On May 11, 2018, the West Virginia Supreme Court held that manufacturers of brand-name pharmaceutical products cannot be held liable for injuries allegedly caused by their generic equivalents ("innovator liability").
The decision represents a step forward in the debate over innovator liability law taking place at the state level. Although federal courts have universally rejected innovator liability, the handful of state high courts that have weighed in have been anything but consistent. In 2013, the Alabama Supreme Court stunned the pharmaceutical industry when it became the first state high court to hold that brand manufacturers could be liable under a theory of innovator liability. The court reaffirmed its decision the following year, explaining that the misrepresentation theories are based, "not on manufacturing defects in the product itself, but on information and warning deficiencies . . . drafted by the brand-name manufacturer and merely repeated, as allowed by the FDA, by the generic manufacturer."
The Alabama legislature worked quickly to overturn the Weeks ruling, signing into law a bill that requires plaintiffs to prove that the defendant designed, manufactured, sold, or leased the particular product at issue. And the next state high court to consider the issue squarely rejected innovator liability, relying on the "well-settled requirement of Iowa law" that manufacturers only owe a duty to those harmed by their own products.
In the last year, however, two state high courts have come out the other way, both accepting some form of innovator liability, and raising concern about whether the tide has turned. In California, the Supreme Court held that brand manufacturers owe a duty to users of generic products because it is "eminently foreseeable" that a physician may rely on branded labeling even when prescribing generic products.
Shortly thereafter, the Massachusetts high court held that brand manufacturers can be liable to users of generic products for reckless failure to warn.
McNair, however, stays firm to basic tort principles and soundly rejects the doctrine.
In this case, a West Virginia couple, sued Johnson & Johnson and its subsidiaries, Janssen Pharmaceuticals, Inc. and Ortho-McNeil Pharmaceuticals, Inc., in state court for failure to warn of the risks of Levaquin (generic name levofloxacin), an antibiotic approved to treat certain bacterial infections. Although Janssen Pharmaceuticals held the NDA for branded Levaquin, FDA began approving generic versions in 2011.
Mrs. McNair was diagnosed with pneumonia and prescribed generic levofloxacin in March 2012. She alleges that the drug caused her to develop acute respiratory distress (ARDS).
Janssen removed the case to federal court, and then moved for summary judgment. Janssen argued that because Mrs. McNair had taken the generic version–a product that Janssen did not manufacturer or distribute–it could not be liable under West Virginia law. The district court agreed and dismissed the claim.
On appeal, the Fourth Circuit Court of Appeals certified the question to West Virginia: Does West Virginia law permit a claim of failure to warn and negligent misrepresentation against a branded drug manufacturer when the drug ingested was produced by a generic manufacturer?
Courts addressing this issue do so against a particular regulatory framework. A brand manufacturer is responsible for drafting, updating, and maintaining the warnings in a prescription drug label. Although a brand manufacturer must obtain FDA approval before making updates to the product labeling in most circumstances, a narrow exception permits it to add or strengthen warning information—prior to FDA approval—under certain conditions (i.e., a Changes Being Effected or CBE label change).
A generic manufacturer, in contrast, is required to ensure that its labeling is identical to that of the brand-name drug.
In 2011, the US Supreme Court ruled on this dichotomy between brand-name and generic manufacturers in a failure to warn case brought against a generic manufacturer.
Because generic manufacturers have a duty of "sameness" and cannot independently update product labeling, the Court held federal law preempts state tort law claims against a generic manufacturer that are premised on labeling changes that only a brand manufacturer could make.
In the wake of the Supreme Court’s decision, however, plaintiffs’ attorneys started bringing claims against brand manufacturers for injuries allegedly caused by generic products under various theories of innovator liability, as in McNair.
McNair was not the first court to consider innovator liability under West Virginia law. In a 2014 case involving product liability claims under the laws of twenty-two states, the Sixth Circuit predicted that West Virginia would reject innovator liability.
McNair has now removed all doubt. It held that neither strict products liability nor negligent misrepresentation claims can survive against brand manufacturers when they did not make the product at issue. "Our product liability law is abundantly clear: liability is premised upon the defendant being the manufacturer or seller of the product in question." Thus, while brand manufacturers have a duty to warn about the risks associated with their own products, they have no duty to warn the users of generic versions.
Plaintiffs made two arguments to try to persuade the court otherwise. First, they argued that the label is the product at issue, and that the brand manufacturer owns the label regardless of whether it is placed with a brand or generic version of the product. The Court rejected this, holding that the drug is the product and the label is relevant only to the extent it makes the product defective.
Second, Plaintiffs argued that the case should be analyzed under foreseeability principles: because both generic use and the injury were foreseeable, the brand manufacturer’s duty logically flowed to generic use of the same essential medication. Indeed, it was this exact reasoning that led the California Supreme Court to embrace some forms of innovator liability in T.H. v. Novartis.
The McNair court saw the logical fallacy in that argument, as the Sixth Circuit had before:
"[T]he generic consumers’ injuries are not the foreseeable result of the brand manufacturers’ conduct, but of the laws over which the brand manufacturers have no control. Congress made the public policy decisions to lower barriers of entry for generic drugs . . . . Using these laws as the basis of supplying the duty element for tort liability stretches foreseeability too far."
Further, the court recognized that unlimited innovator liability would "sever the connection between risk and reward," and could increase the price of new drugs and stifle innovation, both to the ultimate detriment of the consumer.
The court was not wholly unsympathetic to Plaintiffs’ argument that users of generic products might be left without recourse. But a "brand-name manufacturer does not choose for its warning label to accompany the drugs marketed by its competitors. Instead, federal law mandates such a result . . . ."
Accordingly, the "proper remedy for consumers harmed by generic drugs rests with Congress or the FDA," and not a distortion of established product liability law.
The West Virginia court’s decision is a welcome reality check on expansions of elementary tort law principles.