In a judgment rendered on May 8, 2019, the Quebec Court of Appeal upheld a Superior Court decision dismissing a class action in which the plaintiffs alleged that a manufacturer failed to provide sufficient information as to the risks of a prescription drug. This was the first time that the Court of Appeal considered the merits of a class action regarding a drug manufacturer’s duty to warn.
This action was based on the manufacturer’s liability for safety defects under section 1468, 1469 and 1473 of the Civil Code of Québec ("C.C.Q.") and the manufacturer’s liability for safety defects under section 53 of the Consumer Protection Act ("C.P.A.").
In its judgment, the Court of Appeal set out a number of important rules of general application:
- The sale of prescription drugs by a pharmacist is not a consumer contract and therefore falls outside the scope of the C.P.A.
- The doctrine of the learned intermediary applies with respect to the sale of prescription drugs. The manufacturer can therefore fulfill its duty to warn by adequately informing health care professionals.
- While not determinative, compliance with regulatory standards tends to indicate that the manufacturer has fulfilled its obligation to provide the required information.
In addition, the Court clarified the intensity of a drug manufacturer's obligation to inform of side effects observed in conjunction with the intake of a drug when there is no evidence that the drug itself can cause these effects.
Summary of the Facts:
Biaxin is an antibiotic which has been prescribed for more than 20 years to treat certain bacterial respiratory infections (for example pneumonia, bronchitis or pharyngitis) or cutaneous infections. This antibiotic is only available on prescription from a licensed physician. At all relevant times, various forms of neuropsychiatric side effects were disclosed in the “side effects” section of the Product Monograph (which has been updated on several occasions as possible side effects were reported during the post marketing surveillance of the drug).
At trial, some class members testified that they suffered from neuropsychiatric-related disorders concurrently while taking Biaxin. The plaintiffs alleged that these neuropsychiatric disorders had been caused by the drug. They argued that these risks should have been disclosed in the warning and precaution section of the Biaxin Product Monograph.
Court of Appeal Decision:
- The Sale of Prescription Drugs by a Pharmacist Falls Outside the Scope of the C.P.A.
The Court of Appeal concluded that the sale of prescription drugs does not fall within the scope of the C.P.A. The act applies only to contracts between a consumer and a merchant in the course of its business. The Court noted that a pharmacist may, depending on the circumstances, engage in both professional or commercial activities. The sale of prescription drugs, however, necessarily involves the professional judgment of a physician or pharmacist when he or she advises the patient on the appropriate use of the drug. In this context, health professionals do not act as merchants within the meaning of the C.P.A.
Further, the Court of Appeal found that the application of the C.P.A. would be inconsistent with the realities of drug development and marketing.Indeed, unlike the rules applicable under the C.C.Q., the C.P.A. does not contain an exemption of liability based on the state of knowledge at the time when the drug was made available on the market. Knowledge of the risks of a medication is acquired through its usage in a large population and based on the evolution of scientific and medical knowledge. The Court held that an exemption is needed to allow for the proper development and innovation in this industry.
Accordingly, the Court of Appeal found that the legislature could not have intended to apply the C.P.A. regime to this industry.
- The Duty to Inform Users About the Risks of a Prescription Drug
A manufacturer must inform its users of the risks and dangers of its product and the means to avoid them. In order to establish a manufacturer’s liability, the plaintiff will have to show: (1) that the product has a safety defect; (2) that the plaintiff suffered damage; and (3) that there is a causal link between the defect and the damage suffered.
To demonstrate causation, the plaintiff will have to prove the materialization of the risk of a particular side effect of the drug.However, even without the evidence that the drug can cause the particular side effect, the mere fact that a serious side effect occurred concurrently with the intake of the drug may establish the existence of a possible risk which must be disclosed by the manufacturer.
As stated above, the manufacturer will not be found liable if the causal relationship between the risk and the drug could not be known based on the state of knowledge at the time the drug was made available on the market. According to the Court of Appeal, this exemption aims to share the risks associated with technological and medical innovation between manufacturers and users.
- The Learned Intermediary Rule
As a general rule, to fulfill its duty to warn, the manufacturer must directly inform the users. However, the Court recognized that the doctrine of the learned intermediary finds application in Quebec civil law in the context of the sale of prescription drugs. Thus, the manufacturer fulfills its obligation if it properly warns the competent intermediary such as the doctor and the pharmacist involved in prescribing and distributing the drug to the users.
- The Impact of Regulatory Compliance on a Manufacturer’s Liability
Drug manufacturers are highly regulated and the development and approval of a new drug is overseen by Health Canada. These rules also include a duty to continuously update the information disclosed to health professionals and users through the Product Monograph. They also specify the type of information that must be disclosed in the different categories and sub-categories of the Monograph.
In light of this context, the Court of Appeal stated that, while not determinative, compliance with such regulatory standards tends to indicate that the manufacturer has fulfilled its obligation to provide adequate information. Thus, it is an important factor to consider when assessing the diligence of a pharmaceutical manufacturer regarding its duty to inform.
- Conclusions of the Court of Appeal in this Case
Like the trial judge, the Court of Appeal concluded that the evidence did not demonstrate that Biaxin had the ability to cause neuropsychiatric side effects (general causation).
Even if they are statistically very rare, the neuropsychiatric side effects reported in conjunction with the intake of Biaxin did trigger the manufacturer's disclosure obligation. However, the intensity of this obligation can be qualified as intermediary since no evidence shows that these rare serious side effects are caused by Biaxin.
The Court of Appeal found that the manufacturer fulfilled its duty to warn by disclosing the possible neuropsychiatric side effects in the adverse effects section of the monograph. Under the state of the knowledge such disclosure constituted a sufficient warning about the possible risks.The manufacturer disclosed the information it possessed, considering the state of knowledge with respect to the medication.Thus, the monograph provided sufficient information to healthcare professionals about the benefits and risks of Biaxin. In turn, these professionals had to inform their patients in accordance with their specific conditions and based on their professional judgment. Finally, the information sheet which is generally provided along with Biaxin clearly explains how to access the information about less frequent side effects of the product.
Many product liability class actions have been filed in Canada in the past twenty years against manufacturers of prescription drugs. While many such actions are currently pending before Canadian courts, this case is the first and only one so far in which a common issues trial was held and judgement on the merits of the case has been issued following the trial. The decision of the Court of Appeal in the Biaxin case could have a profound impact on future cases. One of the consequences of the Court’s decision is that the punitive damages under the C.P.A. are not available to plaintiffs in product liability cases related to prescription drugs and collective recovery is less likely to be appropriate.