Friday, December 22, 2017
S.C. Expands Drug-Maker Liability Over Labels
Lawsuit Is Reinstated Against Manufacturer That No Longer Makes a Brand-Name Medicine And the Product Causing Harm Was a Generic Version of That Product
By a MetNews Staff Writer
A pharmaceutical company that no longer manufactures a particular drug can be held liable for injuries occurring years later as the result of a deficient warning label on a generic version of the medicine made by another company, the California Supreme Court held yesterday in a 4-3 decision.
Justice Mariano-Florentino Cuéllar wrote for the majority, and Justice Carol Corrigan supplied a concurring and dissenting opinion.
Corrigan opined that it makes sense to hold the maker of a brand-name drug liable for omissions on labels of generic drugs because all labels must conform to the wording on the brand-name label. But, she argued, it is not reasonable to “extend indefinitely a drug manufacturer’s duty to warn the customers of its successor, even after sale of the product line.”
The case was brought by a father on behalf of his two minor children, twins who are designated T.H. and C.H. They are autistic, allegedly as a consequence of his wife ingesting a prescribed drug in 2007 while pregnant.
Designed to provide relief from allergies, the drug was used by some women to deter premature labor, based on a Swedish study finding it efficacious for that purpose (though later studies questioned the conclusion). The label did not represent its usefulness for that purpose—but did not warn that studies showed there was a risk to fetal brain development if used by a woman who was pregnant.
The brand name for the drug is “Brethine.” It was manufactured by defendant Novartis Pharmaceuticals Corporation until December 2001 when it sold rights to another company.
It was not Brethine that the mother took, however, but a generic version of it, Terbutaline.
San Diego Superior Court Judge Joan M. Lewis sustained demurrers without leave to amend. Div. One of the Fourth District Court of Appeal reversed, agreeing that the complaint was defective, but ordering that leave to amend be granted.
Presiding Justice Judith McConnell wrote:
“We conclude the minors have demonstrated they can amend their complaint to state a claim under California law for negligent failure to warn and negligent misrepresentation based on acts or omissions by Novartis prior to 2001, which allegedly caused or contributed to the minors’ injuries in 2007.”
She relied on the First District’s 2008 opinion in Conte v. Wyeth, Inc.
There, Justice Peter J. Siggins of Div. Three wrote:
“As Conte asks, what is unfair about requiring a defendant to shoulder its share of responsibility for injuries caused, at least in part, by its negligent or intentional dissemination of inaccurate information? California law is well established that concurrent tortfeasors whose separate acts contribute to an injury are each liable…, and we see nothing novel or unjust in recognizing application of the rule in the present circumstances. The circumstances certainly do not warrant creating an exception to the general rule of concurrent liability.”
The California Supreme Court granted review, limiting consideration to the question: “May the brand name manufacturer of a pharmaceutical drug that divested all ownership interest in the drug be held liable for injuries caused years later by another manufacturer’s generic version of that drug?”
In her concurring and dissenting opinion—joined by Chief Justice Tani Cantil-Sakauye Justice Leondra R. Kruger—Corrigan said:
“[A]lthough I join the majority’s decision to affirm Conte v. Wyeth, Inc. (2008) 168 Cal.App.4th 89, I dissent from its holding that predecessor manufacturers have a duty to warn their successors’ customers about risks of a product they no longer make or sell.”
Cuéllar explained that not only are makers of generic drugs required to use the same warning label that appears on the brand name counterpart, but only the manufacturer of the brand name version may add to the wording, as initially approved by the Food and Drug Administration, to beef it up. He wrote:
“In our view, plaintiffs have indeed shown that they could allege a cause of action against Novartis for warning label liability. Because the same warning label must appear on the brand-name drug as well as its generic bioequivalent, a brand-name drug manufacturer owes a duty of reasonable care in ensuring that the label includes appropriate warnings, regardless of whether the end user has been dispensed the brand-name drug or its generic bioequivalent. If the person exposed to the generic drug can reasonably allege that the brand-name drug manufacturer’s failure to update its warning label foreseeably and proximately caused physical injury, then the brand-name manufacturer’s liability for its own negligence does not automatically terminate merely because the brand-name manufacturer transferred its rights in the brand-name drug to a successor manufacturer.”
He pointed out that this was not a situation where the undisclosed risk was uncovered after Novartis transferred ownership of the drug. Rather, Cuéllar said, it was known before the transfer, so that that the label was deficient at the time of the transfer.
The jurist said that foreseeability of harm exists not only to the extent of certainty that brand-name manufacturer’s label will be used on generic versions, but in other respects. He said:
“A brand-name manufacturer will also be aware that although the warnings communicated in its drug label are designed for physicians — and are intended to influence a physician’s decision whether to prescribe the drug…—it is often the pharmacist who actually decides whether the patient receives the brand-name drug or its generic bioequivalent….Moreover, many insurance companies require the substitution of a generic drug for the brand-name drug as a matter of course, unless the physician justifies use of the branded drug….Accordingly, it is entirely foreseeable that the warnings included (or not included) on the brand-name drug label would influence the dispensing of the generic drug, either because the generic is substituted by the pharmacist or the insurance company after the physician has prescribed the brand-name drug, or because the warning label on the generic drug is legally required to be identical to the label on the brand-name drug.”
Cuéllar said both the seller and the buyer, aaiPharma Inc., which made no changes to the label, could be found liable. He observed:
“Because a defendant’s liability for noneconomic damages is not joint but several…, a negligent brand-name manufacturer would be liable for noneconomic damages only in an amount that was directly proportional to its percentage of fault.”
He remarked that the seller of a brand-name drug to another manufacturer “could entirely avoid the prospect of extended exposure by including an indemnification provision when it transferred ownership….”
The case is T.H. v. Novartis Pharmaceuticals Corporation, 2017 S.O.S. 6346.
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