Opinion ID: 1377843
Heading Depth: 3
Heading Rank: 2

Heading: Strict Liability and Prescription Drugs

Text: Even before Greenman was decided, the members of the American Law Institute, in considering whether to adopt a rule of strict liability, pondered whether the manufacturer of a prescription drug should be subject to the doctrine. (38 A.L.I Proc. 19, 90-92, 98 (1961).) During a rather confusing discussion of a draft of what was to become section 402A, a member of the institute proposed that drugs should be exempted from strict liability on the ground that it would be against the public interest to apply the doctrine to such products because of the very serious tendency to stifle medical research and testing. Dean Prosser, who was the reporter for the Restatement Second of Torts, responded that the problem was a real one, and that he had it in mind in drafting section 402A. A motion to exempt prescription drugs from the section was defeated on the suggestion of Dean Prosser that the problem could be dealt with in the comments to the section. [2] However, a motion to state the exemption in a comment was also defeated. (38 A.L.I. Proc. 19, 90-98, supra. ) At the next meeting of the institute in 1962, section 402A was approved together with comment k thereto. (41 A.L.I. Proc. 227, 244 (1962).) The comment provides that the producer of a properly manufactured prescription drug may be held liable for injuries caused by the product only if it was not accompanied by a warning of dangers that the manufacturer knew or should have known about. It declares:  k. Unavoidably unsafe products. [3] There are some products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. These are especially common in the field of drugs. An outstanding example is the vaccine for the Pasteur treatment of rabies, which not uncommonly leads to very serious and damaging consequences when it is injected. Since the disease itself invariably leads to a dreadful death, both the marketing and use of the vaccine are fully justified, notwithstanding the unavoidable high degree of risk which they involve. Such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous. The same is true of many other drugs, vaccines, and the like, many of which for this very reason cannot legally be sold except to physicians, or under the prescription of a physician. It is also true in particular of many new or experimental drugs as to which, because of lack of time and opportunity for sufficient medical experience, there can be no assurance of safety, or perhaps even of purity of ingredients, but such experience as there is justifies the marketing and use of the drug notwithstanding a medically recognizable risk. The seller of such products, again with the qualification that they are properly prepared and marketed, and proper warning is given, where the situation calls for it, is not to be held to strict liability for unfortunate consequences attending their use, merely because he has undertaken to supply the public with an apparently useful and desirable product, attended with a known but apparently reasonable risk. Comment k has been analyzed and criticized by numerous commentators. While there is some disagreement as to its scope and meaning, there is a general consensus that, although it purports to explain the strict liability doctrine, in fact the principle it states is based on negligence. (E.g., Schwartz, Unavoidably Unsafe Products: Clarifying the Meaning and Policy Behind Comment K (1985) 42 Wash. & Lee L.Rev. 1139, 1141; McClellan, Drug Induced Injury (1978) 25 Wayne L.Rev. 1, 2; Kidwell, The Duty to Warn: A Description of the Model of Decision (1975) 53 Tex.L.Rev. 1375, 1377-1378; Merrill, Compensation for Prescription Drug Injuries (1973) 59 Va.L.Rev. 1, 50.) That is, comment k would impose liability on a drug manufacturer only if it failed to warn of a defect of which it either