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Bexis has been updating the preemption chapter of his treatise on drug/device product liability litigation.  He came across several preemption decisions involving defendants who employed the FDA’s “alternative summary reporting” (“ASR”) system that the agency operated for about 20 years, “from 1997 through June 2019.”  FDA, “Medical Device Reporting (MDR): How to Report Medical Device Problems,” at MDR Data Files, Alternative Summary Reports (available here).  Bexis came across preemption cases mentioning ASR reporting with respect to surgical staplers, Bell v. Covidien LP, 2023 WL 3006175, at *2 (D. Mass. April 19, 2023), breast implants, e.g., Gravitt v. Mentor Worldwide, LLC, ___ F. Supp.3d ___, 2022 WL 17668486, at *3 (N.D. Ill. Dec. 14, 2022); D’Addario v. Johnson & Johnson, 2021 WL 1214896, at *3 (D.N.J. March 31, 2021), and contraceptive devices.  McLaughlin v. Bayer Essure Inc., 2019 WL 3764658, at *1 (E.D. Pa. May 9, 2019).  It appears that plaintiffs are attempting to turn various defendants’ use of this FDA-created and authorized program into a tort (variously described as warning defect or a variant of a misrepresentation claim).

Continue Reading Thinking About the FDA’s Alternative Summary Reporting Program
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We often marvel at how plaintiffs’ attorneys find new ways to sue businesses, including under RICO.  Take for example the ever-increasing number of “MSP” plaintiffs that we are seeing in the published opinions.  We see plaintiffs called MSP Recovery, MSPA Claims, MSP Series, MSP-MAO, etc., and we are told that many or all of them are affiliated with the same law firm.  Regardless, they all grow out of the Medicare Secondary Payer Act (hence “MSP” in their names).  Before the Medicare Secondary Payer Act was passed in 1980, Medicare often paid first and allowed private insurers to cover the balance, which inflated Medicare’s costs.  The Act reversed that and placed Medicare in the “secondary” payer position.  The Act also created a private right of action for private parties to pursue reimbursement from primary payers.  Medicare would get its cut, but the private plaintiffs could seek a double recovery and keep whatever was left over.

What does all this have to do with RICO?  Well, the Act’s private right of action incentivized plaintiffs’ attorneys to gather claims from payers under the Medicare Advantage program, and then pursue reimbursement.  They focused initially on the Medicare Secondary Payer Act’s private right of action.  They are, however, branching out—including to RICO and other statutory claims—with mixed success.  See for example our posts here, here, and here

A recent example of MSP entities branching out—and striking out—is MSP Recovery Claims, Series LLC v. Actelion Pharms. US, Inc., No. 22-cv-07604, 2023 WL 5725517 (N.D. Cal. Sept. 5, 2023).  The plaintiffs purported to sue on behalf of third-party payers who made payments allegedly as the result of a purported kickback program.  The plaintiffs also purported to hold valid assignments of claims from the third-party payers.  But these were not private actions under the Medicare Secondary Payer Act.  Instead, the plaintiffs asserted claims under RICO and the consumer statutes of multiple states.  Id. at *2-*12.  We suspect that these plaintiffs have already pursued Medicare Secondary Payer Act claims and are now just cycling through their assignments to try to squeeze out more juice. 

The district judge ruled that the plaintiffs did not plead valid assignments of claims, and there were two reasons.  First, some or all of the plaintiffs’ claims were not assignable.  Apparently claims under the Medicare Secondary Payer Act are assignable, or else we would not have the “MSP” litigation industry.  But RICO claims?  State consumer claims?  The district court was not persuaded.  For some, the answer is a hard no:  Claims under California’s notorious Unfair Competition Law are not assignable.  Moreover, the plaintiffs’ attempts to show assignability of other states’ laws were either “suspect” or non-existent.  Id. at *17-*18. 

On RICO, the district judge noted that every court to consider the issue has ruled that RICO claims are assignable.  But it remains an open question in the Ninth Circuit.  In Silvers v. Sony Pictures Entertainment, Inc., 402 F.3d 881 (9th Cir. 2005), the Ninth Circuit held that certain copyright claims were not assignable because the statute creating the right to sue limited the claim to the person who owned the copyright when the alleged infringement occurred.  Id. at *14-*16.  The defendant in MSP Recovery argued that RICO similarly created a private right of action and similarly limited the claim to persons “injured in [their] business or property by reason of a statutory violation.”  It follows that RICO claims should similarly be unassignable.  Id. at *16-*17 (citing 18 U.S.C. § 1964(c)). 

The district court found “some force” in that argument, but eventually decided that the plaintiffs’ pleadings were deficient for other reasons (see below).  The court admonished the parties that “if a new motion to dismiss is filed, the parties should more thoroughly address the assignability of RICO claims.”  Id. at 17. 

Second, even assuming that the plaintiffs were bringing assignable claims, they did not sufficiently plead them.  A party invoking federal jurisdiction bears the burden of establishing standing.  Although an assignee generally has standing to assert the injury in fact suffered by the assignor, “the Court must guard the standing requirement carefully in the assignment context.”  Id. at *21.  As a result, “Plaintiffs must plead facts . . . support a plausible inference (1) the ultimate assignors suffered an injury in fact, and (2) the assignors’ claim arising from the injury was validly assigned to Plaintiffs.”  Id. at *22. 

These plaintiffs came up short.  Most glaringly, the plaintiffs purported to bring claims on behalf of unpled “assignors” based on “representative assignments.”  We are not sure what a “representative assignment” is, but it seems to be an assertion of someone else’s right, without identifying what the right is or to whom it belongs.  That is not allowed:

Standing is not dispensed in gross; instead, a plaintiff must demonstrate standing for each claim he seeks to press and for each form of relief that is sought.  Here, Plaintiffs seek standing in gross for unnamed assignors.  That is insufficient.  If Plaintiffs seek to pursue claims based on valid assignments, Plaintiffs must plead which assignors’ claims they seek to vindicate.

Id. (citations omitted).  The plaintiffs attached “representative” assignment agreements to their complaint and provided “claims data.”  But those merely confused matters more:  The agreements were heavily redacted, and the data largely undermined the plaintiffs’ claims.  Id. at *23-*28.  “At a minimum, Plaintiffs must plead some specific facts alleging a specific named assignor assigned its claims to Plaintiffs via a valid assignment agreement.”  Id. at *23. 

