Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The American Law Institute’s drafters of the Restatement (Third) of Torts had the special role modern pharmaceuticals play in society in mind when they got down to the business of “restating” the law of products liability — at least as it relates to prescription drugs — in 1992. After five years of debate and amendments and drafts, the American Law Institute (ALI) adopted the restatement on May 20, 1997. The Final Draft of the Restatement contains a separate provision (Section 6) that addresses liability for prescription drugs. Section 6 has generated a slew of law review articles falling, predictably, on two sides of the fence. Take your pick: Section 6 either ignores precedent and creates new pro-manufacturer law, or it restates an emerging body of law. [FOOTNOTE 1] Section 6 jurisprudence in the federal and state courts is still nascent, with New York being no exception. If Section 6 is adopted in New York, it will have a dramatic impact on drug manufacturers’ liability for defectively designed prescription drugs. This article describes the history leading up to Section 6 and outlines its key provisions. The public policy rationale in favor of the section, and its major criticisms, are also highlighted. Ask most lawyers to name their products liability professor in law school and you will probably get a vacant stare. Now, ask a lawyer what first comes to mind from their products course, and that magical number/letter combination “402A” will roll off the tongue like the final exam was yesterday. Even if you forgot what it means, if all you remember is “402A,” you got your money’s worth The legendary torts czar William L. Prosser was given the job of drafting the Restatement Second of Torts in 1954. After he published his seminal “Assault upon the Citadel” law review article in 1960, there was little doubt that the Final Draft — ultimately adopted by the ALI in 1964 — would embrace strict liability. The Final Draft did not so much as “restate” the law as it literally defined it. [FOOTNOTE 2] While the notion of “strict liability” was cutting edge at the time, 402A “has risen to the dignity of holy writ in many jurisdictions.” [FOOTNOTE 3] 402A imposed liability on manufacturers for “any product in a defective condition unreasonably dangerous” even where the seller “has exercised all possible care in the preparation and sale” of the product. [FOOTNOTE 4] Prescription drugs, however, were deemed “unavoidably safe” and were exempt from strict liability. [FOOTNOTE 5] The “comment K” exception for unavoidably unsafe products has hardly clarified the scope of a manufacturer’s liability. It has been interpreted inconsistently by courts, and there is significant disagreement by legal commentators, as well, regarding its scope. To grossly summarize, some courts hold that a drug properly manufactured and accompanied by adequate warnings is not defective as a matter of law. Many courts apply comment K as an affirmative defense, with the risk-utility test applied on a case by case basis. Still other courts apply an “exceptional social need” test, in which a court applies blanket immunity pursuant to comment K if it is determined that the drug is “essential” to society. [FOOTNOTE 6] New York appears to fall into the category that would apply the protections of comment K to all prescription drugs. The one case cited by other jurisdictions as the New York paradigm ( Lindsay v. Ortho Pharmaceutical Corp.) is 20 years old, and its analysis is limited. [FOOTNOTE 7] One legal commentator, citing the observations of others, noted that “writers have labeled … comment [K] ‘an enigma,’ ‘unclear in many respects,’ ‘poorly drafted and internally inconsistent,’ a ‘masterpiece of confusion and double-speak,’ and ‘a monumental failure.’” [FOOTNOTE 8] A leading products liability professor offered an “A” to any student who could explain comment K to him. [FOOTNOTE 9] So far, no winners. THIRD RESTATEMENT In an attempt to lend some clarity to the confusion over comment K, the drafters of the Third Restatement completely overhauled design defect liability for prescription drugs. Subsection (a) of Section 6 sets up the liability standard as follows: “A manufacturer of a prescription drug … who sells or otherwise distributes a defective drug … is subject to liability for harm to a person caused by the defect.” [FOOTNOTE 10] So far, so good. Subsection (b) goes on to describe the familiar products liability principle that a prescription drug is defective if, “at the time of sale or other distribution,” it “contains a manufacturing defect,” or “is not reasonably safe” due to its defective design; or “is not reasonably safe” due to inadequate instructions or warnings. [FOOTNOTE 11] (The scope of the manufacturer’s obligation to warn of foreseeable hazards at time of sale, and liability for manufacturing defects, are beyond the scope of this article. The Third Restatement holds no surprises on manufacturing defects, but its failure to warn provisions are worth a separate look.) This gets us to the $64,000 question — what is the standard for proving that a drug is defectively designed? The heart of Section 6 is as follows: A prescription drug … is not reasonably safe due to defective design if the foreseeable risks of harm posed by the drug … are sufficiently great in relation to its foreseeable therapeutic benefits that reasonable health care providers, knowing of such foreseeable risks and therapeutic benefits, would not prescribe the drug … for any class of patient. [FOOTNOTE 12] It is the eight words “reasonable health care providers” and “any class of patient” that has gotten a vocal cadre of law school academics in a dither. One going so far as to suggest that Section 6 arguably eliminates design defect