October 21, 2002

News Story

By Kenneth C. Jones

Saying they wanted to "send a message out to the world," jurors in Jackson County awarded $2.2 billion to a cancer patient who was given diluted chemotherapy drugs by pharmacist Robert Courtney.

Georgia Hayes claimed in her pharmacist malpractice suit that the doses of chemotherapy she began receiving from Courtney's pharmacy in September 1999 worsened her ovarian cancer and affected her chance of survival.

Courtney pleaded guilty in February to federal criminal charges accusing him of dispensing adulterated medications.

Hayes' case was the first of more than 400 against Courtney to go to trial. Courtney's defense attorney argued there was no evidence that the weakened drugs caused harm to Hayes.

During jury selection on Oct. 7, two drug manufacturers were dismissed from the case after they announced a settlement of about 300 lawsuits against them. Hayes and the other plaintiffs had alleged that Eli Lilly & Co. and Bristol-Myers Squibb knew or should have known Courtney was diluting drugs but failed to take any action. The amount of the settlement was confidential.

"The community needed this jury verdict to help in the healing process," said Grant Davis of Kansas City, who represented Hayes. "If Courtney's argument had prevailed, it would have been open season on cancer patients — people could say, 'what does it matter, they're going to die anyway.'"

According to co-counsel Michael Ketchmark, there is a "significant problem with counterfeit drugs around the country. Courtney's scheme was just one way to do it.

"Our hope is that this verdict will remove the temptation from any pharmacist and will encourage better regulation and monitoring of pharmacists."

The $2.2 billion verdict, which included $2 billion in punitive damages, is believed to be the second largest in Missouri history. In 1992 Robert Berdella, who tortured and killed six young men in his Kansas City home, was hit with a $5 billion wrongful death judgment. His homeowners insurance company later paid $2.4 million to settle a vexatious refusal case.

Davis and Ketchmark say that a sizeable portion of the verdict in Hayes v. Courtney, et al. is collectible through Courtney's insurance policy with Pharmacist Mutual Insurance. Pharmacist Mutual disagrees, and has filed a declaratory judgment action in federal court in Kansas City contesting coverage, Davis said.


Hayes was diagnosed with cancer in 1996. She said her chemotherapy regimen of Gemzar and Taxol was effective until September 1999 — when her oncologist, Dr. Verda Hunter, began using Courtney's pharmacy to supply the drugs.

Courtney's scheme began to unravel when Hunter was talking to a nurse in May 2001. The nurse said a drug salesman for Lilly & Co. told her Courtney seemed to be selling three times more Gemzar than he was buying.

Hunter decided to have Courtney's Gezmar solution tested but could not find a lab to agree to the testing. However, a test of Courtney's Taxol showed it was one-third the amount Hunter had prescribed.

She called the FBI and Courtney was later arrested.

The pharmacist told authorities that he diluted the drugs for profit. According to Ketchmark, in 1998 Courtney sold $108,506 worth of one drug but bought just $37,370. He said his dilution scheme began in 1992 and affected 4,200 patients.

Courtney is currently being held in federal prison in Leavenworth, Kan. He is scheduled to be sentenced in December and faces up to 30 years in prison. Federal authorities seized Courtney's assets, totaling about $12 million, and set up a victims' fund which will be distributed after sentencing.

Davis and Ketchmark brought the drug makers into their lawsuits against Courtney, citing the remark of the Eli Lilly salesman as evidence that the two companies had notice of Courtney's scheme.

The companies moved for summary judgment. In their response to Eli Lilly's motion, Davis and Ketchmark summarized their argument against the drug makers:

"The company's knowledge regarding Courtney's crimes first came to light on the eve of Courtney's arrest, when FBI agents began questioning Darryl Ashley, Eli Lilly's local sales representative. Then, as part of the grand jury process and the FBI's continuing investigation, Eli Lilly was forced to turn over its internal company documents and files to the FBI and the United States Attorney's Office. These documents and files, which Eli Lilly has now produced as part of this case, show that the company clearly knew about Courtney's actions by April 1998."

