This year witnessed high-profile litigation involving cancers allegedly caused by Baby Powder and the weed-killer Roundup. Johnson and Johnson faces over 15,000 class-action plaintiffs and over $4 billion in jury awards for Baby Powder, while Bayer had four judgments for over $2 billion against Roundup. The cases raise the vital question of whether we accurately identify potential hazards.
Economics offers counsel for dealing with harmful chemicals in products. People need information about the risk to make good decisions. The response will frequently be to remove the chemical, but when indispensable for product performance, we may accept the risk and take precautions.
The greater challenge is learning which chemicals cause harms. For Baby Power and Roundup the alleged carcinogens are talc and glyphosate. Establishing carcinogenicity is a difficult scientific question, made more difficult because we view clinical testing of a suspected harmful substance on humans as unethical. Harm must be investigated indirectly, through animal testing or teasing out the health impacts on exposed persons, or epidemiology.
Each approach has drawbacks. Not every chemical which causes cancer in animals causes cancer in humans. And animal tests employ extremely high doses to replicate accumulated exposure for people over decades, but such massive doses may produce very different physiological effects. Epidemiological studies have difficulty establishing persons’ extent of exposure. And we may lack a control group not exposed to an omnipresent carcinogen.
Someone must pay for costly research. Does who pays influence the results? Many people fear that corporations will buy studies “proving” the safety of their products. While possible, companies interested in earning long run profits have an incentive to only sell safe products. On the other hand, bad science showing a nonexistent cancer link can yield financial gain. Law firms which spend millions of dollars recruiting clients for lawsuits may spend a few million more on studies bolstering the cancer link.
Government science agencies in principle work for us. If most Americans want reliable facts on health impacts, the agencies should provide this. Yet many Americans believe that the Environmental Protection Agency (EPA) is biased, despite disagreeing about the bias. Groups on the left accuse the EPA of doing corporations’ bidding and minimizing risks. People on the right believe that the EPA advances environmental groups’ liberal agendas.
How does this all play out? Let’s consider the Roundup case further. The International Agency for Cancer Research linked glyphosate to Non-Hodgkin Lymphoma (NHL) in 2015. Other governmental agencies, including the EPA, Health Canada, and the European Food Safety Authority, deem glyphosate safe.
Even without getting into the details of different studies, broad evidence suggests little potential harm here. Glyphosate use has grown exponentially over the past 30 years while the NHL rate remained steady. Differences across the country in NHL rates do not correlate with differences in pesticide use.
What about our societal response? The EPA has not banned glyphosate. Most government science agencies worldwide reject the cancer link.
Yet two companies creating value in our economy face possible bankruptcy. Some would blame the tort lawyers who file the suits. A society with markets and limited government relies on legal action to regulate harmful products. The lawyers are responding to incentives. Law firms are spending millions lining up clients and filing cases because they believe they can win settlements. An ability to win lawsuits on scanty evidence is a problem with the legal system, not the lawyers filing the cases.
Many legal observers blame the natural human sympathies of jurors here. A juror sees cancer victims and wants to help. They can make a rich company provide the help. The existence of experts willing to testify on each side makes this a fact for the jury. If the law allows, jurors will be sympathetic.
The Roundup cases do not overly dismay me. As a society, we often make decisions based on sound science. We recognized, for instance the harm from smoking and air pollution. Open inquiry and dialogue can frequently identify societal problems and solutions that many Americans can accept.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
