March 6 (Bloomberg) -- Wyeth and a Pfizer Inc. unit must pay $27.1 million in punitive damages for mishandling menopause drugs that caused a woman's breast cancer, an Arkansas jury said.

Jurors in federal court in Little Rock deliberated about five hours today before finding that Wyeth and Pfizer's Pharmacia & Upjohn showed ``reckless disregard'' for the health risks posed by their hormone-replacement drugs and should be punished. The panel awarded $2.75 million in compensatory damages to Arkansas resident Donna Scroggin on Feb. 25.

Punitive damages are justified because ``the companies will not accept personal responsibility'' for harming women, Jim Morris, an Austin, Texas-based lawyer representing Scroggin, said after the verdict.

It's the second time Wyeth has been ordered to pay punitive damages over its handling of the drugs, Premarin and Prempro. A Nevada jury in October awarded $99 million in such damages to three women after finding that the treatments caused their breast cancers. A judge slashed the award to $58 million last month.

The Arkansas verdict might not stand either, Barbara Ryan, an analyst with Deutsche Bank AG in Greenwich, Connecticut, said in a telephone interview.

``I would guess it would be overturned,'' said Ryan, who doesn't own shares in either company. ``The risks are clearly documented on the label for these drugs.''

Scroggin was among 6 million women who took the pills to treat menopause symptoms such as hot flashes, night sweats and mood swings. She sued Wyeth and Upjohn in November 2004, according to court records.

Appeals Next

Lawyers for both companies said they will appeal today's jury finding. Wyeth, based in Madison, New Jersey, was ordered to pay $19.3 million in punitive damages. New York-based Pfizer was told to pay more than $7.7 million.

``We don't believe there was any evidence that warranted punitive damages being considered in this case,'' said Lyn Pruitt, a Little Rock-based lawyer for Wyeth. ``The evidence in this case showed that Wyeth properly warned Ms. Scroggin about the increased risk of breast cancer.''

Wyeth fell 98 cents, or 2.3 percent, to $41.55 at 4:01 p.m. in New York Stock Exchange composite trading. Pfizer fell 46 cents, or 2.1 percent, to $21.59.

``While we have great sympathy for Ms. Scroggin, the verdict in this case is not supported by the evidence at trial or by medical science,'' Sandra Phillips, Pfizer's associate general counsel, said in a statement.

Four Losses

Wyeth has lost four of seven cases over Premarin and Prempro since they began going to trial in 2006. The company said in securities filings that it faces about 5,300 lawsuits over the drugs, which are still on the market. Plaintiffs' lawyers estimate the total number of cases at about 7,000.

Upjohn has lost both cases that have gone to trial so far over its Provera menopause drug, which came on the market in 1959. Pfizer acquired Upjohn in 2003 as part of a $54 billion acquisition of Pharmacia Corp.

Wyeth said in January that sales of its hormone-replacement drugs reached $1.06 billion in 2007. Sales topped $2 billion before a 2002 study linked the medicines to a higher risk of breast cancer.

The Women's Health Initiative study, sponsored by the U.S. National Institutes of Health, concluded that women who took a combination of estrogen and progestin, as found in Prempro, increased their risk of getting invasive breast cancer by 24 percent. Wyeth revised the labels on its menopause drugs after the study uncovered the cancer link, Deutsche Bank's Ryan said.

Prempro Introduced

Until 1996, some menopausal women used Premarin, which contained estrogen, together with Provera, which contains progestin. That year, Wyeth combined the two substances in Prempro.

Jurors found that the hormone-replacement therapies were a cause of Scroggin's breast cancer and ordered the companies to pay $2.75 million in compensatory damages. Wyeth and Pfizer each will have to pay half under Arkansas law.

Drugmakers' lawyers told the Arkansas jury during the month- long trial that Scroggin had a family history of breast cancer, and both she and her doctor were properly warned about the drugs' cancer risks by the companies.

Morris countered during the trial that Wyeth's warnings were unclear and an attempt to `distract'' women from the threats posed by the drugs. He argued that Upjohn provided no warning at all about Provera's cancer risks.

``When we tear away all the subterfuge and the camouflage, we find that they dismissed'' questions about their products' health risks, Morris said during closing arguments in the punitive-damage phase.

The case is Scroggin v. Wyeth, 04-1169, U.S. District Court for the Eastern District of Arkansas (Little Rock).

To contact the reporter on this story: Jef Feeley at jfeeley@bloomberg.net.

Last Updated: March 6, 2008 16:40 EST