The response went on to argue that the "major flaw in Courtney's scheme — which Courtney never suspected — was the fact that Eli Lilly carefully monitors his purchases and sales of Gemzar down to each individual vial of the drug. Eli Lilly watched and analyzed Courtney's purchases and sales for its own marketing purposes, and to pay commissions to Ashley. Using Eli Lilly's sales data, Ashley discovered that Courtney was selling more Gemzar to the doctors at Kansas City Internal Medicine (KCIM) than he was buying from any known legitimate source. Thinking he was being underpaid on his commissions, Ashley reported his concerns to his district manager in April 1998. His manager told him to 'begin gathering invoices' from KCIM in order to verify the amount of Gemzar that KCIM's doctors were buying."

In conclusion, the attorneys asserted: "As Lilly's own security director has testified, any reasonable company would have gone to the proper authorities once it learned of the vast discrepancy between the amounts of Gemzar Courtney was buying and the amounts he was selling. Lilly did not. Instead, it placed the investigation on the 'back burner' and hid all the relevant facts from Dr. Hunter. People died as a result, and others suffered and continue to suffer unimaginable injuries. Punitive damages are appropriate in this case."

Similar allegations were made against Bristol-Myers Squibb.

The companies vehemently denied the allegations, contending that they became aware of Courtney's scheme at the same time the general public did and that they had followed all laws regarding security of chemotherapy medications.

The settlement with the drug makers was reached on Oct. 7 following mediation, several days after Jackson County Senior Judge Lee E. Wells denied the companies' motions for summary judgment.

In a joint statement, the drug companies and plaintiffs' attorneys stated: "[T]he mediation forced all parties to take an additional hard look at this case and to carefully consider the emotional im-pact of protracted litigation on the plaintiffs."

The amount of the settlement is confidential.

With the drug companies out of the case, trial started against the pharmacist on Oct. 8. Courtney was the first witness — via a videotaped deposition taken in July at the Leavenworth prison. He invoked his Fifth Amendment right against self-incrimination in declining to answer each question.

Georgia Hayes also testified, telling the jury: "If I had my wish, they would paint all of our faces on his cell block wall so that when he goes to sleep at night, we are the last thing he sees and when he wakes up in the morning, we are the first thing he sees."

Hayes' expert oncologist testified in court, while two oncologists testifying for Courtney appeared via videotape. The defense experts said the diluted drugs did not affect Hayes' health, and that even with full doses "she still would have had a recurrence," according to one of the oncologists.

The jury deliberated for two hours on Oct. 10 before issuing its verdict, which included $578,881.05 in past economic damages, $75 million in past non-economic damages, $150 million in future non-economic damages and $2 billion in punitives. Hayes' attorneys had asked for $1.2 billion.

No Cool Deliberation

Kansas City attorney David Buchanan, who represented Courtney, said, "Ms. Hayes is a great lady, a brave person — I admire her very much.

"The jury wanted to make sure this never happened again," Buchanan said. "But I don't think the amount of the verdict was the product of cool deliberation.

"The jurors didn't hear anything during the trial that they hadn't heard over the previous few months in the media. So I don't think it made a lot of difference what anyone said during the trial."

Buchanan said he was in a difficult position regarding his trial strategy. "I couldn't ask the jury to be fair to Robert Courtney — all it would do would be to get the jury mad at me.

"So I argued that they should be fair to the civil jury system," since an unusually large verdict would be cited by critics trying to alter the system for their own political ends.

Buchanan said that although the jury knew about the settlement by the drug companies "that probably didn't affect the case at all."

Regarding the settlement, Buchanan said that "Grant [Davis] and Mike [Ketchmark] did an exceptional job — they were really bulldogs on this. The word on the street was that there was no way the drug manufacturers had any responsibility, but they were able to get a settlement."

Davis said the settlement with the drug companies must still be approved by all the remaining plaintiffs. Regarding the other cases against Courtney, Davis said a decision must be made: "We can continue to have the trials against Courtney, or just focus on this one [Hayes' case] and garnish the insurance company."

Despite the uncertainty over the remaining cases, Ketchmark said the verdict in Hayes' case makes one thing clear — pharmacists now know they shouldn't do what Courtney did.

"There is no way for a patient to tell or for a doctor to tell if a medication has been tampered with. The patient is at the mercy of the pharmacist.

"This verdict will help dissuade any pharmacist who might be thinking about profiting off the health of their patients."

(Some information from wire reports was used in this article.)

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