D OW C ORNING AND THE S ILICONE B REAST I MPLANT C ONTROVERSY
On May 15, 1995, after years of controversy surrounding silicone breast implants and in the face of
thousands of individual lawsuits, Dow Corning Corporation (DCC)—a 50-50 joint venture of Dow
Chemical Company and Corning Inc.—filed for Chapter 11 bankruptcy protection. Richard Hazelton, the
CEO of DCC, explained the decision, “It became clear to Dow Corning that to continue our current course
ultimately would make it impossible to either resolve this controversy responsibly or remain a healthy
company. A Chapter 11 reorganization will bring closure and preserve underlying business.”
Background: Market Opportunities, Competitive Pressures, Internal Company
Questions Dow Corning Corporation was a start-up venture between Dow Chemical Company and
Corning Inc. in 1943. As an incubator, the goal of DCC was to create and market a new
material—silicone. Although the company later proved successful, with almost 10,000 employees and
revenues in excess of $2 billion, it did so with the support of Dow Chemical and Corning, both
looking for promising profits from the new venture.
The first silicone gel breast implant took place in 1964. Between that time and the mid-1990s, “about
two million women nationwide have received breast implants, most of them for cosmetic reasons.”
Although the majority of these women were satisfied with the implants, “a small minority of recipients in
both Canada and the United States have complained that the implants have ruptured, allowing gel to leak
into the breast cavity and migrate to other parts of the body. Some women maintain that implant problems
cause pain in the chest, arms, and back, as well as debilitating autoimmune diseases such as rheumatoid
arthritis. Some also complain that scar tissue formed around the implants, causing a hardening of the
breasts.”
Although the silicone gel breast implants were believed by scientists at DCC to be safe for humans,
internal memos suggest that DCC succumbed to competitive pressures, did not pay attention to some
animal tests, and ignored employees’ complaints about safety issues. By 1975 competitors had already cut
DCC’s market share in this area by a third. To counter the competition, DCC wanted to rush its new
product—Flo-gel—to market by June 15, 1975. Projected annual sales were 50,000 units. An internal memo
pertaining to market urgency, dated January 31, 1975, stated, “17 weeks, 121 days, 2,904 hours, 174,240
minutes.”
The Flo-gel product suffered from “gel-bleed”—the seepage of silicone molecules through the plastic
container that housed the liquid gel. Because of gel-bleed, the implants had a noticeably greasy, even oily,
sensation when handled. In an internal memo dated May 2, 1975, sales managers stated that the implants on
display at a trade show “were bleeding on the velvet in the showcase.” Even members of a task force that
had been established by Dow Corning in January 1975 expressed concern that gel-bleed might cause
problems in humans.
Animal studies conducted on rabbits in February 1975 revealed inflammation, and a test on dogs
revealed gel leakage. Thomas Talcott, a product engineer with the implant team, argued for more study
because of his concern that a ruptured implant sac in a human could cause health risks. When his arguments
were ignored, he resigned. Flo-gel went to market in the fall of 1975. A disgruntled and angry sales force
started fielding complaints from plastic surgeons over gel-bleed, leaking gel, and ruptured implants. An
internal memo from one sales professional to his superior stated, “To put a questionable lot of mammaries
on the market is inexcusable. I don’t know who is responsible for this decision, but it has to rank right up
there with the Pinto gas tank.”
The Controversy Women who have had medical problems with their implants alleged, with their
doctors’ support, that the following medical disorders were present: autoimmune disease, breast cancer,
arthritis, abnormal tissue growth, scleroderma, lupus erythematosus, fatigue, and nerve damage. Still, DCC
has maintained the safety of the implants, stating the women “claim that whatever injury, disease, or illness
from which they suffer is causally related to their implants.”
Numerous studies, including a Mayo Clinic Study, a University of Southern California Study, and a
French International Study, reported similar results regarding the safety of breast implants. The French
Ministry said that an analysis of international research “showed that the risk of contracting autoimmune
diseases and cancer after the implantation of silicone breast implants was no greater than in the general
public.” Scientists involved “noted that no study could completely dismiss the possibility that breast
implants contributed to medical disorders.” The degree of safety may never be completely known, but as of
1995, “about 5% of the two million American women with silicone implants have demanded compensation
for side effects.”
A Historical Perspective In 1976, the federal government passed an amendment to the Food, Drug, and
Cosmetic Act that provided stricter reporting and inspection standards for all new medical devices. At that
time, there were 1,700 types of devices on the market, many of them containing silicone. Through a
grandfather clause, these devices were allowed to remain on the market with minimal Food and Drug
Administration (FDA) review. A manufacturer simply filed a “510(k)” form informing the FDA of the new
product and its similarity to an existing product already on the market. In 1996, the FDA acknowledged
that there were 58,000 medical devices, many containing solid silicone, that entered the market through this
510(k) process.
