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I am a freelance reporter who has written for numerous publications on legal issues and business trends. Valparaiso grad.
Post written by
I am a freelance reporter who has written for numerous publications on legal issues and business trends. Valparaiso grad.
This spring, a Chicago federal jury awarded $3 million to the widow of a lawyer who committed suicide by stepping in front of a CTA L train in Chicago’s Loop in 2010 shortly after taking a generic version of the antidepressant drug Paxil.
While the award fell far short of the $39 million requested by plaintiff Wendy Dolin’s legal team, the verdict against Paxil-maker GlaxoSmithKline still drew the attention of drugmakers and other “innovators” of new consumer products, as the award came despite what GSK argued was a well-established legal principle:
That a manufacturer or “innovator” should not be held liable for damage or injuries inflicted by a product they have not made.
Plaintiffs’ lawyers argue the case is not about that at all, but rather “old fashioned negligence” under GSK’s responsibility for alleged deficiencies in the warning label written by GSK, which accompanies both Paxil and its generic equivalent made by others.
But what comes next in the case – should GSK win a new trial, as it has requested, or the outcome of a promised appeal – could have big implications for the legal concept known as “innovator liability.”
The case has been – and will continue to be – watched closely by the pharmaceutical industry, trade associations and various other concerned groups. Many believe the current verdict could spell disaster for innovators even beyond pharmaceuticals; others feel the outlier verdict will remain just that – a nearly solitary judgment that won’t find a footing in subsequent rulings.
Attorney Michelle Hart Yeary, counsel for Dechert LLP in Princeton, N.J., who specializes in product liability litigation, said she is among those believing the Dolin verdict will have a short shelf life, for several reasons.
For starters, she said, the court should have applied state law to the case, according to the 1938 Erie Doctrine.
Instead, “they overstepped their bounds beyond the Erie Doctrine to create new law for Illinois,” Yeary said.
“If there’s no Supreme Court from that state ruling on that decision, they have to look at what competing appellate courts have done and piece it together,” she said. “The one thing they are not supposed to do is … create new forms of state liability … . If there’s nothing in state law that says we recognize this, it’s not the role of the federal court to expand it … they’re circumscribed by what the law is.”
When you look at what the majority of other Illinois courts have said on the issue, the Dolin verdict seems out of the blue, she said.
Second, the U.S. Court of Appeals for the Sixth Circuit wrote in a separate opinion that the Dolin verdict was wrong.
“When you combine [the GSK decision] with being an outlier in the country, you combine it with being a decision interpreting Illinois law but not by a court that technically would be making Illinois law – they shouldn’t have done that – and then you have the Sixth Circuit saying, ‘We don’t think they got it right,’ GSK’s appeal seems right on as far as I’m concerned,” Yeary said.
A lonely theory?
The history of innovator liability is not particularly colorful.
California and Vermont are the only states where plaintiffs have found success in innovator liability suits, said Tiger Joyce, president of the American Tort Reform Association.
At least, that was the case until April 20, when the jury found for Dolin, the widow of Chicago attorney Stewart Dolin, against GSK, a United Kingdom-based pharmaceutical giant whose U.S. headquarters are in Philadelphia. Six days before his death, Stewart Dolin had been prescribed GSK’s Paxil for work-related anxiety and depression; his prescription ultimately was filled with generic paroxetine, manufactured by Mylan Pharmaceuticals Inc.
Wendy Dolin asserted her husband’s behavior was caused by the paroxetine, and she further asserted GSK failed to adequately warn on Paxil’s label – which, under FDA regulation, also was placed on the generic paroxetine – that the drug had an increased risk of suicide in adults.
“GSK was responsible for the [warning] label,” said Dolin’s lead attorney Brent Wisner of Baum, Hedlund, Aristei and Goldman P.C. in Los Angeles. “If that label caused Mr. Dolin’s death, that is old-fashioned negligence…”
“GSK was not held liable for Paxil, but statements about Paxil,” he continued. “A brand-name drug maker creates a label and knows other generic drug makers are going to copy that label. That’s federal law. That’s reasonably foreseeable.
“In our trial transcripts, we had our experts up there. They said the label is what killed Stewart Dolin, not just the drug. Wendy Dolin’s position is not to have Paxil taken off the market; the whole point is, if you’re going to sell Paxil, just tell people that it could cause adults over 24 to kill themselves.”
In 2014, the Alabama Supreme Court recognized innovator liability in Wyeth Inc. v. Weeks, but a year later, the Alabama legislature rejected the court’s decision.
In fact, there have been more than 100 court decisions, including U.S. Courts of Appeals for six different circuits, that have rejected innovator liability, based on the “Beck and Hermann Scorecard: Innovator Liability and Drug Cases,” by Drug and Device Law publications, which was updated in the middle of last year, said Joyce.
So, to say [GSK’s verdict] is an outlier is an understatement,” he said. “The company that does not make a product is generally not sued. That’s the working theory for our general justice system.”
That’s why, last year, when a California court found brand-name pharmaceutical company Novartis responsible for failing to warn of possible dangers of a generic version of its asthma medication, Brethine – which it had stopped producing years before the damage occurred – ATRA filed an amicus brief to voice its concern, penning “innovator liability violates the basic tenet of American tort law.”
PhRMA, a nonprofit association whose members include leading pharmaceutical research and technology companies, also filed an amicus brief in the Novartis case.
“This need not be confined to the pharmaceutical industry,” Joyce said. “This is a theory that, if it took root in pharmaceutical companies … it will be followed suit. It will migrate into other areas if courts get behind this. That’s why we filed an amicus brief in California.”
