Categories: FDA

Two cases decided over the last three months have added California[1] and Massachusetts[2] to the list of minority states that hold brand name manufacturers of drugs (“Brand Manufacturers”) liable under state “failure to warn” laws when sued by patients that exclusively used a generic version of the Brand Manufacturer’s drug.  These cases follow the US Supreme Court decision in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) (“PLIVA”), which held that generic drug manufacturers cannot be held liable for failure to update the safety label of a drug or biologic in violation of state “failure to warn” tort law since regulations from the U.S. Food and Drug Administration (“FDA”) prohibit generic manufacturers from unilaterally updating a generic drug’s label.  Following PLIVA, the FDA proposed a rule entitled, “Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products” (“Proposed Rule”) meant to allow generic drug or biologic manufacturers (“Generic Manufacturers”), under certain circumstances, to update safety labels without the requirement that the label match the label of the Brand Manufacturer.  The Proposed Rule also would have required Generic Manufacturers in certain circumstances to collect post-market safety information.  However, after twice delaying publication of a final rule, the FDA withdrew its Proposed Rule last year.   Now that the Proposed Rule has been withdrawn, manufacturers holding New Drug Applications or Biological License Applications (collectively herein, “NDAs”) for the drugs or biologics they manufacture are faced with increased uncertainty with regard to the application of state “failure-to-warn” duties and liabilities, especially in light of the recent decisions by the California  and Massachusetts supreme courts.

The Evolution (or lack thereof) of Failure to Warn Cases

PLIVA held that Generic Manufacturers have only “an ongoing federal duty of ‘sameness’” meaning that a Generic Manufacturer is required only to keep its warning label identical to the Brand Manufacturer’s.  However, PLIVA left the determination of whether Brand Manufacturers would be liable under the same laws up to each state to decide.  Most state courts have not imposed a duty to warn onto Brand Manufacturers when the injury stems from the exclusive use of a generic drug.   However, two recent cases in California and Massachusetts have expanded the number of minority-view states.

While following PLIVA, the California Supreme Court’s decision in T.H. v. Novartis Pharmaceuticals Corp., 4 Ca. 5th 145 (Cal. Dec. 21, 2017) (“Novartis”) in many ways is an extension of Conte v. Wyeth, Inc., 168 Cal.App.4th 89, 94 (2008) (“Conte”), a decision that pre-dates PLIVA.  Conte was the first case to hold that Brand Manufacturers owe a duty of care to patients whose “doctors foreseeably rely on the name-brand manufacturer’s product information when prescribing a medication, even if the prescription is filled with a generic version of the prescribed drug.”  Novartis held that “a brand-name drug manufacturer owes a duty of reasonable care in ensuring that the label includes appropriate warnings, regardless of whether the end user has been dispensed the brand-name drug or its generic bioequivalent.”  The majority’s decision applied factors that focused on foreseeability and public policy justifications for (or against) carving out exceptions to the general duty to warn.  Ultimately, noting that California places greater emphasis on foreseeability than other states when determining whether to obligate a party as having a duty, the Court held that Brand Manufacturers have a duty and “can be liable for the effects of its deficient warning label, despite transferring the NDA to a successor, if the harm is reasonably foreseeable and is proximately caused by the label."   The Court stated that the federal requirement to revise “a warning as soon as there is reasonable evidence of an association of a serious hazard with a drug” without needing causal proof under 21 C.F.R. § 201.80(e) created a “continuing duty to warn of potential risks.”  The decision was not without controversy mostly because the Court held that the Brand Manufacturer was still duty-bound despite divesting itself from ownership and control of the NDA.

The dissent in Novartis noted that “predecessor liability for failure to warn has never before been recognized by any court, in any jurisdiction” and that two prior decisions, In re Darvocet, Darovan and Propoxyphene Products Liability Litigation, 2012 WL 767595 (E.D.Ky. Mar. 7, 2012) and Lyman v. Pfizer, No. 2:09-cv-262 (D.Vt. July 20, 2012), each rejected predecessor liability as the original manufacturer’s “failure to warn” would be too remote to establish proximate cause of the injury.  In terms of transferring the duty through divestment, the dissent noted that “[t]here is no logical stopping point” for this broad and continuing duty for Brand Manufacturers.   The majority’s opinion offers no guideposts as to when divestment is sufficient to cease liability or at what time interval the predecessor is relieved of this duty.

