California Supreme Court to Review Unprecedented Expansion of Negligence Liability

The California Supreme Court granted review in Gilead Life Sciences v. Superior Court—a hopeful turn of events after lower courts issued decisions that resulted in an unprecedented expansion of negligence liability for pharmaceutical manufacturers.

Gilead Life Sciences is a coordinated proceeding involving two separate HIV medications. The plaintiffs assert that although the drug at issue was effective in suppressing the effects of HIV, the active ingredient in the drug, tenofovir disoproxil fumarate (TDF), caused harmful side effects. Rather than arguing that the TDF drug is defective, the plaintiffs argued that Gilead was not quick enough to develop a different drug containing tenofovir alafenamide fumarate (TAF), which allegedly had less user side effects.

Gilead filed a motion for summary judgment, arguing that the plaintiffs were required to prove that the product is defective. The California Superior Court denied Gilead’s motion and allowed plaintiffs to proceed with their theory that Gilead was negligent because of the purported delay in developing the TAF drug. On appeal, the California Court of Appeal affirmed, holding that the plaintiffs could pursue a negligence cause of action against a prescription drug manufacturer for failure to bring an alternative, allegedly safer drug to market sooner, even though the plaintiffs do not assert that the original drug they actually used is defective. The California Supreme Court will now review the lower court’s decision.

Pharmaceutical manufacturers are understandably concerned that the lower court’s decision significantly expanded negligence liability. The decision could be interpreted to impose a duty on manufacturers to develop a product faster—i.e., a “duty to innovate”—which may not take into account that a drug will come with its own unique set of risks and complications, and the newer product may not improve drug safety for all potential patient groups.

Several pharmaceutical companies, non-profit organizations, and trade groups have joined in amicus letters to the Supreme Court, explaining that this so-called duty to innovate would chill scientific innovation. Other industries are also concerned that this theory could expand into non-medical industries. The National Association of Manufacturers and other consumer product companies explained in amicus letters: “Nothing in the decision below applies exclusively to the pharmaceutical context . . . now, discarded ideas and prototypes, rather than stepping stones on the path to success, could become the basis of lawsuits.”

Despite the California Court of Appeal’s characterization of this novel duty as “narrow,” it should not be underestimated. We will continue to monitor the case and provide ongoing updates.

[View source.]