In the end, the district court dismiss the non-assignable California UCL claims without leave to amend and everything else with leave.  So the plaintiffs struck out this time around, but they will get another at bat.  We can say, though, that the assignability of RICO claims in the Ninth Circuit is not necessarily a foregone conclusion.  The same is true for several states’ laws. 

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Sometimes there are decisions that we begin to read with an expectation—perhaps based on a thumbnail from Bexis—that we will have a strong impression.  Not surprisingly, the expected impression is usually negative.  This was the case with Apter v. HHS, No. 22-40802, 2023 U.S. App. LEXIS 23401 (5th Cir. Sept. 1, 2023), which concerned an APA-based challenge to FDA public statements on the use of ivermectin to treat or prevent COVID-19 in humans.  Over the last three years or so, we have written plenty on ivermectin, hydroxychloroquine, and government measures to combat the COVID-19 pandemic.  For much longer, we have written more than plenty on issues relating to FDA’s authority, such as preemption, limits on FDA’s enforcement authority, and APA challenges to its actions.  One particularly long-standing and road-winding issue has been FDA’s authority to discourage, prevent, and discourage the promotion of off-label use of FDA-regulated medical products.  Based on that history, just hearing that the Fifth Circuit reversed the dismissal of claims against FDA by three Texas physicians who favored the off-label use of ivermectin to treat or prevent COVID-19 in humans made us think the decision must be flawed.  Based on the opinion itself, the flaws in reasoning are not so egregious.  Without diving into the appellate record, let alone trying to determine what the appellees could have done differently, we can only say so much, but there is still something fundamentally off about the result.

Jumping ahead a bit, the core of the Apter decision is the panel’s conclusion that FDA lacks express authority to discourage off-label use.  Phrased too broadly, “FDA is not a physician. It has authority to inform, announce, and apprise—but not to endorse, denounce, or advise.”  Id. at *29-30.  We agree with that to a degree.  As we have pointed out many times, FDA does not regulate the practice of medicine.  States have that authority.  However, FDA does plenty to “denounce” and “advise” on all sorts of issues related to the practice of medicine.  Sticking with drugs, there are scores of FDA public statements about who should not take a drug because FDA believes there is an unacceptable risk or simply because FDA has not approved or otherwise recognized the benefit of a particular use.  The whole concept of a use in a particular patient for a particular purpose being on-label or off-label relates to this.  What is off-label can relate to how old the patient is and how long the drug can be used continuously, for instance.  FDA requires the labels for generic drugs to match the labels for branded drugs, including various statements “denouncing” certain uses.  FDA issues monographs for certain categories of over-the-counter drugs that will invariably include at least one “DO NOT USE” statement.  FDA has issued many statements about class-wide issues that “endorse,” “denounce,” and/or “advise” by just about any reckoning.  We could go on.  Surely, FDA has some authority to do all of this.  The distinction cannot be as simple as FDA having authority to tell drug companies what they can and cannot do, but having no such authority to say anything directly to doctors and patients.  After all, access  to the FDA website is not limited to manufacturers and wannabe manufacturers.  Many statements by FDA are intended to be read by doctors and patient to relay FDA’s thinking on the safety and efficacy of drugs, including who should use them, for what purpose they should be used, and when to stop them.  It would be hard to fulfill the broad public health charge FDA has from Congress if it is could only communicate its decisions and thinking to the entities that it directly regulates.  (Extended to food, precluding FDA from telling consumers not to eat spinach recalled because of E. coli contamination would be pretty dumb.)

Were the FDA’s statements about the off-label use of ivermectin to treat or prevent COVID-19 in humans really that unusual as to be categorically different than all the statements from FDA nobody would argue are beyond its purview?  Some of them were via social media, which, like texting, can be criticized for deteriorating the quality and clarity of, to say nothing of the importance of punctuation in, written communications.  We might cut FDA at least a little slack for using social media to convey information during a pandemic that FDA clearly felt related to its overall public health mission.  The Fifth Circuit did not cut FDA any slack when it came to social media or view its communications collectively.  Finally turning to the facts of the case, the plaintiffs complained that FDA statements ranging from “You are not a horse.  Stop it with #ivermectin.  It’s not authorized for treating #COVID” to a comprehensive “Consumer Update” on “Why You Should Not Use Ivermectin to Treat or Prevent COVID-19” interfered with their medical practices (favoring the off-label use of the anthelmintic drug) and harmed their reputations.  The court below concluded that the suit was barred by sovereign immunity because the APA did not cover plaintiff’s claims, but it did not address standing.  Plaintiffs appealed.  This is where our a priori impressions enter the picture.  We would not have thought the APA covered challenges to FDA public statements about an approved drug (in the middle of a pandemic) or that a few individual physicians had standing to make those challenges.  A manufacturer with an NDA, ANDA, etc., for the drug in question, maybe, but not some doctors who prescribed it to their patients anyway.  The Fifth Circuit disagreed.  Of course, this was an appeal of a 12(b) motion, so all the allegation in the complaint were accepted as true.  (We note that the Fifth Circuit cited a pre-TwIqbal decision for this standard, so only factual allegations that were plausible and not conclusory should have been credited.)

While it held that the claims under the APA and common law were still unavailable, the Apter court found that the plaintiffs “can use the APA to assert their ultra vires claims against the defendants,” who can only be sued to the extent their consented to suit via the APA.  If that seems a bit circular, than maybe it is.

For instance, one of the Doctors’ foremost arguments under the ultra vires doctrine is that FDA has statutory authority to share data, facts, and knowledge, but not to recommend treatments or give other medical advice. The argument proceeds along these lines: (1) FDA cannot act without express statutory authority, (2) FDA does not have express authority to recommend against off-label uses of drugs approved for human use, (3) the Posts recommend against ivermectin, therefore (4) the Posts are beyond FDA’s authority. We agree that, at this stage, FDA has not offered even a “colorable basis” for rejecting this argument.

