Tuesday, August 23, 2005

The Merck verdict

There's much commentary on the Merck verdict, for example here and here. There's a lot of concern that juries simply aren't qualified to decide cases as technical as this one. I strongly share this concern, so what should be done? First of all, it's not politically feasible to alter the Seventh Amendment:
In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.
Tort reform is somewhat more feasible. It doesn't take away the right to jury trial; it just limits the effect of the verdict. However, tort reform takes time, is not guaranteed to succeed, and can be reversed, especially considering that each state has its own tort laws. What should companies like Merck do in the meanwhile, under our current system?

If I were a drug company, I would simply refuse to sell my product to anyone who doesn't sign a waiver that agrees to submit to third-party arbitration. I would only do business with resellers who agree to assume full liability if they sell to customers who don't sign the waiver. For medical emergencies, in which drugs are administered to patients unable to sign waivers, I'd require whoever administers those drugs to assume full liability if they want to buy from me. Don't worry: most states protect emergency caregivers with Good Samaritan laws.

If my idea's so good, why hasn't Merck done it already? Are there laws against it? In that case, I don't see any alternative to focusing on trying to change the laws. Another possibility: would customers revolt, looking for the closest substitutes they could find from other drug companies? I doubt this is the case, but if it is, then a partial workaround would be not to require customers submit to arbitration, but to offer a discount to those who do. The potential problem with my idea that worries me the most: if a drug company implemented it, then, at least in some states, there might a political backlash rather than customer backlash, with these states swiftly moving to prohibit the endeavor.

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