It’s no secret that pharmaceutical companies are among the more litigious businesses in America. Up until 2003, when Congress stepped in, the big drug makers had a good thing going: whenever the patent was about to expire on one of their blockbuster drugs, they would file a new patent for trivial modifications to the medicine, and thereafter would sue generic drug manufacturers claiming that the generic version of the old drug somehow infringed on the new patent.

Here’s the kicker: the big drug makers knew these patent infringement claims were frivolous, so they would enter into a “settlement” in which the big drug company — which nominally brought the case to recover monetary damages — would pay the generic company not to manufacture the generic drug anymore. Crazy, huh?

So crazy and so hopelessly anticompetitive that in 2003 Congress amended the Hatch-Waxman Act to force the major drug companies to report all of these “exclusive-payment” patent settlements to the Federal Trade Commission. The FTC still keeps an eye on them and keeps filing amicus briefs to make sure courts realize how damaging that practice is. As I’ve discussed before, some unions and health plans, stymied by the Illinois Brick decision precluding antitrust claims by indirect purchasers, have tried recovering the inflated health care expenses by filing unfair trade practices lawsuits.

The pharmaceutical companies are also not strangers to deceiving the federal government; over the past decade they’ve paid several billion dollars in qui tam cases, the result of brave whistleblowers exposing the fraud at great personal cost.

So pardon me if I don’t think that pharmaceutical companies deserve a special exception from the basic legal responsibilities we all have to one another just because they claim litigation is expensive or because they claim that always tell the FDA the truth. That sort of special treatment is what they’re trying to get with “tort reform” in the Pennsylvania legislature, and what they’re claiming they’re owed in the courts:

In questioning during oral argument Tuesday in Philadelphia, a state Supreme Court justice characterized the drugmaker Wyeth as asserting that there is enough protection for persons harmed by prescription drugs in federal regulation of the release of drugs onto the market, and limiting plaintiffs to lawsuits for drugmakers’ alleged failures to adequately warn of risks.

Plaintiffs are arguing in a case that could change the landscape of pharmaceutical products liability law in Pennsylvania that drugmakers can be sued for the negligent design defect of their drugs.

Questioning the plaintiffs’ lawyer, Justice Max Baer also said that Wyeth asserts that Pennsylvania would chill the manufacturing of prescription drugs if pharmaceutical companies can be sued for the negligent design defect of their drugs. He asked the lawyer to address why that may not be so.

The case, Lance v. Wyeth, arises from a primary pulmonary hypertension death allegedly caused by Redux, a hopelessly dangerous diet drug that causes a host of medical conditions which was yanked from the market for causing valvular heart disease. No one credibly disputes that the drug should never have been marketed or sold in the first place: it combined two drugs known to cause cardiovascular problems. Had Wyeth (now owned by Pfizer) properly tested it, they probably would never have sold it. Had they properly warned doctors and patients of the real risks, no doctor would have prescribed it and no patient would have taken it.

If dangerous drugs were automobiles with defective air bags (like Gaudio v. Ford Motor Co.), or rollover-prone all-terrain vehicles (like Smith v. Yamaha Motor Corp.) there wouldn’t be a question of the applicable law. Everybody — you, me, lemonade stands, multinational corporations, and everyone in between — has the same general legal duty to exercise reasonable care not to cause injuries to others. If we don’t exercise that reasonable care, we’re negligent, and we’re responsible to pay for the damage we cause.

That’s how the tort of negligence works. It’s quite simple.

In addition to their responsibility to pay for all negligently caused damages, everyone who sells products — again, from the lemonade stand to the multinational corporation — has “strict liability” for all damages caused by defective products. Consider that defective air bags case above:

[W]e will briefly review the history of products liability law and the crashworthiness doctrine in this Commonwealth. Our Supreme Court first adopted section 402A of the Restatement (Second) of Torts in Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966). To state a section 402A products liability claim in Pennsylvania, the plaintiff must prove that the defendant sold a product “in a defective condition,” that the defect existed when the product left the defendant’s hands, and that the defect caused the plaintiff’s injuries. See, e.g., Hadar v. AVCO Corp., 886 A.2d 225, 228 (Pa.Super.2005). A product is “in a defective condition” when it lacks “any element necessary to make it safe for its intended use or possessing any element that renders it unsafe for the intended use.” Azzarello v. Black Bros. Co., Inc., 480 Pa. 547, 559, 391 A.2d 1020, 1027 (1978). Because the key inquiry in all products liability cases is whether or not there is a defect, it is the product, and not the defendant’s conduct, that is on trial. See, e.g., Hutchinson v. Penske Truck Leasing Co., 876 A.2d 978, 983 (Pa.Super.2005), affirmed, 592 Pa. 38, 922 A.2d 890 (2007).

Gaudio v. Ford Motor Co., 976 A. 2d 524 (Pa. Super. Ct. 2009)(remanding for trial a crashworthiness claim).

But Section 402A of the Second Restatement of Torts has a pesky “comment k” for defective drug cases which says:

There are some products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. These are especially common in the field of drugs. . . .  Such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous.  The same is true of many other drugs, vaccines, and the like, many of which for this very reason cannot legally be sold except to physicians, or under the prescription of a physician. . . .  The seller of such products, again with the qualification that they are properly prepared and marketed, and proper warning is given, where the situation calls for it, is not to be held to strict liability for unfortunate consequences attending their use, merely because he has undertaken to supply the public with an apparently useful and desirable product, attended with a known but apparently reasonable risk.

Defense lawyers contend that comment k promises pharmaceutical companies total and complete immunity from all potential theories of liability except for a narrow class of “failure to warn” claims. Wyeth argued that the sole question is “whether the risk information conveyed to prescribing physicians was sufficient to permit them to conduct an individualized risk-benefit analysis.”

Nonsense.

The plaintiffs in Lance were smart to hire Howard Bashman, friend of the blog, for their appeal, and his excellent opening brief and reply are both online. So, too, is the joint American Association for Justice and Pennsylvania Association for Justice amicus brief.

The briefs quite adequately cover Pennsylvania law on the subject, all the Incollingo v. Ewing, 444 Pa. 263, 282 A.2d 206 (1971)(a Jim Beasley case), Baldino v. Castagna, 505 Pa. 239, 478 A.2d 807 (1984), and Hahn v. Richter, 543 Pa. 558, 673 A.2d 888 (1996) a drug liability law nerd could ask for.

Personally, I think two arguments should decide Lance v. Wyeth.
Continue Reading