Id. at *13-14 (footnote omitted).  That “colorable basis” phrase, used here to suggest a burden for the defendants that did not exist, is more often seen in the context of the APA applying—and thus sovereign immunity being waived—if the agency had a “colorable basis” to act in the area is acted.  That is what the district court found below.  We can shortcut most of the analysis here by noting that the Fifth Circuit found “Nothing in the [FDCA’s] plain text authorizes FDA to issue medical advice or recommendations.”  Id. at *16.  Despite standard references to the need to confer with health care providers and factually accurate references to what indications were approved and whether veterinary drugs—which ivermectin is also—are approved to be used in people, the communications as a whole were seen as rendering “medical advice and recommendations.”  Clearly, the flippant nature of some of the social media posts weighed heavily in that analysis.  Less so were FDA’s statement about the safety issues in using ivermectin to treat or prevent COVID-19 in humans; safety concerns are the more common touchstone for FDA’s communications with the public about a drug or class of drugs.  This may be because the safety issues with the approved human drug were connected only to “large doses” and were not prominent among the overall FDA messaging, at least as presented by the court in its acceptance of the allegations in the complaint.

As to standing, the plaintiffs offered more than a mere disagreement with the substance and tone  FDA’s statements, as we had expected.  They claimed the FDA’s statements were referenced in medical board referrals for one plaintiff, pharmacies refused to fill their ivermectin prescriptions, and the lost privileges and academic positions because of their own statements.  It may be easy to plead a purported link between FDA’s statements and these “injuries,” but proving it will be another thing entirely.  Nonetheless, the court found these plaintiffs had standing to assert their sole surviving claim because it applied a fairly low bar for standing rarely used in an area like this:  the “zone of interests” test.  (See here, here, and here for some dives on standing.)  Under this test, there is no jurisdiction “’only when a plaintiff’s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit.”  Id. at *23 (quoting Texas v. U.S., 50 F.4th 498. 520 (5th Cir. 2022)).  Even with this “not especially demanding” standard, it is hard to see how the FDCA’s purposes anticipated plaintiff’s interests.  Indeed, the nature of the ultra vires claim is that statements from FDA that amounted to medical advice were not part of the FDCA at all.

To get around this, the Fifth Circuit cited a single provision from the FDCA and nothing from its legislative history.  The court characterized that provision, 21 U.S.C. § 396, as having “plain text [that] protects some aspects of the ‘practitioner-patient relationship’ from FDA’s “limit[ation] or interfere[nce].’”  Id. at *23.  Actually, the provision, within the “Miscellaneous” subchapter of the FDCA as enacted, states “Nothing in this chapter shall be construed to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship.”  We do not see how this provision does the trick.  It did for the Fifth Circuit:  “Here, because the Doctors are within the Act’s zone of interests, they can use the APA as a vehicle to assert their ultra vires claims against the Agencies.”  Id. at *24.  Again, this seems off to us, but the FDA will get a chance to contest the merits back down in the district court.

In terms of implications, we return to the issue of FDA’s regulation of truthful statements by drug or device companies about off-label uses of their products. If FDA has no authority to issue any advice or recommendations about the drugs and other medical products it regulates, including anything that amounts to denouncing their off-label use, then can it tell a manufacturer that it cannot offer truthful statements about those off-label uses?  Can it force a manufacturer to actively discourage off-label use simply because it is off-label and adds to sales numbers?  There has been a ton of litigation over the years where manufacturers were targeted even when the off-label use was considered standard of care.  Apter, of course, did not address any issues related to the interaction between FDA and a manufacturer or between a manufacturer and doctors or patients.  It did, however, further something of a trend, particularly in the Fifth Circuit itself, to place limits on FDA’s authority. 

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South Carolina is a lovely state with mostly lovely weather, though this time of year its appearance on the map looks like the country’s jutted chin daring a hurricane to sock it. South Carolina courts have been known to sock it to defendants, particularly in asbestos cases.    

Luckily, asbestos has nothing to do with today’s case, Britt v. Sorin Grp. Deutschland GmbH, 2023 U.S. Dist. LEXIS 158410 (D.S.C. Sept. 6, 2023).  From the perspective of your friendly neighborhood defense hack, the court’s decision is more good than bad. The defendant medical device manufacturer won all its summary judgment motions, except for punitive damages. The case is frankly a bit weird, because the plaintiff seemed to be claiming that the defendant’s device, which regulates blood temperature during an operation, caused an unusual bacterial infection years after the fact with no intervening problems. 

The case went through the MDL process and was eventually remanded to the District of South Carolina.  The defendant filed a summary judgment motion seeking dismissal of the claims for manufacturing defect, express warranty, implied warranty, negligent misrepresentation, misrepresentation via omission, violation of the South Carolina Unfair Trade Practices Act, and punitive damages. 

Manufacturing Defect

The plaintiff contended that the device was defective because the introduction of water during the manufacturing process contaminated the device, leading to the formation of a biofilm.  But the plaintiff alluded to no evidence that the device was defectively manufactured and did not conform to design specifications.  Rather, this claim was “more appropriately characterized as one for design defect because it alleges a potential design flaw” in the device.  (The complaint included a claim for design defect, but the defendant did not seek summary judgment on that claim.)  This was another instance of a plaintiff trotting out a design defect claim masquerading as a manufacturing defect claim.  It usually does not work.  It did not work here.    

Express Warranty

There was no evidence that the defendant “communicated any affirmation of fact, promise, or description” regarding the device “that became the basis of the bargain” in the sale of the device. The plaintiff relied on certain statements in the device’s Instructions for Use (IFU), but the IFU is a communication to the medical provider, not the patient.  Because the plaintiff presented no evidence that the defendant made any express warranties to the medical provider that extended to the patient-plaintiff as a third-party beneficiary, the express warranty claim was a goner.    

Implied Warranty

Unlike with the express warranty claim, South Carolina law might allow for a third-party beneficiary claim for an implied warranty.  But the manufacturer had conspicuously disclaimed the implied warranties of merchantability and fitness for a particular purpose. There was some squabbling over whether the disclaimer occurred before or after finalization of the purpose, but, in the end, the facts supported enforcement of the disclaimer and dismissal of the implied warranty claim. 

Negligent Misrepresentation

The negligent misrepresentation claim failed here because the defendant dealt only with the hospital, not the plaintiff, and the plaintiff never owned the product.  Nor was there any reliance. Moreover, South Carolina has not extended a negligent misrepresentation claim beyond statements made for pecuniary purposes resulting in pecuniary loss. 

Misrepresentation via Omission

Under South Carolina law, a duty to disclose exists only when there is some sort of fiduciary relationship between the parties.  No such fiduciary relationship (indeed, no direct relationship or communication of any kind) existed between the manufacturer and the plaintiff. Accordingly, the court dismissed the claim of misrepresentation by omission.    