It was almost 12 years before further government attention was given to the breast implant controversy.
Dr. Sydney Wolfe, a physician and director of the Public Citizen Health Research Group in Washington, said
in a petition, “an increasingly larger pool of women is being created who may, in the prime of their lives,
ultimately develop chronic illness, disfigurement, and disability because of the implants (silicone).” Dr.
Wolfe began to publicly attack manufacturers and plastic surgeons for downplaying the potential health
risks. Opponents of Dr. Wolfe agreed with Bruce Hansel, a biochemist and bioengineer at the Emergency
Care Research Institute (ECRI), a watchdog group that had been tracking silicone-containing medical
devices. Hansel stated, “You can nit-pick anything to death. There will never be a perfect biomaterial, but I
would say that silicone in my view is probably the biomaterial of the 20th century. It is the best biomaterial
we have going for us now.” “Manufacturers continue to deny a link between such illnesses of the human
immune system and breast implants, but various doctors have concluded that such causation exists.”
As a result of conflicting expert medical data and opinions, the FDA once again became involved in the
breast implant controversy. The agency announced, in November of 1988, that although manufacturers
could continue to produce breast implants, they would have to provide more detailed information on the
safety concern for a 1991 investigation. Unfortunately, the 1991 investigation proved uneventful. Although
the FDA panel cited the overall lack of safety data, it did not move to ban the sale of breast implants. The
panel noted testimony from breast cancer patients (and their psychological benefits from the implants) as an
integral part of their decision.
By 1991, “the FDA had received 2,500 reports of illnesses or injuries associated with the implants, which have
been used in one million women. But the degree of risk was unclear because extensive research had not been
done.” As pressures mounted regarding the product’s safety, DCC adamantly “denied any link between the
implants and illness.” Moreover, “rather than wait for results from the [FDA] research, Dow undertook to
determine the safety of silicone gel implants.” The Dow Corning study of silicone implants in March 1993
“reported that the silicone gel in the implants altered the immune systems of laboratory rats . . . but [rats] are more
susceptible to inflammatory reactions than humans.”
The Right to Know Another issue associated with the breast implant controversy is the patients’ right
to know. “Dow Corning has actively covered this issue up,” said Dr. Wolfe, the director of the Public
Citizen Health Research Group. “They are reckless and they have a reckless attitude about women.” Wolfe
continued, “DCC was only thinking of themselves when they ‘repeatedly assured women and their doctors
that the implants were safe’ while keeping ‘guard over hundreds of internal memos that suggested that
some of Dow Corning’s own employees have long been dissatisfied with the scientific data on implants.’”
The release of these internal memos suggests that Dow had long known of major problems with the
silicone implants that it has marketed since 1975. The following are highlights from a sample of the memos
to and from Dow scientists:
Jan. 28, 1975: Memo from Arthur H. Rathjen, chairman of the Dow implant task force, as Dow rushed a new
implant to market: “A question not yet answered is whether or not there is excessive bleed [leakage] of the gel
through the envelope. We must address ourselves to this question immediately. . . . The stakes are too high if a
wrong decision is made.”
Sept. 15, 1983: Memo from Bill Boley: “Only inferential data exists to substantiate the long-term safety of these
gels for human implant applications.”
April 10, 1987: Memo to Rathjen and others suggesting that Dow was considering a study to review 1,250
implant recipients: “The cost of this data is expected to be minimal, less than $10 million.” The study never took
place.
In response to disclosure of these memos, Dow Corning stepped up an ad campaign that it had started in the
fall of 1991. In newspapers across the country, DCC urged women with questions about implants to call a
company hotline. The ads said that instead of “half-truths,” callers would receive information based on 30 years of
valid scientific research. But when some women called, they were told that the implants were “100 percent safe.”
Shortly afterward, the FDA warned Dow Corning that some of the information on its hotline was “false or used in
a confusing or misleading context.”
While the question regarding whether the implants cause harm to patients was being contested, also at
issue was DCC’s failure to inform stakeholders and clients that some DCC employees expressed concern
about the implant’s safety. Failure to accurately inform consumers of questionable products in a timely
manner violated the right of these women to know. “If you do not have data on the range of risks and
problems, you are not free to choose, you are free to be ignorant. Informed consent requires both
information and choice. Since the companies have not supplied the information, this is a dubious choice.”
