$505 Million Verdict Against Teva and Baxter for Propofol Vials That Spread Hepatitis C Across Las Vegas

In 2006, Henry Chanin, a private-school principal, underwent a routine colonoscopy at Desert Shadow Endoscopy Center in Las Vegas. Weeks later, he tested positive for hepatitis C. What followed was a public-health investigation that would notify roughly 50,000 Clark County residents they may have been exposed to hepatitis C, HIV, and other bloodborne diseases at clinics operated by Dr. Dipak Desai.

The investigation focused in part on how propofol, the anesthetic used during the procedures, was being administered. Teva Parenteral Medicines and Baxter Healthcare supplied the drug in 50-milliliter vials, far more than a single colonoscopy patient requires. Chanin's legal team argued those large vials, which featured upside-down labels and IV hooks designed for hospital settings, were functionally incompatible with the single-patient, single-dose demands of outpatient endoscopy centers. Safer 10-milliliter single-dose vials existed and cost the companies less profit to sell.

Robert Eglet of Eglet Adams led the trial team. In closing arguments he called the oversized vials 'weapons of mass infection,' telling jurors that the two pharmaceutical companies 'literally set the trap' by selling a product configured in a way that invited contamination across patients. The four-week trial produced testimony from medical experts on how the vials contributed to reuse and cross-contamination even when clinic staff believed they were following safe practices.

On May 5, 2010, the jury found both Teva and Baxter liable for failure to warn and breach of implied warranty of fitness for a particular purpose. Two days later, the same jury returned $500 million in punitive damages: $356 million against Teva and $144 million against Baxter. Combined with $5.1 million in compensatory damages awarded during the liability phase, the total came to $505.1 million, at the time the largest punitive damages award in Nevada history.

Henry Chanin said the number was chosen to send a message to two companies that together earned roughly $13 to $14 billion annually: 'It wasn't going to be pocket change for them to make right what happened here in Las Vegas.' Teva appealed to the Nevada Supreme Court, retaining Alan Dershowitz to argue the appeal. Before the court could rule, the parties reached a confidential settlement, resolving the case without a published appellate decision reducing the verdict.