knew or should have known. This concept focuses not on a deficiency in the product  the hallmark of strict liability  but on the fault of the producer in failing to warn of dangers inherent in the use of its product that were either known or knowable  an idea which rings of negligence, in the words of Cronin, supra, 8 Cal.3d 121, 132. [4] Comment k has been adopted in the overwhelming majority of jurisdictions that have considered the matter. (E.g., DeLuryea v. Winthrop Laboratories, etc. (8th Cir.1983) 697 F.2d 222, 228-229; Basko v. Sterling Drug, Inc. (9th Cir.1969) 416 F.2d 417, 425-426; Stone v. Smith, Kline & French Lab. (Ala. 1984) 447 So.2d 1301, 1303-1304; Gaston v. Hunter (1978) 121 Ariz. 33 [588 P.2d 326, 338-341]; Chambers v. G.D. Searle & Co. (D.Md. 1975) 441 F. Supp. 377, 380-381; Johnson v. American Cyanamid Co. (1986) 239 Kan. 279 [718 P.2d 1318, 1323].) In California, several decisions of the Courts of Appeal have embraced the comment k exemption ( Carmichael v. Reitz (1971) 17 Cal. App.3d 958, 988-989 [95 Cal. Rptr. 381]; Christofferson v. Kaiser Foundation Hospitals (1971) 15 Cal. App.3d 75, 79-80 [92 Cal. Rptr. 825, 53 A.L.R.3d 292]; Toole v. Richardson-Merrell Inc. (1967) 251 Cal. App.2d 689, 708-711 [60 Cal. Rptr. 398, 29 A.L.R.3d 988]), but this court has never spoken to the issue. [5] We are aware of only one decision that has applied the doctrine of strict liability to prescription drugs. ( Brochu v. Ortho Pharmaceutical Corp. (1st Cir.1981) 642 F.2d 652, 654-657.) [6] Most cases have embraced the rule of comment k without detailed analysis of its language. A few, notably Kearl v. Lederle Laboratories, supra, 172 Cal. App.3d 812 (hereafter Kearl ), have conditioned application of the exemption stated therein on a finding that the drug involved is in fact unavoidably dangerous, reasoning that the comment was intended to exempt only such drugs from strict liability. (Accord, Toner v. Lederle Laboratories (1987) 112 Idaho 328 [732 P.2d 297, 303-309]; see also Feldman v. Lederle Laboratories (1984) 97 N.J. 429 [479 A.2d 374, 382-383] [involving allegations of a failure to warn, but stating that whether a drug is unavoidably unsafe should be decided on a case-by-case basis.].) And in Collins v. Eli Lilly Co. (1984) 116 Wis.2d 166 [342 N.W.2d. 37, 52], it was held that comment k was applicable only if the drug in question was placed on the market without adequate testing because of exigent circumstances. [7] We appear, then, to have three distinct choices: (1) to hold that the manufacturer of a prescription drug is strictly liable for a defect in its product because it was defectively designed, as that term is defined in Barker, or because of a failure to warn of its dangerous propensities even though such dangers were neither known nor scientifically knowable at the time of distribution; [8] (2) to determine that liability attaches only if a manufacturer fails to warn of dangerous propensities of which it was or should have been aware, in conformity with comment k; or (3) to decide, like Kearl and Toner v. Lederle Laboratories, supra, 732 P.2d 297, 303-309, that strict liability for design defects should apply to prescription drugs unless the particular drug which caused the injury is found to be unavoidably dangerous. We shall conclude that (1) a drug manufucturer's liability for a defectively designed drug should not be measured by the standards of strict liability; (2) because of the public interest in the development, availability, and reasonable price of drugs, the appropriate test for determining responsibility is the test stated in comment k; and (3) for these same reasons of policy, we disapprove the holding of Kearl that only those prescription drugs found to be unavoidably dangerous should be measured by the comment k standard and that strict liability should apply to drugs that do not meet that description.
