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
- 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.
- 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.
- 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.