You Didn’t Make That, But: Pfizer Can Be Sued For Injury Caused By Generic Knockoff

Here is a court ruling that is going to rile brand-name drugmakers. Late last week, the Alabama Supreme Court ruled that Pfizer (PFE) can be sued by a man who claimed he was injured by a generic version of its Reglan heartburn medicine, because the brand-name drugmaker purportedly failed to warn his physician about the risks.

This is one of the few instances in which a court has found that a brand-name drugmaker can be sued even though a consumer had taken only a generic, suggesting that consumers will be encouraged to file still more such lawsuits, especially in the wake of a 2011 ruling by the US Supreme Court that has limited claims against generic drugmakers.

In that ruling, the US Supreme Court decided that generic drugmakers are not required to strengthen labeling if alerted to side effects, even when the same change has not been to the labeling for the branded medication. The decision has meant that generic drugmakers cannot be sued for not alerting patients to such risks (reported earlier in Pharma news). Pfizer, meanwhile, already faces many lawsuits over Reglan warnngs.

Pfizer, like other major pharmaceutical companies, is struggling to generate revenue growth as patents expire on existing drugs and company labs fail to produce enough new drugs. Losing the revenue to generic manufacturers, but retaining the liability, would be especially galling to drugmakers.

PFE Revenue TTM Chart

PFE Revenue TTM data by YCharts

In the Alabama case, Danny Weeks took Reglan and developed tardive dyskinesia, which causes incurable and involuntary muscle movements. Although he took only generics, Weeks accused Wyeth, which sold Reglan and is now owned by Pfizer, and two generic drugmakers – Teva Pharmaceuticals (TEVA) and Actavis – of failing to warn of the risk of long-term use.

At issue was whether Weeks could press his lawsuit against Pfizer, a question that a federal court asked the Alabama Supreme Court to decide. In its ruling, the Alabama court wrote that “an omission or defect in the labeling for the brand-name drug would necessarily be repeated in the generic labeling, foreseeably causing harm to a patient who ingested the generic product.”

“…In the context of inadequate warnings by the brand-name manufacturer placed on a prescription drug manufactured by a generic-drug manufacturer, it is not fundamentally unfair to hold the brand-name manufacturer liable for warnings on a product it did not produce because the manufacturing process is irrelevant to misrepresentation theories based, not on manufacturing defects in the product itself, but on information and warning deficiencies, when those alleged misrepresentations were drafted by the brand-name manufacturer and merely repeated by the generic manufacturer,” the court wrote (here is the ruling).

This is not a product liability claim. In a note to us, Lew Garrison, one of the attorneys who represents Weeks, explained that Alabama law allows what is called third party fraud. This means that a third party defrauded by another party, which knew the victim would rely on the representations made to the party, has a claim.

He adds that the notion of the so-called learned intermediary was in play. This refers to the need to inform a physician of the risks of a drug. And so, under Alabama law, “if the warning to the physician is adequate, then it is presumed that the physician warned the patient,” he writes.

“Third party fraud here is when Pfizer suppressed information about the risks of Reglan that it knew existed from the prescribing physician, which, if revealed, could have prevented the physician from prescribing the drug to our client. Since Pfizer had no duty to warn our client, and its duty was to the prescribing doctor, it follows that any fraud perpetrated on the physician would necessarily flow to our client,” he writes.

This is not the first time that such a ruling has been made among the many lawsuits filed over Reglan warnings. In California, an appeals court issued such a finding in late 2008 (covered in earlier Pharma news) and a Vermont court also made a similar decision two years. For those interested, Drug and Device Law has kept a scorecard on these cases overall.

A Pfizer spokesman writes us that the ruling is relevant only to Alabama, the decision does not reflect the merits of the case and all four US Courts of Appeals to address the issue have rejected the assertion that brand-name drugmakers can be held liable for injuries caused by a consumer who took a generic version of Reglan.

To read the remainder of this article, go to Pharmalot.

Ed Silverman, a contributing editor of YCharts, is the founder and editor of Pharmalot. He previously reported on the pharmaceutical industry and other business topics for the Star-Ledger of New Jersey, New York Newsday and Investor’s Business Daily. He can be reached at editor@ycharts.com.

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