An Insane Theory of Product Liability
Can a drug company be held liable for damages caused by generic drugs it didn't produce? That's the expansive new theory of "innovator liability" on parade in Alabama, where a recent ruling by the state Supreme Court could do damage throughout the U.S. economy.
In Wyeth Inc. et al., v. Danny Weeks et al., Mr. Weeks says he suffered from side effects from taking the generic version of an acid-reflux drug called Reglan. He sued Wyeth for fraud and misrepresentation, though the company didn't make the drug he took and had exited the Reglan market in 2002, five years before he took it. The court ruled 8-1 that Wyeth could be held liable for injuries because the generic manufacturer couldn't change the warnings on the product it copied.
First, this is nuts -- being held liable for problems with a product you did not make, simply because you invented it years before. Are we going to start suing the estate of Thomas Edison every time someone buys a bad lightbulb?
But second, note how helpless Wyeth is now. Drug makers are used to insane law suits that drain all the profit from helping millions of people to pay off a few folks who had adverse side effects (this same process literally destroyed the vaccination business until the government gave them special liability protection).
But let's accept the court victory - perhaps the drug really has a problem that has been discovered. If the maker was being sued, he could just pull the drug from the market (as has happened any number of times after adverse suits) either forever or until the FDA will approve new warning language.
But in this case, Wyeth can't do this. The generic drug makers will keep on selling the product - after all, they are not getting sued, and Wyeth will keep paying. Wyeth does not even have standing to try to get the FDA to change the warnings on the drug. If Wyeth tries to buy out the generic maker and shut it down, and new seller will simply takes its place. If this case stands, Wyeth can be steadily bled to death and there is nothing they can do to stop it.
Finally, I don't want to get away without a mention of just how broken the FDA drug regulation regime is. The original Supreme Court decision that led to the generic maker being immune to suits really turned on the impossibility of getting the FDA to change even one word on a drug's warning label.