Barker, as we have seen, set forth two alternative tests to measure a design defect: first, whether the product performed as safely as the ordinary consumer would expect when used in an intended and reasonably foreseeable manner, and second, whether, on balance, the benefits of the challenged design outweighed the risk of danger inherent in the design. In making the latter determination, the jury may consider these factors: the gravity of the danger posed by the challenged design, the likelihood that such danger would occur, the mechanical feasibility of a safer alternative design, the financial cost of an improved design, and the adverse consequences to the product and to the consumer that would result from an alternative design. (20 Cal.3d at p. 431.) (2a) Defendants assert that neither of these tests is applicable to a prescription drug like DES. As to the consumer expectation standard, they claim, the consumer is not the plaintiff but the physician who prescribes the drug, and it is to him that the manufacturer's warnings are directed. A physician appreciates the fact that all prescription drugs involve inherent risks, known and unknown, and he does not expect that the drug is without such risks. We agree that the consumer expectation aspect of the Barker test is inappropriate to prescription drugs. (3) (See fn. 9.), (2b) While the ordinary consumer may have a reasonable expectation that a product such as a machine he purchases will operate safely when used as intended, a patient's expectations regarding the effects of such a drug are those related to him by his physician, to whom the manufacturer directs the warnings regarding the drug's properties. [9] The manufacturer cannot be held liable if it has provided appropriate warnings and the doctor fails in his duty to transmit these warnings to the patient or if the patient relies on inaccurate information from others regarding side effects of the drug. (4) The second test, which calls for the balancing of risks and benefits, is inapposite to prescription drugs, according to defendants, because it contemplates that a safer alternative design is feasible. While the defective equipment in Barker and other cases involving mechanical devices might be redesigned by the addition of safety devices, there is no possibility for an alternative design for a drug like DES, which is a scientific constant compounded in accordance with a required formula. (See Sindell, 26 Cal.3d at p. 605.) We agree with defendants that Barker contemplates a safer alternative design is possible, but we seriously doubt their claim that a drug like DES cannot be redesigned to make it safer. For example, plaintiff might be able to demonstrate at trial that a particular component of DES rendered it unsafe as a miscarriage preventative and that removal of that component would not have affected the efficacy of the drug. Even if the resulting product, without the damaging component, would bear a name other than DES, it would do no violence to semantics to view it as a redesign of DES. Or plaintiff might be able to prove that other, less harmful, drugs were available to prevent miscarriage; the benefit of such alternate drugs could be weighed against the advantages of DES in making the risk/benefit analysis of Barker. As the Court of Appeal observed, defendants' attempt to confine the issue to whether there is an alternative design for DES poses the problem in an unreasonably narrow fashion. (See Comment, The Failure to Warn Defect (1983) 17 U.S.F.L.Rev. 743, 755-762.) Of course, the fact that a drug with dangerous side effects may be characterized as containing a defect in design does not necessarily mean that its producer is to be held strictly liable for the defect. The determination of that issue depends on whether the public interest would be served by the imposition of such liability. As we have seen, the fundamental reasons underlying the imposition of strict liability are to deter manufacturers from marketing products that are unsafe, and to spread the cost of injury from the plaintiff to the consuming public, which will pay a higher price for the product to reflect the increased expense of insurance to the manufacturer resulting from its greater exposure to liability. These reasons could justify application of the doctrine to the manufacturers of prescription drugs. It is indisputable, as plaintiff contends, that the risk of injury from such drugs is unavoidable, that a consumer may be helpless to protect himself from serious harm caused by them, and that, like other products, the cost of insuring against strict liability can be passed on by the producer to the consumer who buys the item. Moreover, as we observe below, in some cases additional testing of drugs before they are marketed might reveal dangerous side effects, resulting in a safer product. But there is an important distinction between prescription drugs and other products such as construction machinery ( Barker; Pike v. Frank G. Hough Co. (1970) 2 Cal.3d 465 [85 Cal. Rptr. 629, 467 P.2d 229]), a lawn-mower ( Luque v. McLean (1972) 8 Cal.3d 136 [104 Cal. Rptr. 443, 501 P.2d 1163]), or perfume ( Moran v. Faberge, Inc. (1975) 273 Md. 538 [332 A.2d 11]), the producers of which were held strictly liable. In the latter cases, the product is used