claims altogether. [FOOTNOTE 13] But first, what is the point of Section 6? The rationale for Section 6 is based upon the fact that drug design is a highly regulated market, and further that “learned intermediaries” (i.e., doctors) are in the best position to decide, when properly informed, what drugs to prescribe for what patients. [FOOTNOTE 14] In a law review article published late last year, the drafters amplified the rationale for Section 6(c): The Restatement rejects the notion, however, that courts should be able to declare drugs defective because the drug manufacturer failed to develop a reasonable alternative design for the drug. New drugs can only be approved in this country after a very extensive and rigorous approval process by the FDA. Such a review generally takes about [12] years to complete and costs more than $200 million dollars to perform. The courtroom cannot replicate this approval process. To allow a plaintiff to make out a design claim that is less rigorous than the FDA approval process is to indulge in rank speculation as to whether an alternative drug could legitimately reach the commercial drug market. [FOOTNOTE 15] Section 6 tells us that a prescription drug is not defectively designed on a negligence or strict liability theory so long as it (1) provides a net benefit to some patient under some circumstances and (2) is accompanied by adequate instructions regarding risks and use. If such a drug is harmful to other patients in other circumstances, it is still not defective. Section 6 embodies the belief that the federal regulatory system governing prescription drugs is a legitimate (and, apparently, only) mechanism for establishing drug design standards, and further that doctors, when adequately informed by drug manufacturers, are best positioned to insure that the right drugs reach the right people CRITICISM If you seem a believer in Section 6, sit tight for a moment and consider the torrent of criticism unleashed against it. First, it has been argued that Section 6 has no precedential support, especially the “reasonable prescribing physician” standard. Critics have seized upon the fact that in the first draft, the reporters cited all of one case in support of the reasonable physician standard, and taken pains to distinguish even that case. [FOOTNOTE 16] Since then, the reporters have endeavored to broaden the precedential legs of the standard. [FOOTNOTE 17] Second, critics assert that the reasonable physician test itself improperly assumes that doctors will have as much awareness of a drug’s dangers as the manufacturer, and ignores concerns that doctors often simply prescribe drugs with which they are familiar. [FOOTNOTE 18] Third, it is argued that Section 6 lacks flexibility and treats drugs of unequal utility equally (i.e., drugs for cosmetic purposes stand on equal footing as those that combat cancer). [FOOTNOTE 19] Fourth, Section 6 immunizes a drug manufacturer from design defect claims with the mere testimony of a defense expert that the drug has some benefit for somebody, no matter how small the patient group or trivial the disease. [FOOTNOTE 20] Finally, critics point out that there are drugs whose social costs outweigh the benefits to whatever narrow patient class that is benefited by the drug. [FOOTNOTE 21] So, where does Section 6 go from here? The Supreme Court of Nebraska recently confronted whether to adopt Section 6 — and voted nay in a decision handed down ten months ago [FOOTNOTE 22] — although a handful of federal courts (one from New York) have indicated general approval of its liability parameters. [FOOTNOTE 23] Apart from a few exceptions, New York has historically followed the restatement with respect to products liability, [FOOTNOTE 24] and in 21 prescription drug failure to warn cases has embraced 402A in particular. [FOOTNOTE 25] Whenever the New York courts do confront the issue of design defect liability in light of Section 6, however, one thing is for sure: the judges’ clerks will welcome the rich legacy of law review articles both supporting and blasting Section 6. It is not unfair to suggest that few issues have generated a more heated debate in products liability than the ALI’s revamping of design defect liability for prescription drugs. Paul A. Scrudato is a solo practitioner in New York. ::::FOOTNOTES:::: FN1 See, e.g., Jeffrey Winchester, “Section 8(c) of the Proposed Restatement,” 82 Cornell L. Rev. 644, 665-66 (1997); James Henderson, “Prescription Drug Design Liability,” 48 Rutgers L. Rev. 471, 494 (1996). FN2 Richard Cupp; Seventh Annual Health Symposium, 30 Seton Hall L. Rev. 233, 252 (1999). FN3 Supra, Note 1, at 648. FN4 Restatement (Second) of Torts (1965). FN5 Id. Comment K. FN6 Supra, Note 1, at 653-664 (discussing varying interpretations of Comment K). FN7 Shanks v. Upjohn, 835 P.2d 1189, 1198 (1992) citing Lindsay v. Ortho Pharmaceutical, 637 F.2d 87, 90 (2d Cir. 1980). FN8 Richard Cupp, “Rethinking Conscious Design Liability,” 63 Geo. Wash. L. Rev. 76, 81-82 (1994). FN9 Supra, Note 1, at 657. FN10 Restatement (Third) of Torts: Products Liability (1998). FN11 Id. at 6(b). FN12 Id. at 6(c). FN13 Teresa Schwartz, “Prescription Products and the Proposed Restatement,” 61 Tenn. L. Rev. 1357 (1994). FN14 Id. at Comment b. FN15 James Henderson, “Products Liability Restatement in the Courts,” 27 WM. Mitchell L. Rev. 7, 26 (2000). FN16 Supra, Note 2, at 238-40. FN17 Id. FN18 Supra, Note 1, at 673-78. FN19 Supra, Note 2, at 253-54. FN20 Freeman v. Hoffman La-Roche, 618 N.W.2d 827, 840 (Neb. 2000). FN21 Supra, Note 2, at 241. FN22 Supra, Note 19, at 840. FN23 Supra, Note 14, 26. FN24 Tenuto v. Lederle Laboratories, 695 N.Y.S.2d 259, 262 (Sup. Ct. N.Y. 1999). FN25 Martin v. Hacker, 83 N.Y.2d 1, 8 (Ct. App. 1993).

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.