Gilead is a biotechnology company that develops and distributes HIV treatments. Its compounds have saved and extended countless lives.
Gilead is being sued in California by HIV patients for not timely developing a new drug.
Some background.
Gilead manufactured and marketed its HIV/AIDS drug, tenofovir disoproxil fumarate (TDF) since 2001.
Gilead was working on “a safer medication”, tenofovir alafenamide fumarate (TAF).
In 2004, Gilead made a business decision to stop working on TAF, explaining that the differences were too modest to justify the tremendous investment required to shepherd a drug to market.
Instead of shuttling back and forth between TDF and TAF, I’ll simply call them older drug (TDF) and newer drug (TAF). And, no, “TDF” here is not “Tour de France.”
Presumably, the newer drug had a lower risk of skeletal and kidney damage, but it would have been hard to definitely conclude that at the time, given that development was discontinued. And long-term side effects might require more time to become clear.
Years later, Gilead decided to resuscitate its development of newer drug. The FDA granted approval for the sale of newer drug in 2015.
Plaintiffs filed suit based on their use of older drug. They did not try to prove that older drug was defective.
Plaintiffs pursued an ordinary negligence claim, arguing that Gilead deferred development of TAF to enlarge its profits stemming from TDF because they alleged that if TAF was developed immediately after TDF, it would have replaced TDF as the superior drug for suppressing the effects of HIV/AIDS. They claim while Gilead maximized its sales of TDF, the later release of TAF was used to extend the patent coverage of tenofovir-related medications. The plaintiffs argued that the decision to postpone development breached Gilead’s duty of reasonable care to the users of TDF. They also asserted a claim for fraudulent concealment, arguing that Gilead had a duty to disclose information about TAF to the users of TDF.
Gilead filed a motion for summary judgment. It argued that if you want to prevail on a claim for product liability / negligence, you first must demonstrate the product was “defective.” If you choose to not demonstrate the product was defective, the claim must fail.
The trial court denied the motion and it was appealed.
The California Court of Appeal issued a decision in January 2024. It dismissed the fraudulent concealment claim. It concluded that Gilead owed no duty to disclose information about newer drug to older drug users.
On the negligence claim, the lower court’s decision was sustained…
finding that a manufacturer has a duty of reasonable care when it invents what it knows to be a safer, and at least equally effective, alternative to a prescription drug that it is currently selling and that is not shown to be defective. In its decision, the court said that public policy factors ruled in favor of imposing this duty, holding that the manufacturer bears some “moral blame” when it makes a decision that “deprives people of a safer drug and leaves them reliant on a more dangerous drug.”
This case is being appealed to the California Supreme Court.
If Gilead has to pay damages for not timely developing a newer drug to replace an older drug, a parade of horribles will unfold.
Some drug companies will avoid the risk of exploring novel compounds. Companies should not be forced to bring their invention to market. If a compound has promise, they can always license it to another entity to take the risk of further development. But that should be their call. Intellectual property law does not force companies to exploit their inventions as the quid pro quo for patent protection.
Further, this case could end up giving courts a seat at the boardroom table, forcing companies to make unprofitable business decisions on what to research and develop, and how to allocate scarce resources.
Importantly, there’s a bedrock principle in tort law which makes any steps taken to remedy a problem inadmissible as evidence. As a mundane example, assume you have a staircase with a rotten step. It cannot support weight. A customer going to the second floor weight breaks the step. He falls and breaks his wrist.
You feel horrible.
You repair the step the next day.
While this person can sue you for negligence for not maintaining the integrity of your steps, he cannot use your subsequent repair of the step as evidence to propel his case. He’ll need to use other evidence. Why does the law allow this? Well, simple. The law wants to incentivize people to repair problems they identify, and not conceal them.
This new duty to market a “better” drug would effectively discourage subsequent remedial measures; exactly what the evidentiary rule aims to avoid.
Finally, if the plaintiffs prevail, expect a tsunami of litigation for product liability cases. The general standard has been that the defendant must prove the defendant placed a dangerous product into commerce. The new, more lenient, standard would only need to prove a newer safer product exists.
Based on the overwhelming number of amici briefs submitted in support of dismissal in the court below, a majority of trade association groups analyzing the decision and law believe that the California Supreme Court should and will overturn the decision. Oral argument is expected in 2025.
What do you think?
“…finding that a manufacturer has a duty of reasonable care when it invents what it knows to be a safer, and at least equally effective, alternative to a prescription drug that it is currently selling and that is not shown to be defective….”
The key here is in the 14th, 15th, and 16th words in the first line: “what it knows.” Unless the companies have a crystal ball–and very few do–they explicitly circled wagons because it would have taken a much larger [read: expensive] study to show that. Since, according to this article, the study wasn’t done, they didn’t know. And they presumably still don’t know what, if any, adverse long-term effects there will be.
Unless there are other facts involved, this is about as obviously a frivolous suit as there can be. It’s the exact equivalent to suing a scalpel manufacturer for not having invented a better scalpel. And since people can get hurt by scalpels, there is clearly harm. I don’t have to show what the new improved scalpel would be like, what it would do, what materials are used to make it. I only have to claim that the current one can be improved.
So, why ~isn’t~ this a frivolous suit?
Ever since 2016, Gilead Pharmaceuticals has had an active connection and corporate presence in Israel.
I hope it is not off topic to consider or ask if any of the plaintiffs in California, against Gilead are aware/unaware of this connection, during their possible participation in anti-Israel, public or University protests?
I am not aware of any such or similar contributions to the research or medical care of people with sexually transmitted viral diseases in any Muslim countries.
It is not my intention to raise an inflammatory argument. Just to ask a couple of unanswered rhetorical questions. At least in my mind, these are relevant.
Michael M. Rosenblatt, DPM