Last week, a California court issued a ruling construed as being anti-industry. The decision defines a company's legal duty to its consumers when a competing and allegedly safer drug is in the development pipeline. Astonishingly, the judicial opinion also insinuates itself into corporate product-development strategies. But does this case really establish the broad anti-industry precedent that some fear?
“Whether a duty exists is a question of law to be resolved by the court.”
The case concerns the drug manufacturer Gilead  and its drug Tenofovir. According to the POZ website, an unaffiliated and acclaimed source of HIV/AIDs information:
“Tenofovir is one of the most widely used medications for HIV and hepatitis B treatment; it is also approved for HIV pre-exposure prophylaxis (PrEP). Two forms of the drug are available: the older tenofovir disoproxil fumarate [TDF} and the newer tenofovir alafenamide (TAF].”
Both drugs are FDA-approved, marketed, and widely prescribed. However, 24,000 plaintiffs are claiming unspecified skeletal, kidney and other injuries allegedly caused by the older drug TDF.
The FDA pre-emption doctrine generally bars claims against FDA-approved drugs. So, instead of suing for manufacturing a defective product, which plaintiffs foreswore they would not do, they claim Gilead was negligent in product development –not for the TDF they took, but for the newer TAF that was unavailable to them.
The plaintiffs allege that after an early investigation of TAF and after receiving FDA approval for TDF, Gilead chose to pause TAF’s development. Because TAF has a lower toxicity profile for certain effects, plaintiffs claim that had TAF development been pursued, they would have been afforded the choice of which drug to take – a choice to which they claim entitlement. The claimants couch this action as a violation of the duty to act in a safe manner, given that the new drug, they argue, was safer. They also allege fraudulent concealment, i.e., that Gilead had a duty to disclose information regarding a product in development.
Duty is the first of four necessary elements of proof in a negligence action.
To be clear, the plaintiffs do not claim that Gilead manufactured a defective product or failed to properly warn of side-effects. Nor are they seeking to have TDF withdrawn. Indeed, even the court noted:
“plaintiffs’ claim is entirely consistent with a conclusion that the benefits of TDF use for hundreds of thousands of HIV/AIDS sufferers have vastly exceeded the harm from its side effects.”
In legal terms, plaintiffs are not bringing a product liability case. Instead, they allege negligence on the company’s part – unrelated to TDF’s design or manufacture -- but in decision-making regarding not bringing TAF to market earlier.
The question before the court was not whether Gilead is liable but whether the plaintiffs were barred from bringing suit.
Seeking to end the matter before expensive and prolonged discovery proceedings which would elicit factual material on both sides, Gilead petitioned for Summary Judgment – asking the court to decide the matter purely on a construction of the law, independent of any facts that might color the determination which would be developed during discovery. For the purposes of summary judgment, unproven facts must be construed against the proponent, so bringing a summary judgment motion early in the proceedings is considered a risky legal maneuver.
Courts prefer to allow both sides an opportunity to discover all facts before barring them at the courthouse door. As the court says:
“The summary judgment procedure is drastic and should be used with caution so that it does not become a substitute for an open trial…. doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion."
Holding that “the default rule [is] that each person has a duty ‘to exercise, in his or her activities, reasonable care for the safety of others’, tThe court addressed the legal question presented: Did Gilead have a duty to market a drug that the plaintiffs claimed was safer?
“In context, then, the duty question … is whether a drug manufacturer…has a duty of reasonable care to users of the current drug when making decisions about the commercialization of the alternative drug.”
So, why did Gilead’s attorneys pursue this legal strategy, knowing that Summary Judgment motions are rarely granted?
A Good Litigator is a Good Gladiator
In addition to the obvious benefit of foreclosing the suit at its inception, a Summary Judgment motion forces the opposing party to “lay bare their claim.” To oppose the motion, the claimants need to specify exactly what duty they will claim Gilead violated, forcing them to “tip their hand” at the outset of the litigation. And they do.
The claimants allege Gilead violated its duty of due care because Gilead ostensibly knew that TAF was safer and at least equally effective and that the decision to pause its development (“commercialize” was the term used by the court) was solely for financial aggrandizement. To prevail, they must prove each of these assertions (and more). Inherent in this proof is whether,
- TAF is actually safer and
- Gilead had actual knowledge of TAF’s safety when they made their decision.
Since Gilead’s decision to pause the development of TAF was made before a Phase III trial, which is required for FDA approval, Gilead argues that it could not possibly have had the requisite knowledge when they made their decision, suggesting this is a legal determination. The court ruled that both matters remain to be proven on the facts, and Gilead is then free to ask for summary judgment again.
The Fraudulent Concealment Claim
“Gilead argues that it is entitled to summary adjudication of this claim because it was under no duty to disclose to plaintiffs facts relating to TAF, which was not available as an alternative to TDF for the treatment of HIV/AIDS. We agree.”
While denying the first part of Gilead’s summary judgment motion and nixing Gilead’s claim that they were protected from suit by the pre-emption doctrine, the court did rule in Gilead’s favor on the fraudulent concealment claim, holding that Gilead has no legal duty to the injured claimants (or their doctors) to divulge information regarding the drug in development.
The facts, just the facts, and nothing but the facts
We now return to the facts on the plaintiff’s duty claim. Gilead will have full opportunity to refute those allegations after which they will have multiple opportunities to relitigate the related law. Again, the Court did not find in favor of the injured claimants. It merely says plaintiffs have the right to sue for negligence, a right transcending claims relating to the product. To prevail, the claimants still must prove all four elements of a negligence case. And that will take some doing.
 Disclaimer: It should be noted that a member of our Board has worked for Gilead. They, the Board, and our administration were not involved in developing this article or its contents. It is the sole work of the author, who has no ties to Gilead or any other drug manufacturer.