Thursday, October 04, 2012

Innovator Liability for Generic Drugs: The Answer Is Still No


What follows is a "guest post" by Melissa Wojtylak of Reed Smith.  We place the term in quotes because Melissa has expressed an interest in becoming a member of our crew of merry blogsters.  We're inclined to say yes (anything that reduces our own workloads is great), so expect to reading more of her work.
We (or at least Bexis) also has to say that Melissa, in addition to her other accomplishments, is also a very nice person.  We (or at least Bexis) were inclined to be quite a bit more sarcastic about the subject of this article.
As always, Melissa deserves all the credit and assumes all the blame for what follows.
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In our line of work, when you read anything that starts with the statement “[p]harmaceutical adverse effects are a leading cause of death and injury in America,” you know you’re at an away game.  This is precisely how a recent Comment in the George Mason Law Review begins.  As we noted in yesterday’s post, in the Comment, which is titled Picking Up the Tab for Your Competitors: Innovator Liability After Pliva, Inc. v. Mensing, the author waves the now-tattered banner of Conte v. Wyeth, Inc., 85 Cal. Rptr. 3d (Cal. App. 2009), and sets out his argument for why, in a post-Mensing world, brand-name manufacturers should be held liable for failure-to-warn claims brought by users of generic drugs – in essence, the holding in Conte – a holding that’s been rejected more times than a telemarketer calling during an American Idol finale.
Regular readers of this blog know how we feel about Conte.  It’s safe to say that the George Mason Law Review Comment has not changed our minds, although it has made us wonder what they’re teaching these days in torts classes at the George Mason Law School.  In any event, from our perspective, the Comment offers no compelling argument – much less legal justification – that supports a rejection of decades of established law, well-supported by practical considerations such as linking liability with responsibility, which holds that manufacturers cannot be liable for injuries to users of products that they did not sell.
One slight digression before we look at the Comment.  In support of the statement that adverse drug events are a leading cause of death and injury in America, the Comment relies upon a journal article from 2000, which in turn appears to rely on 1998 statistics.  Comment, n. 1.  We’re not sure where adverse events placed in 1998, but according to the most recent published CDC statistics, the leading causes of death in the United States are, in order of prevalence: heart disease, cancer, chronic lower respiratory diseases, stroke/cerebral vascular disease, and then accidents of all kinds, including adverse drug events.  Not to belabor the point, but according to CDC data, approximately five times more people die from heart disease each year than from any kind of accident; nearly the same ratio exists for deaths from cancer versus deaths from accidents.  So we’re not sure that it’s fair to characterize adverse drug effects as a “leading cause of death and injury in America.”  We’d characterize this statement (in polite company) as hyperbole.
On to the Comment’s treatment of innovator liability.  The Comment is divided into three parts:  (1) a discussion of the law on failure-to-warn claims in the drug context, (2) the argument for imposing liability on brand-name manufacturers even when the drug at issue is a generic, in the wake of Mensing, and (3) an argument for changing the law to allow generic manufacturers to make labeling changes.  As you might expect, we’ll focus mainly on Part Two, although there are certainly points that we take issue with in Parts One and Three.      
To its credit, the Comment acknowledges that the concept of innovator liability has received little support among courts or commentators.  Comment, p. 1273.  However, the author loses us immediately thereafter, when he opines that this is “based more on a perception that innovator liability is unfair or wrong than on a judgment of the legal merits of its underlying rationale.”   Comment, p. 1273.  Wait a minute – a little perspective, please.  Sure, commentators will say what they will.  But at last count, according to this blog’s branded/generic scorecard, courts have rejected the concept of innovator liability at least seventy three times (versus four that have accepted it) – and that doesn’t include the California Supreme Court, which in its opinion in O’Neil v. Crane Co., 53 Cal.4th 335 (2012), discussed here, impliedly overruled the Court of Appeal’s pure foreseeability creation in Conte.  Not all of these seventy-three smackdowns can be the work of judges who are overly sympathetic to branded drug companies.  And we suspect all of these judges, if asked, would take exception to the suggestion (heck, the outright statement!) that they rejected innovator liability without looking at “the legal merits of the underlying rationale.”

The Comment goes on to criticize courts’ adherence to the fundamental principle of product liability law that a manufacturer owes no duty to consumers of a product that it did not make, asserting that this “view” fundamentally misunderstands “the nature of products liability law in particular and of tort law in general.”  Comment, p. 1274.  Oh, really?  We’d love to hear the basis for this sweeping statement, since the “view” being criticized has worked pretty well for a lot of courts, and is in line with the justifications for having products liability law in the first place - justifications set out in, inter alia, Restatement (Third) of Torts, Products Liability §2, comment a (1997), such as “creating safety incentives,” “encourag[ing] greater investment in product safety,” and “causing the purchase price of products to reflect . . . the costs of defects.” 