to make work easier or to provide pleasure, while in the former it may be necessary to alleviate pain and suffering or to sustain life. Moreover, unlike other important medical products (wheelchairs, for example), harm to some users from prescription drugs is unavoidable. Because of these distinctions, the broader public interest in the availability of drugs at an affordable price must be considered in deciding the appropriate standard of liability for injuries resulting from their use. Perhaps a drug might be made safer if it was withheld from the market until scientific skill and knowledge advanced to the point at which additional dangerous side effects would be revealed. But in most cases such a delay in marketing new drugs  added to the delay required to obtain approval for release of the product from the Food and Drug Administration  would not serve the public welfare. Public policy favors the development and marketing of beneficial new drugs, even though some risks, perhaps serious ones, might accompany their introduction, because drugs can save lives and reduce pain and suffering. If drug manufacturers were subject to strict liability, they might be reluctant to undertake research programs to develop some pharmaceuticals that would prove beneficial or to distribute others that are available to be marketed, because of the fear of large adverse monetary judgments. Further, the additional expense of insuring against such liability  assuming insurance would be available  and of research programs to reveal possible dangers not detectable by available scientific methods could place the cost of medication beyond the reach of those who need it most. Dean Prosser summed up the justification for exempting prescription drugs from strict liability as follows: The argument that industries producing potentially dangerous products should make good the harm, distribute it by liability insurance, and add the cost to the price of the product, encounters reason for pause, when we consider that two of the greatest medical boons to the human race, penicillin and cortisone, both have their dangerous side effects, and that drug companies might well have been deterred from producing and selling them. Thus far the courts have tended to hold the manufacturer to a high standard of care in preparing and testing drugs of unknown potentiality and in giving warning; but in the absence of evidence that this standard has not been met, they have refused to hold the maker liable for unforeseeable harm. (Prosser, Torts (4th ed. 1971) § 99, at p. 661, fns. omitted.) The possibility that the cost of insurance and of defending against lawsuits will diminish the availability and increase the price of pharmaceuticals is far from theoretical. Defendants cite a host of examples of products which have greatly increased in price or have been withdrawn or withheld from the market because of the fear that their producers would be held liable for large judgments. For example, according to defendant E.R. Squibb Sons, Inc., Benedictin, the only antinauseant drug available for pregnant women, was withdrawn from sale in 1983 because the cost of insurance almost equalled the entire income from sale of the drug. Before it was withdrawn, the price of Benedictin increased by over 300 percent. (132 Chemical Week (June 12, 1983) p. 14.) Drug manufacturers refused to supply a newly discovered vaccine for influenza on the ground that mass innoculation would subject them to enormous liability. The government therefore assumed the risk of lawsuits resulting from injuries caused by the vaccine. (Franklin & Mais, Tort Law and Mass Immunization Programs (1977) 65 Cal. L.Rev. 754, 769 et seq.; Feldman v. Lederle Laboratories (1983) 189 N.J. Super. 424 [460 A.2d 203, 209].) One producer of diphtheria-tetanus-pertussis vaccine withdrew from the market, giving as its reason extreme liability exposure, cost of litigation and the difficulty of continuing to obtain adequate insurance. (Hearing Before Subcom. on Health and the Environment of House Com. on Energy and Commerce on Vaccine Injury Compensation, 98th Cong., 2d Sess. (Sept. 10, 1984) p. 295.) There are only two manufacturers of the vaccine remaining in the market, and the cost of each dose rose a hundredfold from 11 cents in 1982 to $11.40 in 1986, $8 of which was for an insurance reserve. The price increase roughly paralleled an increase in the number of lawsuits from one in 1978 to 219 in 1985. (232 Science (June 13, 1986) p. 1339.) Finally, a manufacturer was unable to market a new drug for the treatment of vision problems because it could not obtain adequate liability insurance at a reasonable cost. (N.Y. Times (Oct. 14, 1986) p. 10.) There is no doubt that, from the public's standpoint, these are unfortunate consequences. And they occurred even though almost all jurisdictions follow the negligence standard of comment k. It is not unreasonable to conclude in these circumstances that the imposition of a harsher test for liability would not further the public interest in the development and availability of these important products. [10] We decline to hold, therefore, that a drug manufacturer's liability for injuries caused by the defective design of a prescription drug should be measured by the standard set forth in Barker.
