This article was published in the Appellate, California, Life Sciences, and Product Liability sections of Law360 on March 16, 2016. © Copyright 2016, Portfolio Media, Inc., publisher of Law360. It is republished here with permission.

Eight years ago, in Conte v. Wyeth, the California Court of Appeals shocked brand prescription drug manufacturers when it held that they could be liable for injuries caused by generic versions of their medications — an approach often called “innovator liability.”¹ In 2012, the California Supreme Court raised hopes for Conte’s early demise when, in an industrial product case, it signaled its disapproval of holding defendants liable for someone else’s product. Instead, on March 9, a Court of Appeals panel extended the “innovator liability” doctrine to a manufacturer that had sold its interests in the medication in 2001, six years before the prescriptions at issue. In T.H. v. Novartis Pharmaceuticals Corp., the court exposed the brand manufacturer to liability for a label that it was powerless to change.

In Conte, the trial court rejected personal injury claims against both brand and generic manufacturers of metoclopramide, a treatment for gastroesophageal reflux disease. The Court of Appeals — counterintuitively — affirmed dismissal of the claims against the generic manufacturer, but reversed the dismissal of Conte’s negligent misrepresentation claim against the brand manufacturer Wyeth. Although Conte had not used Wyeth’s product, the court said that Wyeth owed a duty to her because it should have foreseen doctors would rely on its warnings when deciding to prescribe metoclopramide, regardless of whether the medication bore Wyeth’s brand or that of a generic manufacturer. This broke with a line of decisions dating back at least to 1994 that conditioned a prescription drug manufacturer’s liability on its having actually manufactured the medication.²

Fortunately for brand manufacturers, Conte did not release a flood of vicarious liability for injuries caused by generic medications elsewhere. Only a federal district court applying Vermont’s law (Kellogg v. Wyeth) and the Alabama Supreme Court (Wyeth v. Weeks) adopted innovator liability, and the Alabama decision was undone by statute. Meanwhile, dozens of state and federal courts rejected the doctrine. This continued to be the case after the U.S. Supreme Court’s decision in Pliva v. Mensing, which preempted most claims against generic manufacturers because federal law requires that they use the brand manufacturers’ labels. With generic liability largely foreclosed, plaintiffs argued that courts should hold liable the brand manufacturers that controlled the labels. Courts consistently refused.

In California, however, Conte remained in place. But, in 2012, the California Supreme Court gave brand manufacturers reason for hope when it held in O’Neil v. Crane Co. that a pipe and valve manufacturer was not liable for injuries allegedly caused by the combination of the manufacturer’s product and other materials because “a product manufacturer may not be held liable in strict liability or negligence for harm caused by another manufacturer’s product unless the defendant’s own product contributed substantially to the harm or the defendant participated substantially in creating a harmful combined use of the products.”³ It stood to reason, brand drug manufacturers believed, that they should not be held liable when their own products played no part in a patient’s injury. If this was the signal intended by the California Supreme Court, however, the California Court of Appeals missed it in T.H. v. Novartis.

The plaintiff in T.H. v. Novartis took a generic version of the asthma medication terbutaline off-label in 2007 as a muscle relaxant to prevent preterm labor. Her twin children were born with autism. She sued multiple manufacturers, including Novartis, which had sold its interests in the medication — and its ability to revise its label — in 2001. Nevertheless, the court, applying Conte, concluded that Novartis’ duty to adequately warn of risks of fetal development in the label it prepared in 2001 extended to patients taking the medication years in the future — presumably for all time. Because the label did not change in the intervening years, the court held that, at the pleadings stage, “it was foreseeable physicians and their patients would continue to rely on Novartis’s product label for adequate warnings” and that “it was foreseeable a subsequent manufacturer would not change the label information, at least not to weaken any warnings about fetal harm Novartis should have included.”

The court ignored that Novartis could not change a word in the label because it no longer held the New Drug Application for the medication.⁴ Novartis could not have changed the label for terbutaline any more than it could have changed the design or manufacturing specifications for any other company’s product. Other courts have found failure-to-warn claims against a non-NDA holder preempted, even when the former NDA holder continued to manufacture the medication for a generic company.⁵ The court also did not attach significance to the fact that the patient’s use was off-label — meaning the injury to the fetuses allegedly occurred from a use that was not indicated by the same Novartis label that allegedly included inadequate safety warnings. Novartis certainly was not promoting the medication for use in labor after it sold its interests in the medication.

The court acknowledged the California’s Supreme Court’s O’Neil decision, but also said that it did not expressly overrule or even mention Conte. It distinguished between the cases because of a perceived unique relationship between brand and generic medications. If the California Supreme Court means to bring its law on prescription drug liability back in line with the rest of the country, it will have to do it expressly — perhaps in review of this very case.

Endnotes

¹ 168 Cal. App. 4th 89 (2008).

² See Foster v. American Home Prods. Corp., 29 F.3d 165 (4th Cir. 1994).

³ 53 Cal. 4th 335 (2012).

⁴ 21 C.F.R. § 314.71(a).

⁵ See In re Darvocet, Darvon & Propozyphene Prods. Liab. Litig., 756 F.3d 917, 940 (6th Cir. 2014); see also In re Fosamax Prods. Liab. Litig., 2012 WL 181411 (D.N.J. Jan. 7 2012) (claim against distributor preempted).