ACSH Explains: Negligent Drug Manufacture

Drug development can be hazardous. Recently, a California court held that product users could sue the drug manufacturer, Gilead, for negligence in failing to commercialize a product different from the one they used. Two conditions are yet to be proven to sustain their claim: that Gilead had actual knowledge the new product was safer and that the decision was solely financially driven. But, even if those facts are proven, they are still not enough to sustain a lawsuit.
Image by Mohamed Hassan from Pixabay

The case in question concerned Gilead’s drug Tenofovir, widely prescribed for the treatment of HIV and Hepatitis B. It is available in two forms: the older tenofovir disoproxil fumarate (TDF) and the newer tenofovir alafenamide (TAF].

There is no claim that either product is defective or their warnings are improper. Instead, the claimants focus on Gilead’s allegedly negligent decisions to pause the development of TAF after a Phase II trial (in favor of marketing the already FDA-approved TDF), claiming Gilead knew TAF was safer and at least equally effective and that the decision to pause TAF’s development was solely for the company’s financial aggrandizement. You can find a more detailed discussion of the initial rounds in this case here.

Negligence Transcends the Product

These allegations are not enough to prevail: Four elements must be proven to satisfy a claim for negligence.

  • Duty
  • Breach [of the standard of care]
  • Causation
  • Damages.

Let’s consider each in turn.

Is There a Duty to Commercialize?

The case is not about defective product (drug) design or manufacture; the plaintiffs’ focus is on the drug company’s allegedly negligent commercial decisions.  To prevail, the first step in establishing negligence is proving the existence of a duty of care.

“In California, the ‘general rule’ is that people owe a duty of care to avoid causing harm to others and that they are thus usually liable for injuries their negligence inflicts.”

To conceptualize the difference between a product-oriented duty and a duty associated with general negligence, the California court reached for “the Chicken Pot pie case.” Here, the plaintiff was injured after consuming a chicken enchilada. That court addressed whether the restaurateur could be liable, not for serving a defective chicken pie, but for negligence in including a one-inch chicken bone. That court said yes, and the Gilead court seized on that ruling, concluding:

 “the duty of a manufacturer to exercise reasonable care can, in appropriate circumstances, extends beyond the duty not to market a defective product.” [emphasis added]

The question in the Gilead case is, under what circumstances does the duty present itself?

To establish this claim, the plaintiffs must assert factual testimony that reasonable manufacturers would commercialize two similar drugs simultaneously and that failure to do so is careless or negligent corporate practice. The court held:

“In context, then, … we must address … whether a drug manufacturer, having invented what it knows is a safer, and at least equally effective alternative to a prescription drug that it is currently selling and that is not shown to be defective, has a duty of reasonable care to users of the current drug when making decisions about the commercialization of the alternative drug.” [emphasis added]

The claimed superior safety of TAF is a fact yet to be litigated and not the subject of the summary judgment motion brought by Gilead, which entirely focuses on the legal doctrine involved.

The claimants will yet have to prove the decision to pause developing TAF was made after actual knowledge that TAF was safer, knowledge that, even if true, likely was unavailable until after a Phase III trial, which had yet to be undertaken at the time the decision was made.

Breach of the Standard of Care, - “negligence”

The claimants must also prove the defendants breached the standard of care, another jury question, based on relevant facts. Enveloped in deciding a manufacturer’s carelessness is proving that the plaintiffs and their physicians would foreseeably choose the newer drug. Entangled in this consideration are the trade-offs in prescribing TDF.

Causation and Damages

Third, the claimants must prove the breach of the standard of care directly caused their harm (which, as I have written, is broken into two components: general and specific), and fourth, they must prove that the allegedly negligent actions, i.e.., failing to provide TAF, directly caused actual and compensable harm (damages).

Gilead details additional steps in the causal chain to be proven. First, the FDA must approve the alternative drug candidate, which is far from a given, as only 12.5% of drugs receive FDA approval.  Second, the patient’s physician must decide to switch the patient to the new medication after it is approved. The second premise is more disconcerting. The court seems to think that after FDA approval, the manufacturer would reasonably expect doctors to prescribe the new medication in place of the old. But that, too, is not a given; there are other considerations, such as cost. Further, as with all medicines, there are trade-offs. For example, some individuals taking TDF note a beneficial reduction in harmful LDL cholesterol. [1] And doctors may be disinclined to switch medications in patients tolerating an older drug, which is arguably better suited for some patients.

No Duty to Innovate

The court did agree with Gilead that there is no duty to place the manufacturer

“under an endless obligation to pursue ever-better new products or improvements to existing products [which] would be unworkable and unwarranted.”

We can expect the type of information generated by the FDA’s required phase II and III trials (which are required for drug evaluation) to be litigated in depth. Yet until resolution, the legal decision places pharmaceutical manufacturers in a quandary regarding how far they can investigate a potential product before facing litigation for information secured later in a product’s development. In the real world, any product (or drug) that mimics one already in use might be put on the back burner at the earliest phases of development for fear of litigation, stifling innovation and development.

At the end of the day, the legal focus of the summary judgment motion and the consequent lack of factual information hamstrung the court, a situation it notes repeatedly.

“Ultimately, however, the problem remains the lack of a factual record by which to assess whether it is appropriate to recognize a categorical exception for decisions made before the completion of Phase III trials.”

Such is the situation with summary judgment motions- dispositive facts are unavailable to the court.  In choosing this legal strategy, Gilead was able to foreclose the fraudulent concealment claim at the outset as well as force the plaintiff to lay bare the theory of their case. But the negligence claim is still open -- for now: the trade-offs of making the strategic summary judgment decision.

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.


[1] “TDF leads to lower cholesterol and triglyceride levels, which can lessen cardiovascular risk. TAF does not have the same beneficial effect on blood lipids, and it may be linked to greater weight gain.” POZ - an online patient advocacy group and magazine.