But in the Comment, we never really do hear WHY the product identification requirement misses the mark.  Instead, the author argues that because brand-name drug manufacturers know that generic manufacturers must use the same warnings that were approved for the branded products, it does not overly stretch the concept of foreseeability to assume that “generic drug patients” will rely on the warnings drafted by brand-name manufacturers.  (Presumably the author means that prescribers, not patients, will rely on the warnings).  Basically, the plaintiffs are “foreseeable” just because they exist.  The author never makes a compelling argument for departing from the long line of cases holding that this result actually DOES overly stretch the concept of foreseeability.  Notably, the author never addresses the extended trashing of the “pure foreseeability” standard by the California Supreme Court in the O'Neil opinion.  Rather, at the end of the day, the Comment’s argument that branded manufacturers’ duty to warn should extend to the entire world seems to be based on the fact that it just seems reasonable and fair to the author - a “compensation uber alles” view of the law.  This, of course, begs the question of why, in the author’s opinion, it’s wrong for courts and commentators to reject innovator liability based on their differing perceptions of what is "unfair," but acceptable to argue FOR it on the basis that it’s unfair NOT to impose it.

The Comment next takes a swipe at established principles of proximate causation, again arguing that proximate cause can be established because it’s foreseeable to the brand-name manufacturer that generic manufacturers will use the branded product’s warnings, and it’s foreseeable to the brand-name manufacturer that someone taking a generic version of the drug could be harmed if those warnings are inadequate.  Comment, p. 1280.  Essentially, this is the same sort of conclusory argument put forth by the author with regard to duty:  it’s foreseeable because it’s foreseeable.  The author goes on to argue that a finding of proximate causation is “required” under the learned intermediary doctrine, but cites only to Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994) (rejecting expanded duty), where the prescriber supposedly testified that he relied on the branded drug’s warnings, not the generic drug’s.  (As an aside, because we can’t resist:  that’s certainly not what happened in Conte, where the court pulled reliance out of thin air).  It’s not clear to us - nor to any court, apparently - why the learned intermediary doctrine per se mandates a finding of proximate cause in any case involving a generic drug.  Clearly, there are many ways in which a prescriber learns or should learn about the drugs he or she is prescribing; at the very least, this would seem to require that the adequacy of the warning be established on a case-by-case basis.
The Comment’s author defends its proximate cause argument by stating that holding the innovator liable is not an unjust form of vicarious liability.  Well, on that we agree.  What the author is suggesting is NOT vicarious liability - it’s sole and absolute liability, making the branded manufacturer a provider of free insurance for all later companies that copy its product.  Taking this to the logical next step, presumably a generic manufacturer sued for an alleged failure to warn would have the right to seek common-law indemnification from the brand-name manufacturer.  This thought, however repugnant, provides a good segue for our thoughts on the next section of the Comment, in which the author discusses the implications of holding innovators liable to users of generics.  Here, the author makes the astounding argument that even where the brand-name manufacturer stops making the drug, it should remain liable for failure to warn claims brought by users of generics, arguing that “discontinuing sales of the product should not insulate it from liability when generic drug patients are still relying on the warning.”  Comment, p. 1287.  So, liability in perpetuity?  Really?  The author does attempt to throw brand-name manufacturers a bone here, suggesting that this infinite liability could be curtailed by a statute of repose, which would protect the innovator from liability for harm that could not have been foreseen when it was making the drug.  Practically speaking, though, this is little comfort, given the likelihood that plaintiffs will merely argue that if the manufacturer had conducted the right studies, the harm could have been known and warned about.  (Another aside here: we wonder if this liability scheme would be limited only to innovator drug companies, or would apply to manufacturers of other products?  For example, if an auto manufacturer (say GM) went bankrupt (sound familiar?), could Chrysler be liable for a purported failure to warn concerning a GM car because NHTSA requires the same (purportedly inadequate) warnings on automobiles - say, about airbag inflation?).
The same is true for the Comment’s suggestion that Congress could change existing laws in order to allow generic drug manufacturers to make labeling changes unilaterally. Under the liability principles espoused in the Comment, doesn’t this just create a scenario in which a plaintiff could argue that BOTH the brand-name and the generic manufacturer are liable to her for allegedly inadequate warnings?  And isn’t the desire to avoid different and inconsistent labeling for the same drug one of the reasons that we have an FDA regulatory framework in the first place?
Clearly, the Comment’s true gripe is with the preemption doctrine of Mensing.  If the author believes that Mensing got it wrong, then he’s right to think about how to change the rules of the game.  However, a paradigm shift such as that proposed in the Comment, which would allow for an end-run around established principles of causation in the name of compensation, is not the answer.
As we said yesterday, after reading the Comment, we still believe that its premise – i.e., that it’s appropriate for brand-name drug manufacturers to be held liable for harm to users of generic drugs - is bad policy that creates bad law.  Thankfully, an overwhelming majority of courts continue to agree with us.

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