Wisner, meanwhile, said the very term “innovator liability” produces an unfair connotation that innovators are good people who are being unfairly shackled with liability. He prefers the term “brand name immunity” to describe the legal battle fought in Dolin.
“We don’t consider it innovator liability,” Wisner said. “What GSK said is, ‘We have immunity from traditional negligence torts.’ We not only think that’s a bit presumptuous, it’s flat out incorrect under Illinois law.”
The impact of Dolin
Other than the Novartis case, only one other California case has withstood an innovator liability verdict.
In 2008, a California court found in Conte v. Wyeth that a brand-name manufacturer could be held liable for a generic equivalent of its product, even if it didn’t sell the alleged injurious generic product.
But since then, the overwhelming majority of cases have not sided with the innovator liability/Conte theory, said Yeary.
“In nine years, it has not managed to earn a foothold, and this [Dolin] decision has no good legal foundation on which to cause that tide to turn,” she said.
Yeary futher believes that the Dolin case won’t bring about a flurry of similar innovator liability suits because there isn’t enough meat on the bones for plaintiffs to gnaw on.
“There wasn’t anything to the decision itself that made somebody go, ‘Someone’s thinking of this differently … or someone has twisted it into something that we have to now worry about it,’” she said. “I just don’t see how it stands. My hope [is that] it gets overturned and goes by the wayside.”
“I certainly can’t predict what the Seventh Circuit (in Chicago) will do,” she continued. “I can only look at how every other Illinois court has come out and how the Sixth Circuit, in interpreting Illinois law, has come out and said, when everybody’s going to the left and one goes to the right, it just doesn’t have the same level of support. It doesn’t have impetus, to me, to grow into anything.”
Like Yeary, Andrew Bayman, an attorney with the firm of King & Spalding in Atlanta who served as lead trial counsel for GSK, said he doesn’t believe the Dolin case will “open the flood gates” to similar cases.
However, contrary to Yeary, he does believe the verdict will create economic disincentives for companies to create new medicines.
“I think the bigger concern is whether this will chill innovation and discourage companies from developing products when they could ultimately be liable for somebody else’s product,” he said.
“This is a drug we didn’t make, we didn’t sell – in fact, we lost money because it affected the sales of our product … and yet we’re found liable. That will chill innovation.”
Another consideration for drug companies could be the longevity of their liability. If a drug goes off patent, the generic version still could stay on the market for years, meaning a company could be liable years after they’ve washed their hands of a particular product, Bayman said.
“That’s the bigger danger,” he said.
PhRMA has similar concerns. Though it filed an amicus brief for the Novartis case, not Dolin, the organization’s position on the issue of innovator liability theory remains the same, said Melissa Kimmel, vice president of litigation and antitrust for PhRMA.
“Faced with uncertain and unlimited liability tethered neither to their own products nor to their financial returns, brand-name companies who face potential liability for alleged injuries sustained while using generic copies of their products years after leaving the market may be forced to cabin that liability in at least two ways that will frustrate the aims of the federal regulatory scheme governing pharmaceuticals and harm public health,” PhRMA’s brief stated.
First, PhRMA argued, if companies that create products are subject to liability not related to their own products or revenues, those companies won’t be able to recapture investments, and the resources that could be used in future innovation will shrink.
Second, innovation liability creates a “remarkable risk profile for brand-name companies,” which thereby “encourages companies to prophylactically warn of every conceivable risk, which in turn could erode the meaningfulness of scientifically-justified warnings and deter beneficial uses of medications,” the brief stated.
Wisner, however, scoffed at such argument, calling it “utter nonsense.”
California, he argued, has the biggest drug market in the country, and it has allowed brand-name liability for nearly 15 years – yet there is no disincentive in that state to make new drugs.
And even if you buy into the argument that drug companies can be held liable for generics long after those companies have left a particular drug market, Wisner said GSK has provided the solution to that problem.
“[That argument] is particularly disingenuous here because GSK sold its ownership of Paxil – they washed their hands of the drug completely,” he said.
While it’s true GSK could be held liable for any incidents related to Paxil that occurred while the company still controlled Paxil before January 2014, after that date, the generic manufacturer Apotex gained control of the drug, and thus any liability for it.
Plus, when compared to the amount of money that drug companies pay for personal injury lawsuits, it comes to less than 1 percent of the profit they receive from manufacturing those same drugs, Wisner said.
“If they make $30 billion in profit, and spend $200 million [on personal injury lawsuits], that’s still a really good deal,” he said. “But that is not enough; they want to make as much money as possible.”
Instead, Wisner believes the implications of the Dolin case will be positive on a global scale, as drug companies likely will be more forthcoming with the FDA to ensure more consumer protection, including paying closer attention to their labeling so that products will be more acutely understood by patients.
“At the end of the day, the person who is putting that pill in their mouth or putting that pill into their child’s mouth, knows what to look for and what the risks are,” Wisner said. “The drug very well may help them, but they have to know what could hurt them – or hurt their child – as well.”
Joyce has a slightly different thought on the implication of the GSK case.
“For the most part, the efforts to push back, combat and overturn [innovator liability cases] have been successful – with the exception in California,” he said. “With so many different circuit courts of appeal on record on this … we think it really should be overturned on appeal … which would mean that from our standpoint, [this issue] is really confined to California. So, I look at it as, what’s wrong with California?”
In fact, the anomaly on the West Coast could spark a migration of all similar cases to California courts, Joyce said.
Joyce conceded that there is complexity to innovator liability, and the interplay between generic and branded products can vary somewhat. Add in sympathetic plaintiffs, and it’s a bit easier to understand how a few of these cases have found merit.
“But the question is: What should be the rules of our civil system with respect to allocating responsibility and, ultimately, damages?” Joyce asked.