Wyeth Decision Threatens ‘Litigation Explosion’

Published January 27, 2009

The California Supreme Court last week refused to review a controversial Court of Appeal ruling that decreed the manufacturer of a “pioneer” drug can be held liable for injuries resulting from allegedly inadequate labeling on the drug’s generic equivalent. The case involves Wyeth’s pioneer drug Reglan, which the firm stopped making in 2001. The plaintiff’s doctor prescribed Reglan, but the pharmacist filled the prescription with the generic version.

When complications developed, the plaintiff sued the generic drug manufacturer for product liability, but Wyeth could not be sued under this theory because it did not make the drug the patient actually took. So the plaintiff claimed Wyeth made negligent or intentional misrepresentations on the pioneer drug’s label, a novel theory under California law. The trial court tossed out this claim against Wyeth, but the Court of Appeal reversed.

Wyeth asked the California Supreme Court to review the appellate decision, which the court declined to do. The Court of Appeal decision now stands.

“Manufacturers of products that cause injury have always been liable for injuries caused by their products,” said Maureen Martin, senior fellow for legal affairs at The Heartland Institute. “This makes sense as a matter of legal and social policy because it acts as an incentive for the manufacturer to refrain from making and marketing defective products. But to extend liability under a misrepresentation theory stands this policy on its head.

“This decision will undoubtedly lead to a litigation explosion against pharmaceutical companies from the plaintiffs’ bar, which all of us will pay for through lack of new drug development,” Martin said. “This ruling comes only from a single appellate panel in one appellate district, however, so other cases are likely in other appellate districts in the future. The California Supreme Court will have other chances to rule on this issue.”

“In its search for deep pockets, the California courts have decided a company can be sued for the damages caused by a product it didn’t manufacture, didn’t distribute, and didn’t sell,” said Greg Scandlen, a senior fellow of The Heartland Institute and founder and director of Consumers for Health Care Choices at The Heartland Institute. “This is like Alice in Wonderland, where words and liabilities mean whatever the Queen of Hearts decides they should mean.”

“The California Court of Appeal became the first appellate court in the nation to let a civil case go forward against a product manufacturer by a consumer who used the generic equivalent of that product,” said Jeff Emanuel, managing editor of Heartland’s Health Care News.

“Last week’s decision by the California Supreme Court to deny the petitions for review in the case, Wyeth v. Conte, allows the San Francisco court’s absurd interpretation of tort liability–that a company which initially develops a product can be held liable for an unrelated individual’s misuse of another company’s independently created and marketed version of that product–to become new precedent,” Emanuel said.