South Carolina Unfair Trade Practices Act

Once again, the absence of any communication between the defendant and the plaintiff doomed the legal claim.  As with the misrepresentation claims, the plaintiff pointed to the omission of a warning.  And, as with the misrepresentation claims, the fact that the plaintiff never purchased the product from the defendant and never relied on the defendant spelled the end of the claim.  

Punitive Damages

Well, you can’t win them all.  Thedefendant did not move on design defect, and the court saw some room for a factual dispute as to whether the defendant’s conduct (presumably in designing the device) was “willful, wanton, or in reckless disregard of the Plaintiff’s rights so as to warrant punitive damages.”  Sigh.  In our opinion, it should be exceedingly hard to make out a claim for punitive damages for a design defect claim.  There is no aspect of alleged lying, as there is with failure to warn or misrepresentation.  Except for the rarest of scenarios, getting the risk-benefit calculation wrong does not seem to involve any bad faith or even recklessness.  But our opinion is not the law in South Carolina or anywhere else, so we’ll just have to swallow this one nasty bit in what is, overall, a fairly tasty opinion. Call it shrimp and grits, with a small side of liver.

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If a court tells you your only non-preempted claim is one based on a theory that your labeling does not comply with the Federal Food, Drug & Cosmetic Act (“FDCA”), it’s probably a good idea for your expert so opine.  Opting instead for expert testimony based on a consumer’s perspective is risky and likely problematic.  So discovered the plaintiff in Gwinn v. Laird Superfood, Inc., 2023 U.S. Dist. LEXIS159513 (S.D.N.Y. Sep. 8, 2023).

Plaintiff brought a putative class action against the manufacturer of powdered creamer products alleging its nutrition labels inaccurately described the serving size.  As noted above, in a prior decision denying defendant’s motion to dismiss, the court made clear that to avoid preemption, plaintiff had to prove a very specific claim.  That is because the FDCA “expressly preempts any requirement for nutrition labeling of food that is not identical to the requirements of the Act.”  Id. at *10.   

The FDCA has very explicit rules for how a manufacturer displays serving size.  A serving size is “an amount customarily consumed” and it must be expressed “in a common household measure that is appropriate to the food.”  Id. at *2.  There are also FDA regulations that state that for a powder, the serving size must contain a “reference amount” of 2 grams.  The “common household measure” must be one that “most closely approximates the reference amount.”  What that means is that the creamer labels would need to say something like, a serving size is “1 tsp. (2 grams)” and provide the number of servings per container.  The rub is that 1 teaspoon is not always exactly the same as 2 grams.  Remember, the FDA says the measure and the reference amount have to be “close,” not exact.

The regulations also state that the “number of servings” per container have to be calculated “according to the reference amount, rather than the household measure.”  So, if it is an 8 ounce package of creamer, that is 227 grams.  According to the FDA, the manufacturer needs to report the number of servings as 114 (227 ÷ 2).  But what if the consumer measures out the creamer and doesn’t come up with 114 teaspoons of powder?  She brings a lawsuit.

Then she hires an expert in metrology, the science of measurement.  Plaintiff provides that expert with one container of each type of creamer at issue (different flavors).  The expert empties each container to get the total weight and to loosen the powder.  Then he attempts to “verify the information on the label in the same manner one would expect of any consumer”—he measures it using a standard household teaspoon.  Id. at *6 (emphasis added).  Then he weighed each teaspoon and found that each held more than 2 grams of the product.  That means that with each serving, the consumer is actually using more than 2 grams causing the total number of servings per container to be less than the amount on the label. 

That brings us back to preemption.  Plaintiff’s claim can only survive if she has evidence that defendant’s label used a different measure than prescribed by the FDA.  In other words, if the label complies with the requirements of the FDCA, plaintiff’s claim must be dismissed.  Id. at *10-11.  Plaintiff’s expert, therefore, must address this question.  He did not. 

The court’s first reason for striking the expert report is simply that it is irrelevant:  the expert’s “consumer measurements have no bearing on whether [defendant] failed to follow the prescribed regulatory scheme.”  Id. at *11.  While consumers don’t have to adhere to FDA regulations in measuring their servings, the manufacturer does.  At best, the expert’s opinion goes to whether FDA’s regulations result in misleading labels for a consumer – but that issue is preempted.  Id. 

Second, the report does not comply with Rule 702’s requirement that an expert adhere to a scientifically reliable methodology.  The expert measured the creamer like a consumer, not in a manner one would expect of an expert metrologist.  One very basic example is the expert did not state whether he “packed or leveled” the product in each teaspoon.  As any home baker knows, there is a drastic difference between a heaping teaspoon of sugar and level teaspoon or firmly packed brown sugar and sifted powder sugar.  If the expert’s report doesn’t have even the type of information you would find in a standard recipe, it is difficult to conclude it applies the necessary scientific rigor for admissibility.

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As a defense lawyer, one grows accustomed to clear judicial days on which the state court can foresee forever.  See Thing v. La Chusa, 48 Cal. 3d 644, 668 (1989).  On those clear judicial days, when the court catches a glimpse of the possibility of harm shimmering off in the distance, one can be assured that an expansion of liability soon will follow.      

Not all state courts are quick to expand tort liability, however.  In Baker v. Croda Inc., __ A.3d __, 2023 Del. LEXIS 282, 2023 WL 5517797 (Aug. 24, 2023), the Supreme Court of Delaware was asked to gaze into the future, and it decided to leave liability tied to an actual injury in the here-and-now.

The Baker opinion did not involve a pharmaceutical or medical device (it involved a chemical, ethylene oxide), but it did involve an issue of particular concern to the blog:  Claims for medical monitoring brought by a class of plaintiffs who have no present injury, but who allege they are at an increased risk of developing cancer in the future.  As a remedy, the plaintiffs requested money in the present, for the “cost of reasonably medically necessary diagnostic testing for the early detection of illness, disease or disease process.”  

In response, Delaware definitively rejected the liability for no-injury medical monitoring claims, for the straightforward reason that:

[A]n increased risk of illness without physical harm is not a cognizable injury under Delaware law. Stated differently, an increased risk of harm only constitutes a cognizable injury once it manifests in a physical disease.

Baker, 2023 WL 5517797 at *2.