The Legal Onslaught One of the first lawsuits filed was by a woman who claimed that a silicone
breast implant manufactured by Dow Corning caused her to contract a disabling immune-system disorder.
The case, brought in 1989 by Mariann Hopkins, resulted in a 1991 federal jury verdict ordering Dow
Corning to pay Hopkins $840,000 in compensatory damages and $6.5 million in punitive damages. Dow
Corning claimed that this award “triggered the explosion of breast-implant litigation. . . . State and federal
courts have been inundated with cases . . . against all manufacturers of mammary prostheses in which
plaintiffs claim whatever injury, disease, or illness from which they suffer is causally related to their
implants.”
The explosion of lawsuits revealed a variety of health problems being attributed to faulty silicone breast
implants and varying degrees of legal passion in pursuit of settlements. “Among the women involved, there
was a wide range of consequences and varying degrees of certainty about the link between implants and
subsequent medical difficulties. The intensity of the pursuit varied from lawyer to lawyer, and the
willingness of parties to settle changed with time, making patterns of settlement difficult to establish.” Two
Houston attorneys in particular campaigned through public ads to solicit women who had experienced
problems with gel implants. These attorneys wanted to keep their clients away from any class action suit in
order to have each person appear before the manufacturer, a judge, and a jury. The lawyers won $25
million in their first trial against Bristol-Myers Squibb. These attorneys at one point had over 2,000
individual cases lined up for adjudication. They were obtaining settlements of $1 million per case with fees
of 40% per settlement.
In response to the explosion of litigation, Dow Corning and two other producers of silicone breast
implants, Bristol-Myers Squibb Co., and Baxter Health Care Corp., attempted to bundle the individual suits
together in a class action suit. As a result, all of the individual lawsuits were consolidated into a class action
suit in 1992. In 1994, Federal District Judge Sam C. Pointer approved a proposed settlement, in which these
companies agreed to pay $4.25 billion to women who contended that implants caused illness. The
settlement was designed to provide women with net payments ranging from $105,000 to $1.4 million,
depending on their physical condition and age. These amounts could be reduced if an unexpected number
of women registered to participate and if the companies refused to pay more. Women would have an
opportunity to leave the settlement if payments were reduced, although such actions possibly could have
jeopardized the entire settlement idea. “The settlement contributions would be based on each
manufacturer’s market share, litigation exposure, and ability to defend the claims, with Dow Corning
paying $2 billion, Bristol-Meyers Squibb $1.5 billion, and Baxter $556 million.” The manufacturers also
had the ability “to drop out if a certain number of victims chose not to participate. Each manufacturer
would be left to their own discretion to determine if the number of participants was significant.”
In June 1994 Dow Corning announced that it might have to declare bankruptcy if too many women
opted out of the $4.25 billion settlement. These comments led some financial analysts to suggest that Dow
Corning was “trying to ‘scare’ women into joining the settlement, which could potentially save the
company millions of dollars in litigation fees.” Critics argued that Dow Corning and the other implant
manufacturers were attempting to make the settlement appear generous, but that it was not a generous
solution. “In reality, the payout to each woman would depend on the total number of claims filed and could
decrease dramatically as the number of plaintiffs climbs. And the rights of women to drop out of the plan
and seek their own settlements would actually be sharply curtailed.” As the legal onslaught continued,
David Bernick, lead counsel for Dow Corning, said, “[t]he volume of cases grew so quickly there was no
way to keep up with it. . . . Dow went Chapter 11 because it could not fight all these claims.” Dow Corning
filed for bankruptcy protection on May 15, 1995.
Many people feel DCC threatened bankruptcy early on to scare women into opting to join the class
action suit. The various methods used by manufacturers to get women to join the suit were not completely
successful, however, as “more than 11,300 women rejected the $4.25 billion settlement. Those women have
reserved their right to sue implant manufacturers individually.” These individual lawsuits, coupled with the
difficulties DCC experienced in coming to agreement with so many other women, led to DCC’s filing for
Chapter 11.
DCC provides a compelling modern-day example of the close relationship that has developed between
product liability suits and Chapter 11 filings, an issue that Congress must finally address. “If bankruptcy is
now the ultimate limit on liability, what figure short of that can Congress agree on to avoid the danger
implicit in Dow Corning’s case: that an otherwise viable business, and the jobs that go with it, might go
down the drain of tort practice.”
Aftermath and Final Resolution “As the 1990s wore on, one study after another failed to establish
a connection between implants and illness. The studies in turn emboldened judges to bar much of the
plaintiffs’ more speculative expert testimony under new ‘gatekeeping’ guidelines laid down by the U.S.
