Original Drug Manufacturer Owes New Tort Duties When Generics Take Over

by Low, Ball & Lynch
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T.H., a Minor v. Novartis

Fourth Appellate District, Division One

The California Supreme Court upheld the Court of Appeal’s decision allowing individuals who were injured by a generic drug to sue the brand-name pharmaceutical company who manufactured the drug years before.

In this case, Plaintiffs’ mother was prescribed terbutaline, a generic form of the brand name drug Brethine (manufactured by Novartis Pharmaceuticals Corporation “Novaris”). The drug was used to suppress premature labor during her pregnancy. Novaris stopped manufacturing the drug and sold the rights to the drug six years before plaintiffs’ injury.

Plaintiffs were born full term however, at three years old they were diagnosed with developmental delays and autism by the time they turned five. The minor Plaintiffs (through their guardian ad litem) allege that those responsible for the label knew or should have known that the drug Brethine posed a serious risk for developmental and neurological damage to the fetus. They further allege that the drug’s label unreasonably failed to include a warning about this risk.

This case presented two issues concerning duty. The first was whether a prescription drug manufacturer owed a duty to individuals who used a generic product manufactured by a competitor. The next was whether the brand drug manufacturer also owed a duty to those individuals who used the competitors drug years after the original drug manufacturer ceased selling the drug.

The Court’s determination was based on a careful review of the federal regulatory scheme and an analysis of whether an exception existed to the brand-name manufacturer’s duty to warn (Rowland v. Christian (1968) 69 Cal.2d 108, 113). Federal law explicitly states that the brand-name manufacturer has the responsibility to provide an adequate warning label for both generic terbutaline and its brand-name equivalent, Brethine. Generic drug manufacturers are required to follow the brand-name manufacturer’s label to the letter. Here, Novaris the manufacturer of Brethine controlled both the form and content of the generic brand terbutaline warning label.
The Court held that the brand name-manufacturer can be liable for the competitors’ generic products when years earlier prepared the product warnings that were later used by the generic drug manufacturer. The Court’s primary rationale was that the brand-name drug manufacturer could foresee that a generic manufacturer would use substantially the same label and not change or update the label. They also found that the degree of certainty that Plaintiffs suffered neurological-development delays was clear. The closeness in connection between Novaris’ conduct and Plaintiffs’ injuries was also established as the label for the generic brand-product was the same as the brand-name Novaris product.

Lastly, the Court determined that the original drug manufacture owes a duty of reasonable care to the individual users of the generic drug and that liability for potential negligence does not automatically terminate upon transfer of the company’s rights in the name brand drug to another manufacturer. The brand manufacturer still owes a duty to the users of a generic brand, even after the original manufacturer sells the rights to the drug to another company and stopped selling the drug.

CONCLUSION

The California Supreme Court expanded foreseeability to a brand-name drug manufacturer and created a new tort duty.

For a copy of the complete decision, see: T.H., a Minor v. Novartis

 

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