The first thing worth pointing out about Baker is that it came to the Supreme Court of Delaware by way of a certified question from the Third Circuit.  Good on the Third Circuit for certifying the question instead of plowing ahead and making an expansive Erie prediction.  But query whether the law actually was unsettled as the Third Circuit seemed to believe.  At least three times before, Delaware had declared that “claims in tort require an actual or imminent injury”—something that doesn’t exist when one has no present injury, but rather just an increased risk of maybe, perhaps experiencing an injury in the future.  See Baker, 2023 WL 5517797 at *3, citing Mergenthaler v. Asbestos Corporation of America, 480 A.2d 647 (Del. 1984) (holding that present physical disease is required to state a claim under Delaware law); Brzoska v. Olson, 668 A.2d 1355 (Del. 1995) (rejecting claims for mental anguish and medical monitoring because “damages for claims of emotional distress or mental anguish … are recoverable only if [an] underlying injury is shown”), and United States v. Anderson, 669 A.2d 73 (Del. 1995) (“requirement of a preceding physical injury prohibits plaintiffs from claiming that exposure to toxic substances, for instance, has created an increased risk of harm not yet manifested in a physical disease”).

Picking that apart a bit more, the Delaware Supreme Court explained that it is “axiomatic that all tort claims require an injury,” and that injury is defined in a way that excludes mere “increased risk” because, in Delaware, an injury in fact must be “actual or imminent, not conjectural or hypothetical.”

Turning to policy issues, the Baker opinion echoed the concerns expressed in the key federal opinion rejecting no-injury medical monitoring, Metro-North Commuter Railroad Co. v. Buckley, 521 U.S. 424 (1997).  Not unreasonably, both Metro-North and Baker recognized that allowing “traditional, full-blown tort liability” in the absence of an actual injury threatens “unlimited and unpredictable liability” and a “flood” of less important cases that could swamp the claims of those with injuries that do manifest, particularly because exposure to even toxic substances (fortunately) may never result in any harm. 

Both opinions also recognized that there is a competing policy concern, namely the injustice in having “economically disadvantaged persons” bear the cost of paying for their own diagnostic testing.  Baker did so to highlight complexities raised by the prospect of allowing no-injury medical monitoring claims, should Delaware’s General Assembly ever choose to take up legislation allowing such claims.  But to that, we can’t help but wonder why “more litigation” tied to a particular alleged toxic exposure —with all the resulting inefficiencies and transaction costs, yet ultimately limited scope—would be a better solution than making health care that broadly covers medically appropriate preventative care and diagnostic testing more widely available.  But we digress.    

And so we will leave Baker at that. Bexis can add another case to his no-injury medical monitoring 50-state survey.

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Since before the Dobbs decision reversed decades of precedent on reproductive rights, we have been looking at the implications for drug and device manufacturers.  See here and here.  Our posts have, of course, followed the ins and outs of the notorious AHM (or Hippo) litigation as it makes its way up to the Supreme Court for an inevitable merits decision.  See here , here, and here.  We have also been following a challenge in the Southern District of West Virginia to state law effectively banning and criminalizing the use of medications that the FDA has approved specifically for abortion.  In that case, GenBioPro, Inc. v. Sorsaia, the only US manufacturer of (generic) mifepristone contends that a series of West Virginia laws violate both the Supremacy Clause and Commerce Clause.  When the court rejected the defendants’ challenge to the plaintiff’s standing, we were encouraged about the plaintiff’s chances on preemption, noting both the court’s rigor and its rejection of the Northern District of Texas court’s result-driven analysis in AHM.  A week later, in discussing the Supreme Court’s National Pork decision on the dormant commerce clause, we offered:

We find it unlikely, but not impossible, that some state law about medication abortion might still violate Healy and Walsh.  For instance, Sorsaia primarily involves a challenge to a state trying to prevent in-state use of an FDA-approved drug for its FDA-approved use.

We are sorry to say that our optimism on preemption was misplaced and our prediction on the dormant commerce clause was correct.

Last week, the district court in GenBioPro, Inc. v. Sorsaia, No. 3:23-0058, 2023 U.S. Dist. LEXIS 149195 (S.D.W. Va. Aug. 24, 2023), considered the rest (i.e., not standing) of the defendants’ motions to dismiss.  The first part of the decision provided false hope for the plaintiff.  After recapping the state laws and the regulatory history of mifepristone, the court stated:

The result of [FDA’s] heightened scrutiny and extensive review is a REMS which unambiguously assures the safety of the drug without any additional safeguards from the States.  Defendants have not disputed the safety of mifepristone, nor could they.

Id. at *8.  This came with a declaration that the court did not find the Fifth Circuit’s AHM decision’s “primary determinations to be persuasive.”  Id. at *7 n.8.  The Sorsaia court then rejected the defendants’ argument that the enunciation of the new “major questions doctrine” in West Virginia v. EPA, 142 S. Ct. 2587 (2022), essentially wiped out the possibility of preemption.  We will not dwell on that part, because the argument was weak.  Defendants contended that anything about abortion was a “major question” that had to be decided by Congress rather than FDA and abortion was not mentioned in the FDCA, FDAAA, or other acts governing FDA.  The FDCA “does [not] mention any other specific procedure, device, cosmetic, or medication it instructs the FDA to regulate.”  Id. at *14.  Instead, FDA’s regulation of mifepristone is authorized by numerous provisions, including “FDAAA’s express command that FDA promulgate a REMS for Subpart H-approved drugs (including mifepristone), subject to certain delineated principles, including accessibility.”  Id. at *13.  That was the end of the part we like.

The preemption analysis started off on the wrong foot in the same way many courts have before—misapprehending that there is a broad presumption against preemption.  Citing Levine, the Sorsaia court stated “there is a presumption against preemption, especially in a field traditionally occupied by the States.”  Id. at *17.  Not for implied preemption.  There is such a presumption in field preemption, which was not at issue in either Levine or Sorsaia.  Since the Supreme Court’s decision in Puerto Rico v. Franklin-California Tax-Free Trust, 579 U.S. 115 (2016), eight years after Levine, there is no such presumption in express preemption either. Albrecht, which reworked Levine on implied preemption, did not mention any such presumption.  With this non-existent presumption in play and the focus wrongly on Congress’s intent as to mifepristone in particular, Sorsaia rejected both obstacle and conflict preemption.  This rejection also hinged in large part on the characterization that the West Virginia laws merely “restricted” the use of mifepristone, rather than functionally banning and criminalizing the use of an FDA-approved prescription medication for its FDA-approved intended use.

