Daily Blast March 9, 2016

The Court of Appeal, Fourth Appellate District, Division One (San Diego), published its opinion in T.H. v. Novartis Pharmaceuticals Corp. (Mar. 9, 2016, D067839) __ Cal.App.4th __, analyzing whether defendant Novartis Pharmaceuticals Corporation (“Novartis”), a former manufacturer of a brand-name asthma medication, can be liable in negligence for neurological injuries allegedly sustained by twin minors in utero after their mother was prescribed and consumed a generic form of the medication nearly six years after Novartis sold its interests in the medication. (Slip opn., p. 2.) The court concluded that “the minors demonstrated they can amend their complaint to state a claim under California law for negligent failure to warn and negligent misrepresentation based on acts or omissions by Novartis prior to 2001, which allegedly caused or contributed to the minors’ injuries in 2007.” (Ibid.)

The minors alleged that Novartis knew or should have known physicians prescribed its asthma medication to pregnant women for the off-label purpose of preventing or inhibiting preterm labor. (Slip opn., p. 2.) The minors alleged that studies available to Novartis before it sold the rights to its brand-name product in 2001 showed the drug was not effective for inhibiting preterm labor and could interfere with fetal development. The minors contended that Novartis had a duty to revise the label warnings while it still owned the drug to indicate a risk to fetal development and its failure to do so contributed to their injuries years later. (Ibid.) The minors sued several defendants, including Novartis, for negligence, intentional misrepresentation, concealment and negligent misrepresentation. (Id. at p. 9.) The trial court sustained Novartis’s demurrer without leave to amend finding that Novartis had no responsibility for the label or prescribing information in 2007 since it sold the rights six years earlier. (Id. at pp. 9-10.)

The Court of Appeal reversed. The court relied upon Conte v. Wyeth, Inc. (2008) 168 Cal.App.4th 89 (“Conte”), “which applied common law principles of duty and foreseeability to conclude a brand-name pharmaceutical manufacturer should ‘shoulder its share of responsibility for injuries caused, at least in part by its negligent . . . dissemination of inaccurate information’ even though the patient consumed a generic version of the medication manufactured by another company.” (Id. at pp. 103, 109-110.) The minors alleged there was sufficient information prior to 2001 regarding the risk of fetal harm to require Novartis to revise the drug label. The minors also alleged they were injured as a result of their mother’s ingestion of the generic version of the drug, which allegedly bore the same label information in 2007 as it did in 2001. They alleged it was foreseeable that physicians and their patients would continue to rely on Novartis’s product label for adequate warnings. They further alleged it was foreseeable a subsequent manufacturer would not change the label information. (Slip opn., p. 19.) According to the court, these allegations were sufficient to establish foreseeability and a connection between the alleged injuries and the harm. (Id. at pp. 19-20.) Further, if Novartis knew or should have known about fetal risk associated with tocolytic use and failed to disclose the risk while it owned the new drug application (NDA), Novartis’s moral culpability was not lessened simply because it no longer owned the NDA when the minors were allegedly harmed by their mother’s ingestion of the generic form of the medication, particularly since the label allegedly was the same as that prepared by Novartis. (Id. at p. 20.)

The court also rejected Novartis’s contention that Conte is no longer viable after O’Neil v. Crane Co. (2012) 53 Cal.4th 335, 342 (“O’Neil”), which held a pipe and valve manufacturer may not be held liable in strict liability or negligence for harm caused by separate products manufactured by other companies, even if those products were used in conjunction with the pipes and valves. (Slip opn., p. 2.) Even if a product liability analysis could apply, the court determined that the facts alleged fell within an exception recognized by the Supreme Court for harm to which the defendant’s product substantially contributed. (Ibid.)