The Massachusetts Supreme Court struggled with when to impose the duty to warn on a Brand Manufacturer in its recent opinion in Rafferty v. Merck & Co, Inc., 479 Mass. 141 (Mar. 16, 2018) (“Merck”).  While following PLIVA’s strict guidance that Generic Manufacturers cannot be held accountable under failure to warn laws where the Generic Manufacturer has adhered to the “duty of sameness,” the Court found that “public policy is not served if generic drug consumers have no remedy for the failure of a [Brand Manufacturer] to warn in cases where such failure exceeds ordinary negligence.”  However, rather than impose a duty under the plaintiff-friendly negligence standard, the Court held that a Brand Manufacturer’s duty is “the duty not to intentionally or recklessly cause harm to others.”  The court reasoned “that allowing a generic drug consumer to bring a general negligence claim for failure to warn against a brand-name manufacturer poses too great a risk of chilling drug innovation, contrary to the public policy goals embodied in the Hatch-Waxman amendments.”  After establishing this new standard, the Court permitted the plaintiff to amend his complaint to add “a common-law recklessness claim” if the plaintiff could allege that the Brand Manufacturer “intentionally failed to update the label on its drug, knowing or having reason to know of an unreasonable risk of death or grave bodily injury associated with its use.”

Perhaps in response to Novartis, the Court described its holding as applying to a Brand Manufacturer “that controls the contents of the label on a generic drug,” though no additional guidance was provided on the issue of predecessor liability.  By choosing a recklessness standard, Massachusetts becomes the first “middle ground” state on the issue: while becoming a minority state in terms of finding a duty to warn for Brand Manufacturers under the circumstances, it is also “the only court to limit the scope of liability arising under this duty to reckless disregard of the risk of death or grave bodily injury.”

The Federal Regulatory Landscape

FDA regulations require a Brand Manufacturer to obtain FDA approval of all labeling and to update the label of its drug “as soon as there is reasonable evidence of an association of a serious hazard with a drug; a causal relationship need not have been proved.”  The FDA allows the company that holds an NDA to submit a "Changes Being Effected" supplement or “CBE-0” which allows Brand Manufacturers to unilaterally update their labels immediately upon receipt by the FDA of the supplement, under certain circumstances, including strengthening a safety label or adding additional warnings.

However, as the PLIVA decision made clear, this requirement falls squarely on the shoulders of the NDA holder and does not pass onto Generic Manufacturers.  Instead, Generic Manufacturers, under PLIVA, must maintain a duty of “sameness”.  As a result, a Generic Manufacturer may not unilaterally update the drug’s label if the update will cause the label to be different from the brand name drug’s label.  The FDA originally enacted this requirement as part of the Hatch-Waxman Act  to assure prescribers that the generic drug is bioequivalent to the brand name drug, thereby encouraging the use of generic drugs.  However, the Proposed Rule indicates that the FDA was considering changing its position on the issue.

Under the Proposed Rule, a Generic Manufacturer would have had the ability to unilaterally change its drug’s label under CBE-0.  Additionally, a Generic Manufacturer would have been able to send a “Dear Health Care Provider” letter describing the reasons for the change in an effort to disseminate urgent information regarding the drug’s safety, dosage, administration, or efficacy information.  Unfortunately, after extending a public comment period and hosting a Public Hearing to discuss the Proposed Rule, the FDA  withdrew the rule on September 29, 2017.  This decision leaves states in the precarious position of trying to balance the rights of Brand Manufacturers and clients of Generic Manufacturers, as well as traditional theories of tort liability, as the Merck decision clearly demonstrates.   The dissent in the Novartis decision specifically discussed the Proposed Rule and how a final rule on the issue would likely have altered the Court’s analysis and changed its decision.


In the wake of these cases, only one thing is clear: state courts continue to struggle with how to apply the federal preemption of liability for Generic Manufacturers from state failure to warn liability under PLIVA.  Even where states have adopted liability for Brand Manufacturers, additional questions persist.  The Novartis decision creates no clear line of when a Brand Manufacturer’s liability evaporates through the passage of time or divestment from an NDA.  The Merck decision sets out a new standard without applying it.  This leaves Brand Manufacturers with few answers when determining whether to expand their monitoring activities and determining how aggressive to be in filing for a CBE-0 for products the Brand Manufacturer may no longer manufacture or own.

[1] T.H. v. Novartis Pharmaceuticals Corp.  4 Cal. 5th 145 (Dec. 21, 2017)

[2] Rafferty v. Merck & Co, 479 Mass. 141 (Mar. 16, 2018)

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