Supreme Court.” In August 1996, Judge Sam Pointer “appointed an independent national science panel that
included experts in the fields of immunology, epidemiology, toxicology, and rheumatology . . . to review
and criticize the scientific literature concerning a possible causal link between silicone breast implants and
connective tissue diseases and related signs and symptoms, as well as immune system dysfunction.” On
December 1, 1998, Pointer’s science panel issued its report “presenting no evidence linking silicone breast
implants to systemic conditions such as connective tissue disease.” In June 1999, the Institute of Medicine,
a part of the National Academy of Sciences, issued a 400-page report prepared by an independent
committee of 13 scientists which “concluded that, although silicone breast implants may be responsible for
localized problems such as hardening or scarring of breast tissue, implants do not cause any major diseases
such as lupus or rheumatoid arthritis.” As one analyst observed, “[t]he cumulative weight of the scientific
evidence . . . forced the endgame. Plaintiffs began to lose in court, and settlement values plummeted.”
In July 1998, Dow Corning made an offer of $3.2 billion to settle all of the claims against it. In
December 1999, Judge Arthur Spectors approved Dow Corning’s $4.5-billion reorganization plan,
including $3.2 billion to settle claims brought by silicone gel breast implant recipients. The remaining $1.3
billion was to be paid to commercial creditors, in part through a $900 million to $1 billion bond issue.
However, Dow Corning would not emerge from bankruptcy until June 2004.
On June 1, 2004, Dow Corning officially emerged from bankruptcy, and the company said it would
begin paying the silicone breast implant recipients who has settled for $3.2 billion in 1998. The settlement
plan covers more than 300,000 women who had received implants before 1994. Each recipient will receive
between $2,000 and $250,000 depending on her medical condition. Women who received implants after
1994 are not included in the settlement because they “presumably understood the potential health risks.”
Both the plaintiffs and defendant claim to have been victimized. The plaintiffs claim to have been victimized
“by an inadequately tested medical device that frequently ruptured and leaked poisonous goo.” Dow Corning
claims to have been victimized “by a tort system that allowed a few lawyers to extort billions of dollars using a
dollop of junk science.”
In reflecting on the nine-year struggle to settle the claims of the breast implant recipients, Gary
Anderson, Dow Corning’s current chairman, observes: “Although breast implants have never represented
more than one percent of our business, our company is often identified with them. We are confident that the
science shows a clear picture today—through more than 30 independent studies, government and courtappointed panels, and court decisions—that breast implants are not associated with disease. Nevertheless,
we are pleased to put this issue behind us.”
Final Thoughts DCC’s silicone breast implant troubles occurred in a free-market, capitalist society. A
free market encourages innovation, but it can also lead to corporate manipulation and to the introduction of
dangerous products into the market. Marcia Angell, a physician and executive editor of The New England
Journal of Medicine, concluded in her book Science on Trial: The Clash of Medical Evidence and the Law
in the Breast Implant Case that “[o]nly by relying on scientific evidence can we hope to curb the greed,
fear, and self-indulgence that too often govern such disputes. This is the lesson of the breast implant story.”
Charles Rosenberg, Professor of History and Sociology of Science at the University of Pennsylvania,
argued in a New York Times review of Dr. Angell’s book that “it is difficult to share her hope that
scientific evidence can or will translate easily or naturally into social policy. She is dismayed, for example,
that regulations ‘should be influenced by political and social considerations.’ Yet this is the way our system
works. In most policy matters, scientific evidence is only one among a complex assortment of factors that
interact to produce particular decisions.” A careful reading of the events, stakeholders, and outcomes in the
silicone breast implant controversy reveals the social, economic, legal, political, and scientific factors
involved “the practice of Federal regulation, the relationship between science and courts, the lack of
consistently enforced professional standards in law, medicine and journalism.” A major lesson from this
case also involves the role of the plaintiffs. The Houston lawyers’ relentless pressure with inconclusive
medical facts on Dow Corning, along with their courtroom successes, demonstrates that “facts” alone are
insufficient factors in determining truth.
Questions for Discussion
1. Identify the major stakeholders and stakes in this case. Who gained and lost in this case?
2. Was the Dow Corning Corporation justified in considering bankruptcy? Why or why not?
3. What are the ethical issues and principles involved in this case?
4. Who has acted the most responsibly in this case? The least? Explain.
5. Who in this case was at fault? Support your answer.
6. In writing about the disputes regarding the silicone breast implants, Marcia Angell concluded
that “[o]nly by relying on scientific evidence can we hope to curb the greed, fear and selfindulgence that too often govern such disputes. This is the lesson of the breast implant story.”
Do you agree or disagree? Is this the major or the only lesson from this case? Explain.
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