On March 16, 2018, Massachusetts joined a growing minority of states — California, Vermont and Illinois — recognizing innovator liability of name-brand drug manufacturers. Rafferty v. Merck & Co., Inc., SJC-12347, 2018 WL 1354064 (Mass.). Innovator liability is a theory used by plaintiffs to hold name-brand manufacturers liable for injuries caused by generic drugs that these manufacturers did not make.
Plaintiffs argue that name-brand manufacturers should be liable because it is foreseeable that a generic drug manufacturer will use the labeling of the name-brand manufacturer, as is required by the federal regulatory framework applicable to prescription drug labeling. See 21 U.S.C. § 355(j)(2)(A). They add that generic drug users’ only remedy is against name-brand manufacturers after the United States Supreme Court held that state law failure to warn and design defect claims against generic drug manufacturers are preempted by federal law. See PLIVA, Inc. v. Mensing, 564 U.S. 604, 131 S. Ct. 2567, 2570, 180 L. Ed. 2d 580 (2011); Mut. Pharm. Co. v. Bartlett, 570 U.S. 472, 133 S. Ct. 2466, 186 L. Ed. 2d 607 (2013).
For decades, the overwhelming majority of courts have rejected the idea that a name-brand manufacturer could be held liable for a drug that it did not make. However, the Massachusetts Supreme Court is now the second state high court to recognize innovator liability in less than three months. In December 2017, the California Supreme Court not only affirmed California’s acceptance of innovator liability, but it greatly expanded the theory to include predecessor liability in T.H. v. Novartis Pharm. Corp., 4 Cal. 5th 145, 407 P.3d 18 (2017). Relying on the regulatory scheme described above, the Court held that a name-brand manufacturer owes the ordinary duty of care to users of generic drugs regardless of who made the drug. The Court then went further than any other state and held, in a split decision, that the name-brand manufacturer’s duty extends years after the company has sold the rights to its drug and stopped selling it.
In Rafferty, the Massachusetts Supreme Court recognized a much narrower version of innovator liability. The Court held, “a brand-name drug manufacturer that controls the contents of a label on a generic drug owes a duty to consumers of that generic drug not to act in reckless disregard of an unreasonable risk of death or grave bodily injury.” The Court rejected innovator liability based in negligence, recognizing its chilling effect on drug innovation. However, the Court could not see past the argument that if it declined to impose liability on name-brand manufacturers, generic drug users would have limited remedies. The Court concluded, “although we may be willing in certain circumstances to excuse ordinary negligence, we will not tolerate the reckless disregard of the safety of others.” The case was remanded for the trial court to determine whether the plaintiff could allege sufficient facts to support a finding of recklessness.
Name-brand drug manufacturers should continue to watch for the spread of innovator liability and consult with counsel as to the different forms it might take. Innovator liability has already reached another state high court – West Virginia. McNair v. Johnson & Johnson, 694 F. App’x 115 (4th Cir. 2017), certified question accepted (Sept. 1, 2017). A decision is expected sometime this year. Additionally, Illinois’ adoption of innovator liability is on appeal to the Seventh Circuit. Dolin v. GlaxoSmithKline LLC, 269 F. Supp. 3d 851 (N.D. Ill. 2017).