On obstacle preemption, the court analyzed the REMS provisions in FDAAA as “directing the FDA to consider burden and access when promulgating REMS with elements to assure safe use to ensure that the elements themselves would not be unduly burdensome upon patient access.”  Id. at *22 (emphasis in original).  Combined with the fact that Roe was still in effect when FDAAA passed, the Sorsaia court concluded Congress did not intend “for the FDAAA access language to preempt state abortion restrictions which would have been unconstitutional at the time the FDAAA was passed.”  Id. at *23.  This perverse reasoning dictated that “the [state] UCPA and abortion restrictions do not pose an ‘unacceptable obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”  Id. (citing Levine).  “Any additional or incidental burden West Virginia has placed upon patients wishing to obtain mifepristone”—presumably, leaving the state to receive medical care without the threat of felony prosecution—“does not provide an unconstitutional ‘obstacle’ to the FDAAA’s unambiguous directive to FDA.”  Id. at *24.  One state criminalizing the prescription of a medication that FDA has approved for use by prescription throughout the United States does seem like an obvious obstacle to the charge in the FDCA that FDA has sole authority to approve prescription medications.

The analysis of conflict preemption was similarly flawed, as we see it.  Citing Bartlett and Mensing, the Sorsaia court described the issue as “[t]heoretically—regardless of the intent of the FDAAA—the mifepristone REMS could directly conflict with West Virginia’s restrictions, thereby creating a system in which individuals regulated by both federal and state law could not comply with both mandates.”  Id. at *25.  This is a bit backwards, because FDA’s authority and its approval of defendant’s generic mifepristone predated the West Virginia ban and the Supremacy Clause puts the focus on whether state law conflicts with federal law.  As we have stated several times before, once the FDA says “yes,” a state cannot say “no.”  See here, here, and here.  That is about as direct a conflict as we can imagine.  In any event, Sorsaia sidestepped a true conflict analysis by concluding that the manufacturer was “not regulated by the UCPA at all.”  Id. (emphasis in original).  The reasoning was that certain UCPA provisions were directed at “licensed medical professionals,” which did not include a drug manufacturer.  This analysis ignored that another provision of the UCPA discussed earlier in the opinion made it a felon for “any other person [to] induce[] . . . or attempt[] to . . . induce an abortion.”  Id. at *2.  Unless manufacturing, selling, and distributing the only approved abortifacient will never be considered an attempt to induce an abortion, this sidestep should not have worked.  The obvious issue, especially because plaintiff sells a generic drug, is that a ban of an FDA-approved drug conflicts with the FDA’s approval by all conventional reasoning.  The Sorsaia court dropped a confusing footnote on this issue, citing Bartlett and saying it rejected “Defendants’ argument that GenBioPro may simply choose to stop selling mifepristone in West Virginia, and thus avoid any conflict between state and federal law.”  Id. at *26 n.10.  However, the Supreme Court’s treatment of the “stop selling” argument means that a state ban creates a conflict with the federal action of approval and must yield.

There was more.  In rejecting the defendants’ challenge to standing, the court had concluded that the plaintiff could assert the interest of licensed medical professionals in West Virginia who purchased and otherwise planned to distribute its mifepristone.  The court still found no conflict because “the UCPA is a restriction on the incidence of abortion, rather than a state directive in a direct conflict with the logistical REMS regulations.”  Id. at *28.  That bit of contortion was purportedly supported by the Supreme Court’s rejection of preemption in cases about uranium mining (a field preemption analysis where the petitioner did not raise an impossibility argument) and horsemeat (express preemption analysis only).  Id. at *29.  These have little to do with the conflict/impossibility preemption analysis for a drug specifically approved by a federal agency with specific requirements imposed by a REMS.

The Sorsaia court also rejected field preemption and dormant commerce clause challenges to the state law.  We think these were fairly foregone conclusions, so we will not spend time on them.  The interesting part for dormant commerce clause devotees is that the court did a Pike balancing test, the viability of which has been debated since National PorkOne significant aspect of plaintiff’s case was kept alive, though.  West Virginia law prohibits prescribing mifepristone via telemedicine and the current REMS on mifepristone expressly authorizes it.  This is a conflict that the Sorsaia court recognizes:

This conflict between the REMS and the state statute creates the kind of impossibility preemption discussed above—a licensed medical professional prescribing mifepristone could not comply with both the access determination made by FDA and the access determination made by West Virginia as to telehealth.

Id. at *37.  It is incongruous to find a conflict here but not as to the more restrictive West Virginia laws, but it does mean the case is still alive.  Eventually, the case seems likely to get up to the Fourth Circuit, as which time the rejection of broader preemption in this opinion will be examined.  In terms of tea leaves, the Fourth Circuit did reverse a plaintiff’s verdict in Knight v. Boehringer Ingelheim Pharmaceuticals, Inc., 984 F.3d 329 (4th Cir. 2021), because the district court applied Levine to reject implied preemption and then Albrecht came down.  Whether Sorsaia’s reliance on Levine after Albrecht will lead to the same fate remains to be seen.  Of course, what the Supreme court does with AHM in the interim may be determinative.

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Patora v. Vi-Jon, LLC, 2023 U.S. Dist. LEXIS 153421 (S.D.N.Y. Aug. 30, 2023), is a typical express preemption decision resulting in dismissal of a typical consumer protection-based purely economic loss class action against an over the counter (OTC) product.  The plaintiffs, suing on behalf of a putative class, alleged that they purchased an OTC laxative product that contained a bacterial contaminant.  The defendant had recalled the product. The plaintiffs asserted that they became ill as a result of the bacteria, but their claim was not for personal injury, it was for the money they paid for the laxative.  According to the plaintiffs, the laxative label was deficient because it did not list the bacteria as an ingredient, nor did it warn of the possibility of bacterial contamination.  The plaintiffs contended that they, naturally, would not have purchased the product if they knew of the bacterial contamination.  The product was worthless. The plaintiffs wanted their money back.  The complaint set forth causes of action for deceptive acts or practices and false advertising under New York General Business Law.

