We observed arguments last week in the California Supreme Court in Gilead Tenofovir Cases, and quality advocates on both sides put on a great performance.  As we previewed last week, the case presents a question with potentially sweeping consequences for product liability law: Does a pharmaceutical manufacturer owe a duty of reasonable care to users of a non-defective medicine when making decisions about the development of an allegedly safer and equally effective alternative compound?

In other words, when a patient experiences an alleged side effect when using a non-defective medicine, can the patient sue anyway and claim the manufacturer should have developed an allegedly safer alternative faster than it actually did?  In an unprecedented ruling, the California Court of Appeal recognized this novel claim. 

The plaintiffs in these cases allege injuries from taking TDF-based HIV antiretroviral medications, but they concede that their TDF meds are not defective.  They allege instead that the manufacturer unreasonably delayed developing an alternative that plaintiffs allege was safer—TAF-based medications.   

As expected, the advocacy on both sides was top notch.  For the pharmaceutical manufacturer, counsel followed three themes.  First, the manufacturer’s development of TDF-based drugs saved thousands of lives, and the Court of Appeal’s new duty purporting to regulate pharmaceutical development would impose an unacceptable social cost for multiple reasons.  Second, the existence of an allegedly safer alternative certainly could be relevant to whether TDF medicines were defective—but not to create new tort duty.  Third, the Court of Appeal’s new duty is unnecessary.  Manufacturers do not delay the commercialization of good products, and the existing duty under California law to produce reasonably safe, non-defective products already protects consumers. 

So off they went.  Counsel noted at the outset that when suing for a personal injury allegedly caused by a product, the plaintiff needs to prove a product defect.  This is a sound argument based on decades of California law, and it is enough here to win.

Counsel, however, immediately pivoted to explain why the Supreme Court should reject the Court of Appeal’s new duty, and it was a compelling introduction.  To start, no other court has ever recognized such a duty, and doing so would be costly to public health.  Indeed, this is the only duty in history where the development of an allegedly safer product resulted in a new duty of care.  Moreover, imposing this duty to innovate will redirect scarce resources from beneficial development in existing products to alternative development pathways.  That is particularly poignant here because the pharmaceutical manufacturer invested in developing a single, combined TDF-based medicine at the FDA’s urging, resulting in a combination medicine that saved lives.  Under the Court of Appeal’s new duty, the manufacturer had a legal duty to spend its scarce development resources on something else.  The Court of Appeal’s new duty also creates a new plaintiff class for the path not taken, and it places manufacturers in a position where learning a little bit about the safety of a back-up molecule will now require pushing further, thus slowing the development of an existing better medicine.  This is not a good outcome. 

Importantly, counsel acknowledged that it would be relevant if a plaintiff could show that a manufacturer delayed the release of an alternative product with full knowledge of potential harm and for the sole purpose of profit.  Even though no one has explained why a manufacturer would ever do that, there might well be a duty there because those circumstances could show a safer feasible alternative—and that is a factor in determining whether a product is defective. 

This is a key point.  Hyperbolic allegations of intentional wrongdoing and hypothetical evidence of companies rejecting “safer” alternatives because they are “too expensive” grab the attention.  But the concept of a safer alternative design is already embedded in the existing duty.  In other words, allegations of a safer alternative can be relevant to defect, but not a new tort. 

Yes, there is a general duty to avoid unreasonably doing harm to others, but juries should not weigh social costs twenty years after the fact, and the Court should not create duties unless there is evidence of a problem requiring a solution.  Product manufacturers do not delay the commercialization of good products, and patients are already protected by the duty to make reasonably safe, non-defective products.  They are also protected by the FDA.  In the end, the Court of Appeal’s new duty imposes an unacceptable social cost will stifle innovation. 

Plaintiffs’ counsel countered with plaintiffs’ own three themes.  First, this is not new—it is “bedrock” principle that everyone is responsible for the failure to exercise reasonable care.  Second, this case is not about a product defect; it is about the manufacturer’s unreasonable conduct in delaying development of an allegedly safer product for the sake of profit, resulting in harm to TDF patients.  Third, public policy does not justify creating an exemption for pharmaceutical manufacturers.

In our biased view, it was startling that plaintiffs’ counsel referred to harm to “thousands” without once acknowledging that TDF-based drugs have indisputably saved thousands of lives, including probably many of the plaintiffs.  When asked directly, “What is the duty,” counsel echoed the Court of Appeal’s tortured attempt to limit the duty to the allegations of these cases:  The duty arises when a manufacturer is currently selling a drug, which is not defective, but the manufacturer has decided to delay commercialization of an alternative that it knows to be safer and more effective.  The alleged breach is the decision to “press pause.” 

Here more than one justice tried to steer plaintiffs back into traditional tort duties and the law of product defect.  In other words, if the plaintiffs’ allegations are that the manufacturer is selling a product that made them sick, why not just plead it that way?  And why is the manufacturer’s knowledge of a safer alternative not relevant to a defect in TDF-based medicines?  Counsel resisted taking this offramp (which she also did in the Court of Appeal) and repeated that the duty is based on the manufacturer’s decision to delay development of TAF under its own timeline. 

Which provoked another round of questioning on what the duty is and when it arises.  One justice noted that a patient on TDF-based medicine might suffer from kidney injury, but without the medicine, the patient might not have lived long enough to experience that alleged complication.  Moreover, product development “does not happen overnight or for free.”    

The panel continued to question the details.  When asked whether a duty could arise based on the study of 30 patients, with no Phase III clinical trial, counsel replied (again) that the breach is the failure to act reasonably.  When asked about whether the company should have proceeded to later-phase clinical trials and whether it mattered that the manufacturer has limited resources, counsel replied that the jury can decide. 

One justice noted that counsel kept coming back to reasonableness and wondered whether this is a problem for the legislature.  The law does not prevent profit from innovation, and it is uncomfortable to allow a court or jury to determine whether a company should lose profit because it innovated more and innovated better.  Counsel replied that the opposite is uncomfortable too—giving a company special treatment, when pharmaceutical companies already make lots of money.  The duty of reasonable care does not impact innovation.  

Counsel for the manufacturer made several points in rebuttal, but the most powerful was that plaintiffs’ expansive duty to “be reasonable” is not workable.  The struggle to articulate precisely what this duty is demonstrates why we have the requirement to prove a product defect.  In the end, this appeal is about life-and-death decisions and developing drugs that save lives.  The Supreme Court should embrace the duty to make a non-defective product, not an expansion of tort law that is unnecessary and unwarranted. 

We will not hazard a guess at the likely outcome.  One justice was clearly on the plaintiff’s side.  Another showed a willingness to engage the issues outside the framework of tort law.  Multiple justices tested what the duty should be and when it ought to arise, whether within the framework of existing tort law or not.  We know where we stand:  The Court of Appeal’s new duty is gratuitous.  If these plaintiffs have experienced alleged complications from their treatment, they have a remedy—so long as they can prove a product defect.  The opinion should come out within 90 days.