DRUG MANUFACTURERS BEWARE! The rules governing the liability exposure of brand name drug manufacturers are changing, at least in California. Whether the rule announced in Conte v. Wyeth, Inc.,1 is an anomaly or will become the majority rule is a question which should be considered by all innovator drug companies, their law departments, and their outside counsel. Before Conte, the universal rule was that generic drug users could not sue brand name drug manufacturers. The California Court of Appeals adopted a contrary rule in Conte v. Wyeth, Inc. Thus far, no court outside California has adopted Conte, but it is far too early for innovator drug manufacturers to declare victory. California courts are innovative and influential. If brand name drug manufacturers want the Conte rule to be isolated to a few courtrooms in California, they need to take immediate steps to properly exert their considerable influence to achieve that goal.
Brand name or innovator drug manufacturers are just that. They have massive research and development departments to develop new drugs to help solve more and more medical problems. Once a new drug shows sufficient promise, these manufacturers undertake a time-consuming, challenging, and costly regulatory process. That process includes preparing and submitting for approval appropriate labeling package inserts and warnings. The brand name manufacturer also prepares its proposed monograph entry for use in the Physician's Desk Reference (PDR).
Manufacturers of generic drugs obtain approval for their products in a much more streamlined fashion. As a general rule, they copy verbatim the drug labeling information of the brand name drug. In practice, physicians become familiar with the brand name drug because it precedes any generic equivalent and because of the marketing efforts of the brand name manufacturer. Once a generic equivalent becomes available, it is often preferred by patients and health insurers because of the cost savings. Thus, it is frequently substituted by the pharmacist filling the prescription, if not prescribed by the physician directly. In fact, unless a physician affirmatively indicates that a prescription is to be dispensed as written, in most states a pharmacist may substitute the lower priced generic equivalent for the brand name drug actually prescribed. When it comes to lawsuits involving these generic products, plaintiffs often contend that brand name manufacturers can also be held liable under a theory of negligent misrepresentation because of insufficient warnings read by plaintiffs physician.
Since 1994, the majority rule has been that a brand name manufacturer does not owe a duty to users of the generic equivalent drug, noting that the injury alleged was caused by a different company's product. The leading case supporting the majority rule is Foster v. American Home Products Corporation? Foster remained virtually unquestioned until 2008, when the California Court of Appeals decided Conte v. Wyeth? The court in Conte held that the brand name manufacturer owes a duty of care to generic drug users whose doctors foreseeably relied on the brand name manufacturer's product information.
California has long been recognized as one of the nation's leaders when it comes to judicial and legal innovation. Crisci v. Security Insurance Company and Gruenberg v. Aetna Insurance Company5 are preeminent cases regarding insurance bad faith. Similarly, Greenman v. Yuba Power Products* is a renowned strict product liability case. The question now is whether Conte will become the leading case on brand name manufacturers' liability to users of generic drugs using a negligent misrepresentation theory, or whether it remains an isolated anomaly. Though Foster continues to be the prevailing rule, it should be remembered that most jurisdictions have not decided the issue. Conte has given hope to generic drug users and their attorneys that Conte will supplant Foster. Familiarizing oneself with the issues and arguments found in Conte and Foster is vitally important. …