The defendant filed a motion under Fed. R. Civ. P. 12(b)(6) to dismiss the complaint because the claims were expressly preempted by the Food, Drug and Cosmetic Act, 21 U.S.C. section 301 et seq. (FDCA).  The FDCA contains an express preemption provision for state laws governing OTC drugs, including laxatives.  Under that express preemption provision, no state can enforce any OTC labeling requirement not “identical” to what the FDA requires.  In essence, the plaintiffs were attempting to turn what amounted to manufacturing defect allegations (if the bacteria was in the laxative, it got in by mistake) into a warning claim more amenable to class action status by claiming that a possible contaminant should have been listed as an “ingredient” in the OTC product’s labeling.  We’re tempted to call the claim clever, but it actually isn’t.  We’ve seen it before and it has failed before.  

The FDA promulgated regulations define a drug active “ingredient” as a substance “intended” to furnish pharmacological activity or other direct effect in the diagnosis, mitigation, treatment, or prevention of disease.  A contaminant does not come close to fitting the bill. An inactive ingredient is any other “component,” which, in turn, is “intended” for use in the manufacture of a drug product. Intention, then, is at the heart of the matter.  Some people say that divining anyone’s intention is impossible.  Perhaps you’ve heard something like that with respect to some recent indictments of rather famous figures.  But juries make determinations about intention every day.  Sometimes judges do, too,  Sometimes it is really easy.  That was the case in Patora.  No one suggested that the alleged bacteria was intended to be in the laxative.  Therefore, the bacteria is not an active or inactive ingredient, and federal law does not require that the bacteria appear on the ingredients list.  The plaintiffs’ insistence that the bacteria be listed as an ingredient is not only not “identical” to federal regulations, it is directly contrary to them.
Moreover, to the extent that the plaintiffs’ claim is more about absence of warning as opposed to absence of an ingredient listing, the claim still runs counter to federal law.  OTC products are required to contain warnings included in an applicable OTC monograph.  Not all OTC products are included in a monograph, but the laxative product in question was listed in a 2023 monograph.  That monograph set forth nine specific warnings.  The Patora court read the monograph and concluded that “neither the general OTC requirements for warning labels nor the 2023 monograph laxative-specific requirements for warning labels mandate a warning related to the potential inclusion of any bacteria” – let alone the specific one in this case.  

Since the FDCA does not mandate the disclosure that the plaintiffs were demanding, the plaintiffs’ claims were expressly preempted. The Patora court quoted another case saying that the plaintiffs’ claims are “exactly what the FDCA does not permit.”  Given the obvious express preemption of these contaminant-as-ingredient claims, and given the build-up of precedent on precisely this point, by now these claims by plaintiffs are utterly frivolous.  

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As we’ve discussed before, the United States Supreme Court, in Puerto Rico v. Franklin-California Tax-Free Trust, 579 U.S. 115 (2016), sent the presumption against preemption, in express preemption cases anyway, into the dustbin of history.

[B]ecause the statute contains an express pre-emption clause, we do not invoke any presumption against pre-emption but instead focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent.

Id. at 125 (citations and quotation marks omitted).

Continue Reading On the Erstwhile Presumption Against Preemption, the Third Circuit Sticks Out Like a Sore Thumb
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We observed oral argument the other day in a case that could have a significant impact on potential liability under California tort law for pharma companies and all other innovators.  In Gilead v. Superior Court, No. A165558 (Cal. Ct. App. First Dist.), a panel of the California Court of Appeal is considering whether a prescription drug manufacturer can be liable in tort not for a product defect, but for negligence in failing to develop a different, allegedly safer product sooner than it actually did.  This is an important case, since a decision in favor of the plaintiffs would create a new “duty to innovate” under which a drug manufacturer could be liable for failing to develop a different drug that, in 20/20 hindsight, might have been better for some patients.  No court has allowed this. 

At issue are life-saving antiretroviral drugs used to treat patients with HIV, and we have written on similar cases involving the same drugs and legal theories before.  See, e.g., here and here.  The defendant in Gilead has developed multiple drugs used to treat or prevent infection with the AIDS virus, including several containing tenofovir disoproxil fumarate (“TDF”) as an active ingredient.  That is the group of drugs that the plaintiffs allegedly used and that allegedly caused harmful side effects.  Keep that in mind.  These plaintiffs are claiming that they used a product and suffered physical harm as a result—i.e., unambiguously product liability claims.

The problem for these plaintiffs is that there is no evidence of a product defect in TDF drugs.  As a result, they are not claiming a defect in design; they are not claiming that the drug warnings were inadequate; they are not claiming that TDF drugs should be withdrawn from the market; and they agree that TDF drugs have benefited and continue to benefit thousands of patients. 

So the plaintiffs pivoted.  The FDA approved the defendant’s first TDF drug in 2001, and the company started its first clinical trial on a different compound—tenofovir alafenamide (“TAF”)— about a year later.  Plaintiffs now claim that TAF has a better safety profile compared to TDF and that the defendant unreasonably (i.e., negligently) paused TAF’s development, thus depriving them of a drug that they say might have avoided their injuries. 

That is how we got to oral argument in the California Court of Appeal.  The trial court denied the company’s motion for summary judgment and ruled that the plaintiffs could pursue a negligence claim based on the purported delay in developing TAF drugs.  On the company’s interlocutory appeal (via a discretionary writ petition), highly skilled advocates for both sides argued their positions to a curious and prepared three-judge panel for more than an hour. 

The defense emphasized at the outset that no court has ever recognized a duty to develop a product more quickly.  One judge quickly challenged counsel on whether the duty here is the ordinary duty to exercise reasonable care to avoid foreseeable injury to others.  Another asked whether this was merely “old world negligence.”  Thus began argument on the origin and limits of tort duties in California.  Yes, the California Civil Code codifies a duty to avoid harm to others, but that does not mean everyone has a duty to avoid everything.  In other words, you can’t just say there is a “duty” and call it a day.  You have to ask what is the duty and what does the duty require?

Counsel argued that the answers depend on public policy, and compelling policy factors weigh against creating this new duty “not to delay development of a safer alternative drug.”  To begin with, the new duty would undermine decades of California product liability law, which centers on proof of a product defect.  Recall that these are unambiguously product liability claims, yet the plaintiffs here are seeking compensation without claiming that the product they used was defective. 

