Document Type

Article

Publication Date

2-5-2014

Abstract

This Article using statistical tools and theory in conjunction with more standard legal approaches argues that pharmaceutical manufacturers should disclose all cases of illness or injury associated with their products because this data is material to patients and their doctors and therefore to Securities and Exchange Commission Rule 10b5's ÔÇ£reasonable investorÔÇØ Patient and investor interests complement each other in this context so each will benefit from disclosures that interest the other Because individuals process more information than traditional statistical tests convey they act reasonably in expanding their treatment and investment criteria beyond statistical data Moreover two sets of expert intermediaries ' doctors and professional investors ' will be involved Their expertise will contribute to a more accurate assessment of the risks that adverseevent reports may suggest a drug presents and of the significance of these risks to shareholders The Supreme Court's reasons for not requiring full disclosure are out of place in the context of adverseevent reporting given Rule 10b5's prodisclosure mandate and the fact that even seemingly singular and unconnected facts can substantially move investors' and patients' opinions about a drug's safety and thus its maker's viability A fulldisclosure rule would place the determination of which facts are important into the hands of parties with ÔÇ£skin in the gameÔÇØ rather than regulators or selfinterested drug makers

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