(5) For these same reasons of policy, we reject plaintiff's assertion that a drug manufacturer should be held strictly liable for failure to warn of risks inherent in a drug even though it neither knew nor could have known by the application of scientific knowledge available at the time of distribution that the drug could produce the undesirable side effects suffered by the plaintiff. Numerous cases have recognized that a product may be defective because of the absence of a warning that was necessary to allow its safe use. (E.g., Dimond v. Caterpillar Tractor Co. (1976) 65 Cal. App.3d 173, 181, fn. 6. [134 Cal. Rptr. 895]; Bojorquez v. House of Toys, Inc. (1976) 62 Cal. App.3d 930, 933 [133 Cal. Rptr. 483]; Dosier v. Wilcox-Crittendon Co. (1975) 45 Cal. App.3d 74, 80-81 [119 Cal. Rptr. 135]; Barth v. B.F. Goodrich Tire Co. (1968) 265 Cal. App.2d 228, 244-245 [71 Cal. Rptr. 306]; Canifax v. Hercules Powder Co. (1965) 237 Cal. App.2d 44, 53-55 [46 Cal. Rptr. 552].) While some decisions apply strict liability principles to such a defect by holding that it is irrelevant whether the manufacturer knew of the danger or should have known of it (e.g., Halphen v. Johns-Manville Sales Corp. (La. 1986) 484 So.2d 110, 114; Elmore v. Owens-Illinois, Inc. (Mo. 1984) 673 S.W.2d 434, 438; Carrecter v. Colson Equipment Co. (1985) 346 Pa.Super. 95 [499 A.2d 326, 330-331]; Little v. PPG Industries, Inc., supra, 579 P.2d 940, 947; Haugen v. Minnesota Mining and Manufacturing Co. (1976) 15 Wn.App. 379 [550 P.2d 71, 76-77]), most jurisdictions hold to the contrary. That is, liability is conditioned on the actual or constructive knowledge of the risk by the manufacturer as of the time the product was sold or distributed. ( Basko v. Sterling Drug, Inc., supra, 416 F.2d 417, 426; Christofferson v. Kaiser Foundation Hospitals, supra, 15 Cal. App.3d 75, 79-80; Oakes v. E.I. Du Pont de Nemours & Co., Inc. (1969) 272 Cal. App.2d 645, 650-651 [77 Cal. Rptr. 709]; Woodill v. Parke Davis & Co. (1980) 79 Ill.2d 26 [37 Ill.Dec. 304, 402 N.E.2d. 194, 197-199]; Moore v. Vanderloo (Iowa 1986) 386 N.W.2d 108, 116; see Kearl, supra, 172 Cal. App.3d at p. 832; Kidwell, The Duty to Warn, supra, 53 Tex. L.Rev. 1375, 1395; Comment, Undiscoverable Product Defects (1983) 71 Geo. L.J. 1635, 1638-1639; note, The Liability of Pharmaceutical Manufacturers for Unforeseen Adverse Drug Reactions (1980) 48 Fordham L.Rev. 735, 752-753; and see cases collected in Annot. (1984) 33 A.L.R 4th 368.) This rule is consistent with comment j to section 402A, which confines the duty to warn to a situation in which the seller has knowledge, or by the application of reasonable, developed human skill and foresight should have knowledge of ... the danger. It has been said that to hold the manufacturer liable for failure to warn of a danger of which it would be impossible to know based on the present state of human knowledge would make the manufacturer the virtual insurer of the product.... ( Woodill v. Parke Davis & Co., supra, 402 N.E.2d 194, 199; accord, Leibowitz v. Ortho Pharmaceuticals Corp. (1973) 224 Pa.Super. 418 [307 A.2d 449, 458]; see Schwartz, The Post-Sale Duty to Warn: Two Unfortunate Forks in the Road to a Reasonable Doctrine (1983) 58 N.Y.U.L.Rev. 892, 894-905.) The likelihood of the producer's liability would increase with significant advances in scientific knowledge, discouraging the development of new and improved drugs to combat disease. Thus, we disagree with plaintiff's assertion that defendants should be held liable for failing to warn the physician who prescribed DES to plaintiff's mother of alleged defects in the drug that were neither known by defendants nor scientifically knowable at the time the drug was distributed.
