Iowa Supreme Court Rules That Brand Name Drug Manufacturers Are Not Liable For Injuries Caused By Generic Equivalents

By harley erbe

021749 Doctor Gp Medical Hospital Stethoscope Generic

On July 11, 2014, the Iowa Supreme Court issued a decision in Theresa Huck v. Wyeth, Inc. that follows the trend throughout the country prohibiting lawsuits against name brand drug manufacturers for injuries or death caused by a generic version of the drug manufactured by a different company. The plaintiffs in Huck sued under a products liability theory for personal injuries. The prescription drug was a generic version; regardless, the plaintiffs sued both the manufacturer of the generic drug as well as the original name brand manufacturer. The plaintiff had never taken the name brand version of the drug; consequently, one of the issues in the case was whether a name brand drug manufacturer could be liable for injuries caused by the use of a generic version of the drug that it did not make. The Iowa Supreme Court's answer was no. 

The court relied on a well-settled aspect of Iowa products liability law law—The plaintiff must prove an injury caused by a product sold or supplied by the defendant. The court believed that this long-standing "product identification" requirement bars an injured plaintiff’s recovery from the manufacturers of a drug brand that the plaintiff never used. Thus, under Iowa law drug manufacturers only owe duties to those harmed by use of their products. The court declined to change Iowa law to impose a new duty on drug manufacturers to those who never used their products and were instead harmed by use of a competitor’s generic product. 

In short, a name brand drug manufacturer does not owe a duty to a consumer unless the consumer actually used the brand manufacturer’s product. Brand manufacturers are not liable for injuries caused by a generic version of the drug. Plaintiffs seeking recovery for the side effects of a prescription drug who sue a pharmaceutical company must prove they were injured by using the prescription drug manufactured or supplied by that defendant.

Why is this the case? There are a few reasons. First, as noted above, there's the standard rule that manufacturers are only responsible for injuries caused by their own products. Second, brand-name manufacturers’ warnings and representations do not create a basis for liability to consumers of competitors’ products because brand-name manufacturers only intend to communicate with their customers, not the customers of their competitors. Finally, public policy considerations weigh against holding name-brand competitors liable for injuries caused by their generic competitor’s drug.

The public policy concerns seem to be a major factor in this analysis. Due to the unique nature of the relationship between generic and brand manufacturers, to expand liability to those who did not make or supply the injury-causing product used by the plaintiff involves policy choices and social engineering more appropriate for the legislature. Congress has created a symbiotic relationship between brand and generic drug manufacturers. In this relationship, name brand manufacturers undertake the expense of developing pioneer drugs, performing the studies necessary to obtain premarketing approval, and formulating labeling information. Generic manufacturers avoid these expenses by duplicating successful pioneer drugs and their labels. Name brand advertising benefits generic competitors because generics are generally sold as substitutes for name brand drugs, so the more a name brand drug is prescribed, the more potential sales exist for its generic equivalents. As between these competing pharmaceutical companies, it would be unfair to find brand manufacturers have a duty to those who take generic drugs when the generic manufacturer reaps the benefits of the name brand manufacturer’s statements by copying its labels and riding on the coattails of its advertising.” Congress has thus made policy choices that impact the economics of prescription drug sales to increase access to medication. 

The Iowa Supreme Court was also concerned that imposing liability on brand-name drug manufacturers even though a consumer wasn't injured by the name brand version would alter the relationship between generic and brand manufacturers. Extending liability to brand manufacturers for harm caused by generic competitors would discourage investments necessary to develop new, beneficial drugs by increasing the downside risks for the brand manufacturers. A brand manufacturer cannot ensure that a generic manufacturer complies with federal law. Brand name drug manufacturers do not place the generic product in commerce, have no ability to control the quality of the product or the conformance of the product with its design, and do not have the opportunity to treat the risk of producing the product as a cost of production against which liability insurance can be obtained.

By Harley Erbe

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