In a split decision, the U.S. Supreme Court upheld a lower court ruling against drug manufacturing giant, Pfizer, Inc. and allowed a lawsuit alleging that Pfizer’s diabetes drug, Rezulin, caused injuries to a group of Michigan residents.

Details of the case

The case surrounds Pfizer’s diabetes drug, Rezulin, which is actually marketed by Warner-Lambert, who merged with Pfizer in 2000. Approved in 1996, it was taken off the market four years later after patients taking the drug died or had to have liver transplants. Several thousands of lawsuits were filed against Pfizer alleging that the company failed to provide consumer warnings about the drug’s side effects.

One of those lawsuits involved Michigan residents who alleged that they were injured by the drug. However, a Michigan state law says that individuals cannot sue pharmaceutical companies for injuries they received from the company’s drugs unless they can show that the company itself was involved in fraudulent activity against the U.S. Food and Drug Administration (FDA). In other words, that the drug company didn’t provide the FDA with accurate data during the approval process.

Court rulings

A lower court had ruled in favor of the victims and allowed their case to move forward. However, Pfizer appealed that decision to the nation’s highest court. In a split 4-4 decision, the Supreme Court allowed the case to move forward, although they did so without commenting on it. While the court is comprised of nine justices, Chief Justice John Roberts did not participate as he owns Pfizer stock.

What does the decision mean?

Legal analysts say that the decision is a victory for consumers – but caution that this victory may be short lived. In the fall of 2008, the Supreme Court will decide a similar case concerning lawsuits against drug manufacturers (Wyeth Pharmaceuticals vs. Levine) and whether they should be immunized from those suits due to FDA preemption. In a nutshell, manufacturers are claiming that because the FDA has the final approval on whether or not certain drugs can be sold, they should not be held liable when complications later arise – such as in the Rezulin case above.

The court recently decided a similar case involving Medtronic, a medical device manufacturer whose defective balloon catheter caused a patient’s death. In an 8-1 decision, the court ruled in favor of Medtronic – leaving the patient’s surviving family without recourse against the manufacturer. So, the court has essentially ruled for both sides in the past month and legal analysts say that the Wyeth decision this fall is the one to watch.