T.H. v. Novartis Pharmaceuticals Corporation
226 Cal. Rptr. 3d 336
Cal.2017Background
- Plaintiffs are twins who allege in utero exposure (2007) to generic terbutaline caused severe neurodevelopmental injury; their mother was prescribed generic terbutaline (bioequivalent to brand Brethine).
- Novartis previously owned the NDA for brand Brethine and manufactured it until 2001, when it transferred the NDA to aaiPharma; the generic label is required by federal law to match the brand-name label.
- Plaintiffs allege Novartis knew or should have known of risks to fetal brain development and failed to update Brethine’s warning label, and that the deficient brand label was reproduced on generics leading to the prescription and injury.
- Federal law gives brand NDA holders the unilateral ability to change/strengthen warnings (CBE), while generic manufacturers must maintain “sameness”; PLIVA preempts state claims against generics but not brands.
- Trial court sustained Novartis’s demurrer without leave to amend; Court of Appeal reversed and granted leave to amend negligence and negligent misrepresentation claims; California Supreme Court affirmed the Court of Appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a brand-name manufacturer owes warning-duty to consumers of generic bioequivalents | Brand duty extends to those foreseeably harmed when physicians rely on brand label that generics must copy | No duty because injured persons received generics Novartis did not manufacture | Yes — brand manufacturers owe duty to warn those foreseeably harmed by a deficient brand label that generics replicate |
| Whether brand duty continues to injuries occurring after divestiture of NDA | Novartis can be liable for injuries after sale if its pre-sale deficient label foreseeably proximately caused harm | Sale of NDA terminated Novartis’s responsibility and breaks causal chain | No per se bar: sale does not automatically extinguish liability; duty may survive where pre-sale label deficiency foreseeably caused later harm |
| Viability of negligent misrepresentation theory (Restatement §311) against brand for physical harm | Brand’s misrepresentations in label foreseeably put third parties at risk via physician reliance and generic sameness | Misrep claim effectively imposes product-liability against non-manufacturer and lacks requisite relationship | Court accepts negligent misrepresentation can apply where misrepresentation foreseeably causes physical harm (consistent with Randi W.) |
| Preemption and allocation of responsibility between brand and generic manufacturers | State law should hold brand accountable because federal scheme vests label control in brand | Imposing duty expands liability, chills innovation, causes overwarning, and unfairly burdens brands post-divestiture | Court finds no federal preemption of state claims against brands (PLIVA preempts generics only) and policy factors weigh in favor of recognizing duty against brands in limited circumstances |
Key Cases Cited
- Stevens v. Parke, Davis & Co., 9 Cal.3d 51 (Cal. 1973) (brand manufacturer duty to warn physicians of known risks)
- Wyeth v. Levine, 555 U.S. 555 (U.S. 2009) (brand NDA-holder bears primary responsibility for postmarketing label changes; CBE rule explained)
- PLIVA, Inc. v. Mensing, 564 U.S. 604 (U.S. 2011) (federal duty of sameness preempts state failure-to-warn claims against generic manufacturers)
- Conte v. Wyeth, Inc., 168 Cal.App.4th 89 (Cal. Ct. App. 2008) (recognized warning-label liability to consumers of generics whose physicians relied on brand labeling)
- O’Neil v. Crane Co., 53 Cal.4th 335 (Cal. 2012) (limits on imposing duty to warn about other manufacturers’ products; foreseeability alone insufficient)
- Carlin v. Superior Court, 13 Cal.4th 1104 (Cal. 1996) (manufacturer’s duty is to warn prescribing physicians of known risks)
- Kesner v. Superior Court, 1 Cal.5th 1132 (Cal. 2016) (Rowland factors and foreseeability are central to duty analysis)
- Rowland v. Christian, 69 Cal.2d 108 (Cal. 1968) (factors for determining duty of care)
- Randi W. v. Muroc Joint Unified School Dist., 14 Cal.4th 1066 (Cal. 1997) (negligent misrepresentation may create duty to third parties who did not receive the information)
- Centinela Freeman Emergency Medical Assocs. v. Health Net of California, Inc., 1 Cal.5th 994 (Cal. 2016) (delegation of legal obligations does not automatically extinguish duty where foreseeability and knowledge of delegate’s inability exist)