmark Pharma alleged that Galpha Labs had blatantly copied the artwork, colour scheme, font style, manner of writing, etc, of its product CANDID-B calling it CLODID-B. In August, the Bombay High Court handed out a significant damage award of Rs 1.5 crore after taking note of the fact that Galpha Laboratories was also a reckless violator of drug safety norms.

Then there is the Uphaar Cinema fire tragedy case, where the Supreme Court imposed a fine of Rs 60 crore to be paid by the owners (Ansal brothers) to the victims—Rs 10 lakh to legal heirs of the deceased aged above 20 years; Rs 7.5 lakh to legal heirs of the deceased aged below 20 years; and Rs 1 lakh to those injured. “The SC held in pertinent part that ‘Article 21 of the Constitution of India has to be read into all public safety statutes since the prime object of public safety legislation is to protect the individual and to compensate him for the loss suffered’… It’s a landmark judgment in terms of compensation,” says Basheer of IDIA.

As far as the J&J case is concerned, till last month, the company claimed that it could trace only 1,080 patients—in August, the first batch of 15 patients were asked to appear before the screening committee for claims.

Not everyone is happy, however, with the way things are moving ahead. Vojhala feels the money for the same amount of pain and suffering can’t be so “significantly lower than what patients got in the US.” Though the committee report on J&J is well-drafted, the execution of its observations is yet to begin on any serious note. “Also, why is the company talking about compensation right away? They should first reimburse the patients the medical costs for follow-up surgeries. Then they should allow patients to decide whether they want to take the compensation being offered or figure out other options,” says Aisola of All India Drug Action Network.

The jury is still out on that.

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