Wednesday, August 27, 2014
Alabama Supreme Court reaffirms holding that name brand manufacturers can be held liable for defective warnings in generic drugs they did not manufacuture
As you probably know, current FDA rules prevent generic drug manufacturers from altering, updating or changing the content of warnings in the labels of the drugs they manufacture. That content is determined by the name brand manufacturers based on FDA guidelines. If name brand manufacturers issue defective warnings, there is nothing the generic manufacturers can do to fix them. For this reason, they have enjoyed immunity from lawsuits. In a recent example, the Court of Appeals for the Third Circuit affirmed a trial court’s order dismissing a claim against a number of generic drug manufacturers in a case related to the drug Fosamax.
So, let's assume that a consumer is injured because of a defective warning in a generic drug that originates in the warning provided by the name brand manufacturer. Because the consumer probably can't recover from the manufacturer of the generic drug (because of preemption), some plaintiffs have attempted to sue the brand name manufacturers. After all it was their warning that caused the problem to begin with. But in response to that, name brand manufacturers have tried to avoid liability arguing they should not be liable for injuries caused by drugs they did not manufacture or distribute and that the claims are preempted by federal law.
These arguments may be a valid if the claim is based on either manufacturing or design defects but not necessarily when it relates to warnings. Otherwise, the consumer has no recourse at all. They can't sue the generics because they don't have control over the warning, and they can't recover from the brand-name companies because they did not produce the product. Tough luck.
Given this state of affairs, there are two possible approaches. One is to recognize a cause of action against the brand name manufacturers. That's the approach taken by the court in Alabama and by a few other courts. One key to this approach is that the claim against the manufacturer of the generic product does not have to be based on products liability principles at all. (If it is, the plaintiffs may have a hard time arguing against the preemption argument.) Instead, the claim can be based on simple negligent misrepresentation. There is a short article in this month's issue of Trial magazine which explains the difference. The article is called Brand-name Liability for Inadequate Drug Labels.
The other alternative is to change the FDA rules and allow (and presumably encourage) generic manufacturers to provide their own content when it comes to labels and warnings.
As you know, there has a been quite a debate recently about whether the FDA should change the rules (see here, here, here, and here), and not surprisingly generic drug manufacturers have opposed the proposal. You would think that manufacturers interested in making sure their products are safe would welcome the new rule. However, because the current system works to immunize generics manufacturers, a change that would work to make the products safer would also open the door to possible liability. Thus, as you would expect from those who are more interested in profit than safety, the manufacturers hired a consulting firm in an attempt to show that changes in the rules would be bad for consumers. Consumer agencies, on the other hand, have campaigned for the adoption of new rules (also here).
The decision by the Alabama Supreme Court has also generated some debate. Here is an article arguing that the court reached the correct decision. Here is an article criticizing it.
As I said above, I am with those who think the decision is correct. It makes logical sense and it is based on good public policy. The article arguing the decision is wrong, makes several mistakes. First, it is not true that products liability has been based on privity of contract. That has not been the case for ages. The whole notion of products liability is based on the idea that consumers should be allowed to recover for injuries from defendants with whom they have had no relationship. Also, the fact that the injury may happen years after the manufacturer places the product in the market is very common and if it is a problem it is the plaintiff's problem since he or she has the burden to prove causation. Neither argument points to anything wrong or unfair about recognizing a cause of action.
And, of course, no article regarding possible liability of drug manufacturers is complete without a reminder that possible liability means no more life saving drugs, dogs and cats living together and the end of the world. Do you really think that one of the most profitable industries in the US and world wide will stop manufacturing or reduce its ability to make more profits? I don't. Making a few million less a year to assure our safety while staying profitable is not that much to ask.
UPDATE 5/14/15: The Alabama legislature has sent a bill to the governor that would overturn the result in Wyeth v. Weeks. The bill passed the Senate 32-9 and the House 86-14. Legal Newsline has the story.