Lawyers for BP and plaintiffs in the 2010 oil spill in the Gulf of Mexico have reached an agreement to settle their case for approximately $7.8 billion. The settlement was reached on the eve of the first phase of the trial involving the Deepwater Horizon rig that exploded in April 2010 killing eleven rig workers and beginning a spill that for months spewed millions of barrels of oil into the Gulf of Mexico, destroying beaches and wildlife and disrupting the economies of Gulf Coast States. The first phase of the trial was intended, in part, to apportion blame among the defendants, BP, Transocean and Halliburton. The settlement will also provide compensation and medical services to some victims over the next 21 years.

BP’s CEO, Robert Dudley, issued a statement saying, “The proposed settlement represents significant progress toward resolving issues from the Deepwater Horizon accident and contributing further to economic and environmental restoration efforts along the Gulf Coast.” BP has already paid out more than $8 billion to claimants, and has spent some $14 billion in responding to the spill.

The settlement will be paid to thousands of businesses and individuals affected by the spill. But, the agreement does not include the federal government or the state and local governments along the coast which are probably the biggest plaintiffs in the case. The federal government, for example, may still recover billions of dollars in environmental fines.

The proposed settlement will replace the $20 billion Gulf Coast Claims Facility fund created by BP to compensate victims of the spill and to pay natural resources damages and state and local response costs. Thus far this fund has paid out more than $6 billion to approximately 200,000 individuals and businesses.

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Pfizer, the world’s largest drug maker, has reportedly agreed to settle one-third of the approximately 10,000 pending cases in which plaintiffs’ have alleged that Pfizer failed to properly warn of the risk of taking Prempro, a hormone replacement therapy (HRT) drug that was prescribed to women to treat symptoms of menopause.

In an SEC filing, Pfizer stated that it set aside $772 million to resolve these cases and noted that this reserve provided “the minimum expected costs to resolve all of the other outstanding” lawsuits over its  HRT drugs.  Pfizer has refused to comment on average settlement amounts but reportedly settled 2200 cases in February for about $330 million representing an average settlement of about $150,000.

An extensive 2002 study revealed that HRT therapy was found to pose serious health risks such as stroke, heart attack and breast cancer. Over six million women took Prempro and related menopause drugs to treat symptoms such as hot flashes and mood swings before this study highlighted their links to cancer. For more on this story click here.

In a case that will greatly impact the future of mass tort drug litigation, the US Supreme Court considered whether generic drug manufacturers have the same duty as the brand name manufacturer to warn of potential harmful side effects of their drugs. 

Attorneys for the generic drug manufacturers argued that the current federal regulatory scheme did not allow their clients to add warnings on their labeling that differed from those of the brand name labels even if they became aware of additional potential risks.  They claimed that the FDA required that their labeling exactly match that of the brand name drug’s labeling. Plaintiffs argued that the generic manufacturer has a responsibility to initiate a labeling change when it has reasonable evidence that its current label is inadequate, otherwise  consumers injured by generic drugs will be without a remedy.

This case involved plaintiffs who took the generic version of the brand name acid reflux drug –Reglan, for stomach ailments and developed a serious neurological disorder called tardive dyskinesia . The lower court ruled against the generics and determined that the federal regulatory scheme did not prevent them from requesting a label change when they became aware of additional risks. Louis Bograd, who argued for the plaintiffs, told the justices, “The central issue in this case is that [the manufacturers], in the face of considerable information that the warnings on their products were inadequate, did nothing.” Michael Johnson, a Minneapolis attorney representing two of the plaintiffs stated:“If the Court sides with the plaintiffs, physicians and patients will receive adequate warnings about the prescriptions they take, and hundreds of thousands—if not millions—of injuries will be prevented.” For more on this story see click here.

CNNMoney.com reports that the number of prescription and over-the-counter drugs recalled by the FDA has risen significantly over the last several years. Nearly 300 drugs have already been recalled during this year alone. One of the main reasons cited for this increase is the surge in the number of generic drugs that hitting the market.

The concern over the mounting recalls has prompted Congress to propose new legislation aimed at increasing oversight of the drug approval process. Read the CNNMoney.com article on FDA drug recalls.