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Pharmaceuticals and products liability litigation Posted 30/03/2018

In 2016, healthcare spending represented 17.9% of the economy of the US, a slight increase from 2015. By 2016, the average consumer in the US expended US$1,100 per capita on prescription drugs. Authors Katie McCarthy and Richard Hunter discuss the interconnections between the different types of product liability claims related to marketing and manufacturing of drugs in the pharmaceutical industry, rising drug costs, the increasing availability of generics in the marketplace. They also discuss several major cases and the outcomes of those cases as they relate to the social responsibility of drug manufacturers [1].

The existence of a robust market for pharmaceuticals in the US and worldwide has raised several important issues. These issues are clearly interrelated because the price of and demand for pharmaceuticals affects the nature of the manufacturing process and thus the area of law termed ‘products liability’ and the creation of the generic market for drugs. The current mix of patented and generic drugs has spawned some of the most controversial cases adjudicated in the legal system of the US relating to the liability of drug manufacturers for defective pharmaceutical drugs.

Generics companies can normally not be sued under US state law over allegations that they failed to provide adequate label warnings about potential side effects [2], because this is ‘pre-empted’ by federal law which states that generics manufacturers have to have the same labelling as their brand-name counterparts [3]. However, in November 2013, the US Food and Drug Administration (FDA) proposed a new rule, which would allow generics makers to change their labelling in the same way as brand-name manufacturers already do [4]. This change was met with concern from generics groups, with fears that liability cases could drive up the costs of generics [5].

This study outlines the relationship of the price of pharmaceuticals with problems extending to the area of products liability litigation. It draws together information relating to the nature of a product’s liability claim relating to proof of a product defect with case examples. The relationship of price with the competing issues related to the manufacture of patented and generic drugs is an under-researched area of products liability law. Therefore, this study seeks to remedy these issues by drawing together information relating to price, product defects and damages when defective products cause injury to the consumer [1].

Pressures to gain maximum profit from the manufacturing and marketing of a drug and carelessness regarding compliance with safety standards have led to several major product liability cases in the US and to ‘abandoning the dual mission of social corporate responsibility to both help patients and make a profit in favour of a mission to maximize profits at any cost’.

The pharmaceutical industry will no doubt continue to grow, and sadly so will the potential of product liability claims, as more prescription and generic drugs are created to combat disease. In this context, pharmaceutical companies have a critical responsibility to manufacture and market their drugs properly, to fully educate consumers as to safety, and to conduct thorough testing of their drugs for any harmful side effects. If a drug is found to be harmful or to exhibit significant negative side effects, it is incumbent upon the manufacturer to promptly alert the public, and more specifically, all patients who may be identified as having taken the drug. Without proper information and patient education, the lives of patients are clearly at risk.

With FDA approving over 700 generics during 2017, it seems as if the shift may already be coming in the movement towards more affordable healthcare – at least in the pharmaceutical industry. However, in an increasing era of deregulation, there may be even more pressure to approve generics before all of the implications have been fully explored.

Conflict of interest
The authors of the research paper [1] did not provide any conflict of interest statement. 

Abstracted by Richard J Hunter, Jr Professor of Legal Studies, Seton Hall University, New Jersey, USA.

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FDA’s labelling proposal will increase cost of generics

1. McCarthy K, Hunter RJ. Issues relating to pharmaceuticals in the United States: pricing, generics, products liability and social responsibility. Int J Res Manag, Econ Com. 2017;7(12):116-23.
2. GaBI Online - Generics and Biosimilars Initiative. Generics manufacturers do not have to change drug safety labels in the US [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Mar 30]. Available from: www.gabionline.net/Generics/News/Generics-manufacturers-do-not-have-to-change-drug-safety-labels-in-the-US
3. GaBI Online - Generics and Biosimilars Initiative. Generic pre-emption raises its ugly head again [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Mar 30]. Available from: www.gabionline.net/Policies-Legislation/Generic-pre-emption-raises-its-ugly-head-again
4. GaBI Online - Generics and Biosimilars Initiative. FDA to allow generics makers to change labelling [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Mar 30]. Available from: www.gabionline.net/Policies-Legislation/FDA-to-allow-generics-makers-to-change-labelling
5. GaBI Online - Generics and Biosimilars Initiative. FDA defends generics labelling proposal [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2018 Mar 30]. Available from: www.gabionline.net/Generics/General/FDA-defends-generics-labelling-proposal

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