Moreover, a new “duty to innovate” would wreak havoc on product development, not only for prescription drug manufacturers, but throughout the biotech industry and beyond.  Companies make decisions on product development every day, including whether and where to allocate finite resources.  Imagine the chilling effect on innovation if companies had to make those decisions at the risk of being second guessed by juries 20 years down the road.  Finally, the plaintiffs’ proposed duty is unnecessary because product liability law already protects consumers.  The defendant here is not claiming “immunity.”  It was and remains subject to liability under established product liability law, provided the plaintiffs could plead and prove a claim. 

In the end, counsel urged that imposing undue liability would discourage drug development.  In Brown v. Superior Court, 44 Cal. 3d 1049 (1988), the California Supreme Court rejected strict product liability for prescription drugs partly because public policy favors the development and marketing of beneficial new drugs.  That public policy applies here.  By subjecting development decisions to hindsight scrutiny, years after the fact, the plaintiffs’ proposed duty would diminish a manufacturers’ incentive to develop superior products, presumably because any new, “better” product would open the door to claims that it should have been developed earlier and replaced its predecessor sooner.  That is especially true considering that tort inquiries are skewed, i.e., they are decided with reference to one plaintiff, which discloses only the risk side without consideration of the benefits. 

The plaintiffs argued out of the blocks that their negligence claim alleging a failure of reasonable care can and should proceed separate and apart from a product defect claim.  One judge asked whether TDF could be “defective” because there was a better alternative, apparently trying to reconcile the plaintiffs’ allegations with established product liability law.  Plaintiffs, however, did not bite.  Counsel argued that proof of a product defect in TDF would be a specific analysis under California law, but the plaintiffs’ claims have nothing to do with TDF.  As plaintiffs who took the TDF medicines, their claims are about the defendant’s failure to develop more quickly and market faster the later drug, TAF.  (Query how the plaintiffs’ claims could have nothing to do with a defect in TDF, the drug they ingested and that allegedly caused them harm.  But we will come back to that.) 

The duty, according to plaintiffs, is the general duty under the California Civil Code to take reasonable care to avoid causing injury to foreseeable product users.  In the plaintiffs’ view, the defendant has turned duty on its head:  Instead of asking whether the court should create a new duty, the court should accept the Civil Code as the source of a duty of reasonable care and then ask whether public policy should create an exception.  On this point, plaintiffs argued that the California Supreme Court has held that negligence and strict products liability are two separate things. 

One judge expressed surprise that, if plaintiffs’ view is the law, why courts don’t see more cases seeking liability based on product development decisions, using off-road vehicles as an example.  That prompted the plaintiffs to observe that most products are covered by strict products liability.  Prescription drugs are the exception under Brown v. Superior Court, which plaintiffs have to find a way around.  This to us was a significant point, since it basically admits that plaintiffs are trying to evade the limitations that California product liability law places on pharmaceutical design defect claims and the underlying public policy recognized by decades of California precedent. 

Two judges asked whether that means plaintiffs were proposing a duty to innovate, which plaintiffs promptly denied.  This part frankly was confusing, since plaintiffs argued that the defendant had “already innovated” TAF.  But what does that mean?  Sure, the defendant had TAF in development, but there are different stages of innovation, so at what point does the law impose an obligation to bring a product to market, or else face the prospect of tort liability at some undetermined point in the future? 

One judge asked that very question, noting that manufacturers would need to know if and when the law imposes that obligation.  Plaintiffs did not really have an answer, but reverted to their argument that the defendant’s breach of duty was deciding to “delay” development of TAF and that reasonableness is the standard.  Plaintiff closed by noting again, in response to a question, that this is not a product liability case.  The Court of Appeal might accept that, but of course we do not:  The plaintiffs’ core allegation is that they used a product and were harmed as a result.  This is a product liability case. 

On rebuttal, the defense reiterated that plaintiffs are claiming a duty to innovate and that, yes, manufacturers need to know whether and when the law imposes a duty to bring a product to market.  The defense also emphasized the consequences of creating a new duty.  Product development questions are not for juries to decide in hindsight 20 years after the fact.  The California Supreme Court protected incentives to develop and market new and beneficial drugs in Brown v. Superior Court, and the Court of Appeal should not create new duty that would undermine those incentives. 

We have a few observations after reflecting on this oral argument.  First, we agree with the defense that the Court of Appeal can and should confront and decide the core issues of duty presented by this petition.  There was some argument regarding waiver and preservation of issues (which we spared you in our recap).  But, in the end, the advocacy on both sides was top rate, and the panel was engaged.  No court will be better equipped to decide these issues anytime soon. 

Second, no matter the outcome, a petition for review to the California Supreme Court is certain.  The Court of Appeal clearly understands this too, as the panel expressly noted that it was not taking the matter under submission.  That is highly unusually under California procedure.  Because the statutory clock for filing an opinion in California starts ticking upon submission, the Court of Appeal has basically granted itself an unlimited extension of time.  The Presiding Justice said that the Court might request more briefing, or it might take the matter under submission on a later date.  Either way, the Court admonished the parties to “not call us, we’ll call you.”  They know their opinion will be subject to scrutiny and will take their time. 

Third, we could hazard a prediction of the outcome, but could not do so with any certainty.  The panel clearly understood from the beginning that the plaintiffs were asserting a negligence liability theory separate and apart from products liability (“old world negligence”), but the judges also explored the policy considerations more and more as the arguments progressed. 

Fourth, in our biased view, the defense has the better argument on the merits.  The plaintiffs are simply asking for too much.  If their claims really are unrelated to TDF drugs and instead focus only on the company’s purported delay in developing the allegedly safer TAF drugs, then it is difficult to see any limit to “failure to innovate” liability.  Taken to its logical conclusion, any person who might have benefitted from a product not yet on the market could claim that the manufacturer should have set different priorities or moved faster, including patients who received no treatment at all.  Would, for example, the advent of an effective anti-Alzheimer’s drug create claims for the millions currently afflicted by that condition?  That really would take the “product” out of product liability.  We also believe it is obvious that product development decisions should not be subject to 20/20 hindsight and that the Supreme Court’s endorsement of drug innovation in Brown v. Superior Court rings very loudly here.  Finally, the defense hack in us sees no one benefitting from this other than litigants and their lawyers.  A new duty to innovate will not result in more beneficial drugs coming to market, and it would likely have the opposite effect by penalizing companies that chose one development pathway other another, as all manufacturers do. 

We will keep you posted.