Statistics in the News: Chapter 5 Generating
New Data: Controlled Experiments
A Nightmare for Schering-Plough
One of the worst nightmares that can befall a business firm
is being found guilty in a product liability suit and then
having to pay monetary damages of such a magnitude that the
very existence of the firm is threatened. Such was certainly
the case in 2001 when Philip Morris Companies was ordered
to pay $5.5 million in compensatory damages and an additional
$3 billion in punitive damages to cancer-stricken Richard
Boeken, then 56. (Mr. Boeken claimed that he had started smoking
cigarettes at age 13, had smoked at least two packs of Marlboros
for over 40 years, and had been led to believe by Philip Morris
that smoking was "cool" and safe.) Even though a judge later
offered a reduced settlement of "merely" $100 million, the
case set a scary precedent for business.
In fact, the case terrified the executives of Schering-Plough
when it came to light that 10 asthma patients might have died
after using the company's drug inhalers. The company recalled
millions of inhalers that allegedly were not properly filled
with albuterol, a drug that helps asthma sufferers breathe.
But the company also noted (as does Chapter 5 of the text)
that while evidence supplied by surveys might highlight
an association between two variables, controlled experiments
would be needed to establish causation.
Accordingly, the company rejected the accusations leveled
against it by Public Citizen, a consumer group. The group
had gathered death reports typically filed by doctors, medical
examiners, or family members, along with such anecdotal evidence
as "he reached for his inhaler and obtained no relief." Noting
that 5,000 Americans die from asthma each year, the company
said, "We have no evidence that a patient was ever harmed
by an inhaler subject to the recalls."
Sources: Adapted from "Judge Rejects $3 Billion Verdict
for Smoker," The New York Times, August 10, 2001, p.
A12, and Melody Petersen, "Group Faults Drug Inhalers in 10
Deaths", The New York Times, August 10, 2001, pp. C1