(6) One further question remains in this aspect of the case. Comment k, as we have seen, provides that the maker of an unavoidably unsafe product is not liable for injuries resulting from its use if the product is properly prepared, and accompanied by proper directions and warning. With the few exceptions noted above, the courts which have adopted comment k have viewed all prescription drugs as coming within its scope. Kearl suggested that not all drugs are unavoidably dangerous so as to merit the protection of the negligence standard of comment k, and it devised a test to separate those which meet that description from those which do not. It held that the question whether a drug should be exempt from strict liability as unavoidably dangerous presents a mixed question of law and fact which should be decided on the basis of evidence to be taken by the trial judge out of the presence of the jury. The judge should determine, after hearing the evidence, (1) whether, when distributed, the product was intended to confer an exceptionally important benefit that made its availability highly desirable; (2) whether the then-existing risk posed by the product was both `substantial' and `unavoidable'; and (3) whether the interest in availability (again measured as of the time of distribution) outweighs the interest in promoting enhanced accountability through strict liability design defect review. (172 Cal. App.3d at pp. 829-830, fn. omitted.) If these questions are answered in the affirmative the liability of the manufacturer is tested by the standards of comment k; otherwise, strict liability is the applicable test. The Court of Appeal in the present case refused to adopt this approach on the ground that it required the trial judge to decide questions of fact which were ordinarily left to the jury, and that it presented the specter of inconsistent verdicts in various trial courts: in one case the question of liability for injuries caused by a specific drug would be tested by a negligence standard, while in another, involving the same drug, the judge might conclude that strict liability was the appropriate test. We acknowledge that there is some appeal in the basic premise of Kearl. It seems unjust to grant the same protection from liability to those who gave us thalidomide as to the producers of penicillin. If some method could be devised to confine the benefit of the comment k negligence standard to those drugs that have proved useful to mankind while denying the privilege to those that are clearly harmful, it would deserve serious consideration. But we know of no means by which this can be accomplished without substantially impairing the public interest in the development and marketing of new drugs, because the harm to this interest arises in the very process of attempting to make the distinction. Under the mini-trial directed by Kearl, a drug manufacturer has no assurance that a product he places on the market will be measured by the liability standard of comment k because a trial judge could decide that the benefit of the drug was not exceptionally important so as to make its availability highly desirable, or that the interest in its availability did not outweigh the public's interest in subjecting the producer to strict liability. In determining whether the injury was unavoidable under the second prong of the test, Kearl requires that the trial court must consider any alternative product that would have as effectively accomplished the full intended purpose of the ... product. (172 Cal. App.3d at p. 830.) A manufacturer's incentive to develop what it might consider a superior product would be diminished if it might be held strictly liable for harmful side effects because a trial court could decide, perhaps many years later, that in fact another product which was available on the market would have accomplished the same result. Further, the question of the superiority of one drug over another would have to be decided not in the abstract but in reference to the plaintiff, since the advantages of a drug cannot be isolated from the condition of a particular patient. Thus, in one case the drug that injured the plaintiff might be the better choice, while this would not be true as to another user. An additional matter that militates against adoption of the Kearl approach is that, as the Court of Appeal observed, different trial judges might reach different conclusions as to whether the same drug should be measured by strict liability principles, because the determination in each case depends on the evidence as well as the subjective determination of the judge regarding such matters as what constitutes an exceptionally important benefit of a drug. We do not see how a reviewing court could harmonize these differing conclusions without ignoring the fundamental rule that a trial court's decision on the facts must be upheld if it is based on substantial evidence. In addition, there is a danger of inconsistency between the findings of the judge and the jury in the same case. Some of the factors considered by the judge in making his determination whether the issue should be submitted to the jury on the basis of strict liability or negligence appear so similar to the matters considered by the jury in making the subsequent risk/benefit analysis required by Barker, that the judge in effect makes a preliminary determination whether a drug contains a design defect. If he determines that strict liability is the appropriate standard, the jury is required to make a second determination, based on factors and evidence similar to those considered by the judge, whether the drug was defectively designed. The possibility of conflicting conclusions by judge and jury is real. Kearl gives the manufacturer a chance to avoid strict liability. But the eligibility of each drug for favorable treatment must be tested at a trial, with its attendant litigation costs, and the drug must survive two risk/benefit challenges, first by the judge and then by the jury. In order to vindicate the public's interest in the availability and affordability of prescription drugs, a manufacturer must have a greater assurance that his products will not be measured by a strict liability standard than is provided by the test stated in Kearl. Therefore, we disapprove the portion of Kearl which holds that comment k should not be applied to a prescription drug unless the trial court first determines that the drug is unavoidably dangerous. [11] In conclusion, and in accord with almost all our sister states that have considered the issue, we hold that a manufacturer is not strictly liable for injuries caused by a prescription drug so long as the drug was properly prepared and accompanied by warnings of its dangerous propensities that were either known or reasonably scientifically knowable at the time of distribution. [12]