## Facts

- Novartis manufactured and marketed the brand-name drug Brethine (terbutaline), approved for asthma but widely used off-label to suppress premature labor.
- Novartis held the new drug application and controlled Brethine’s labeling until transferring the rights in December 2001.
- In 2007, J.H. was treated for preterm labor and prescribed generic terbutaline, not Brethine, for an off-label use.
- The twins later developed serious neurological impairments; plaintiffs alleged terbutaline exposure in utero caused fetal brain injury.
- Plaintiffs alleged studies available before 2001 questioned efficacy and identified fetal brain risks, and that Novartis failed to provide adequate, accurate warnings and made misleading safety representations.
- Because federal law requires generic labels to match the brand-name label, the generic product allegedly carried the same warning language derived from the brand labeling.

## Issues

1. Whether a brand-name drug manufacturer owes a duty of ordinary care in labeling and safety warnings to patients injured by a generic bioequivalent that uses the same label.
2. Whether a brand-name manufacturer’s sale of a drug’s rights terminates liability for injuries allegedly caused by deficiencies in the warning label that existed before the sale.
3. Whether plaintiffs alleging negligence and negligent misrepresentation based on brand labeling defects may proceed past demurrer when the brand manufacturer neither made nor sold the dispensed generic drug.

## Decision

- The California Supreme Court affirmed the Court of Appeal’s judgment.
- The Court held that brand-name manufacturers owe a duty to use ordinary care in warning about safety risks, even when the injured plaintiff used a generic equivalent.
- The Court held that sale of the drug rights does not, as a matter of law, terminate potential liability for injuries foreseeably and proximately caused by warning-label deficiencies that existed before the sale.
- The Court agreed the existing pleading was not necessarily sufficient, but plaintiffs could potentially state claims; the demurrer was to be sustained with leave to amend on negligence and negligent misrepresentation.

## Legal Principles

- Under California negligence principles, a drug manufacturer must use ordinary care to warn of known or reasonably knowable risks associated with its drug and its labeling.
- A duty may extend beyond direct purchasers or users of the manufacturer’s own product when harm is a foreseeable result of the manufacturer’s conduct and the connection to the injury is sufficiently close.
- Where federal law requires generic drug labels to be identical to the brand label, it is foreseeable that deficiencies in the brand-originated label can mislead prescribing physicians about risks of the generic equivalent.
- A manufacturer’s divestiture of a product line does not categorically bar liability for pre-divestiture negligent labeling that foreseeably continues to affect medical decisionmaking through the unchanged label used by generics.
- Recognizing a duty does not impose strict insurer liability; liability still requires breach, causation (including proximate cause), and legally cognizable damages, and FDA regulation provides constraints on labeling content.

## Conclusion

California law permits plaintiffs injured by a generic drug to pursue negligence and negligent misrepresentation theories against the former brand-name manufacturer based on alleged deficiencies in the brand-originated warning label, and a prior sale of the drug rights does not automatically cut off liability for injuries allegedly caused by pre-sale labeling defects.


T.H. v. Novartis Pharms. Corp., 4 Cal. 5th 145 (Cal. 2017)