July 21, 2016, Trial News | The American Association For Justice

July 21, 2016, Trial News

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California Supreme Court to review ‘innovator liability’ generic drug case

Kate Halloran

photo of stethoscope and prescription paper

The California Supreme Court has agreed to review whether a brand-name drug manufacturer can be held liable for injuries caused by its generic equivalent. The plaintiffs in the case before the court have alleged that a brand-name drugmaker is liable for failure to warn and negligent misrepresentation even if the patient took a generic version manufactured by a different company—known as “innovator liability”—because generic drug labels follow the brand-name drug’s label.
 

The California Supreme Court has agreed to review whether a brand-name drug manufacturer can be held liable for injuries caused by its generic equivalent. The plaintiffs in the case before the court have alleged that a brand-name drugmaker is liable for failure to warn and negligent misrepresentation even if the patient took a generic version manufactured by a different company—known as “innovator liability”—because generic drug labels follow the brand-name drug’s label.

Two minor children and their father sued Novartis Pharmaceuticals Corp., the former manufacturer of the asthma medication terbutaline, for failure to warn of the risks to fetal development when the medication is used off-label to prevent or delay preterm labor. The children’s mother took terbutaline for that purpose in 2007, but Novartis had sold its rights to the drug in 2001. The plaintiffs argued that even though the mother took a generic version of the drug, Novartis knew of the risks associated with the off-label use long before it sold the drug, and therefore had a duty to update its warning labels and to make doctors aware of the risks.

As early as the 1970s, medical researchers began to question the safety and efficacy of using terbutaline as a “tocolytic”—drugs used to suppress premature labor. Studies indicated that the drug could have detrimental health effects on pregnant women—including pulmonary edema and congestive heart failure—and unborn children—including delayed cognitive development leading to learning and behavioral difficulties. In 1993, the FDA asked terbutaline manufacturers to submit applications to revise their labels to include use as a tocolytic, but none did. They altered the drug’s labels to warn against tocolytic use, but the plaintiffs asserted that only minor risks to pregnant women were mentioned and nothing about risks to the fetus. By the late 1990s, medical associations and the federal government were discouraging the use of terbutaline for treating preterm labor.

The plaintiffs’ mother was prescribed a generic version of the drug in 2007 while hospitalized for preterm labor, and she continued to take the drug for nearly a month before her twins were born. When the twins were three years old, they were diagnosed with developmental delays. After the plaintiffs sued Novartis, the defendant filed a demurrer with the trial court, arguing that it owed no duty to the plaintiffs because the mother took a generic version of a drug it no longer owned. The trial court sustained the demurrer, and the appellate court reversed, allowing the plaintiffs to include the allegations for failure to warn and negligent misrepresentation against Novartis in their complaint.

The appellate court relied on Conte v. Wyeth (85 Cal. Rptr. 3d 299 (Cal. Ct. App. 2008)), which held that “the common law duty to use due care owed by a prescription drug manufacturer when providing product warnings extends not only to consumers of its own products, but also to those whose doctors foreseeably rely on the manufacturer’s product information . . . even if the prescription is filled with the generic version.” The Conte court distinguished between a cause of action for negligence and one for strict products liability, noting that if a plaintiff alleged strict liability, the defendant would not be liable because it did not manufacture or sell the drug.

But for claims based in negligence, the manufacturer’s liability rests in common law principles of foreseeability and duty. The Conte court reasoned that the manufacturer had a duty to prevent harm to others from using its product, and that it was reasonably foreseeable that patients would rely on product information and warnings from the brand-name version of a drug even if they took the generic version.

Here, the appellate court was not persuaded that Conte did not apply because Novartis had sold its rights to the drug before the alleged injuries occurred. The court reasoned that Novartis had enough information before 2001 to amend its drug label, and that it was foreseeable that doctors and patients would continue to rely on the brand-name drug’s label, especially since any generic drugmakers were unlikely to alter that label. The court noted that “the unique relationship between brand-name and generic drugs as a result of federal law . . . combined with the learned intermediary doctrine and the fact that representations regarding prescription drugs are made not to the plaintiff but to a third party” distinguish these cases from other products liability cases.

In their answer to the defendant’s cert petition, the plaintiffs stated that aside from their claims’ being grounded by California case law, there are strong public policy reasons for holding brand-name manufacturers liable in these circumstances.

California attorneys Benjamin Siminou and Leslie Brueckner, who are handling the case, said that the court’s decision is “hugely significant in terms of public health and safety,” especially in light of recent U.S. Supreme Court decisions—such as PLIVA, Inc. v. Mensing—that leave people with little recourse when injured by generic drugs. “If the California Supreme Court were to reverse the court of appeal’s ruling in this case—and thereby abrogate Conte v. Wyeth—it would be highly dangerous for consumers. In particular, it would mean that brand-name manufacturers—which, under Mensing, are currently the only entities other than the FDA that can update a warning label—would have significantly less incentive to update drug labels with necessary warnings. As a result, consumers of generic drugs would have little confidence that the warning labels on their prescription drugs were accurate and up-to-date. Many individuals would be needlessly harmed by dangerous drugs they would never have taken if they had known the real dangers of the drugs. If the California Supreme Court holds that brand-name drugmakers can’t be sued for a generic drug company’s failure to warn, more people will be injured and killed from the drugs that were supposed to help make them well. It’s that simple,” they said.

The attorneys noted that the widespread use of generic drugs in the United States is part of why it is so important that drugmakers adequately warn people of drug risks—or be held accountable when they don’t. “Seventy-five to 90 percent of the drugs consumed in the United States are generic forms of brand-name drugs. And the FDA does not have the resources to ensure the many hundreds of prescription drugs on the market bear accurate and up-to-date labels. So, cases like this one make up the vast majority of instances when people are harmed by prescription drugs. What happens here will affect millions of people going forward,” they said.

California is in the minority of states allowing brand-name drug manufacturers to be held liable for injuries arising from the generic equivalent. In 2014, the Alabama Supreme Court upheld innovator liability in a similar case, Wyeth, Inc. v. Weeks (2014 WL 4055813 (Ala. Aug. 15, 2014)), but the state legislature amended its products liability statute in 2015 to eliminate this option. But Siminou and Brueckner believe that California has it right: “California is at the forefront in this area. Most other states have refused to allow brand-name drug companies to be sued when the victim took a generic version of the drug, based on outdated notions of products liability law. California’s approach—to assign liability to brand-name manufacturers who unreasonably fail to update their drug labels—makes good sense, both as a matter of doctrine and policy, and, not coincidentally, it is on the upswing.”