The pharmaceutical industry scored a big win on June 7 in the Texas Supreme Court. Not only did the court knock out a $3.6 million verdict against a Johnson & Johnson subsidiary that makes the drug Remicade, but it set a new, tougher standard in the state for bringing cases alleging failure-to-warn and fraud.

In the 55-page opinion, the court adopted the “learned intermediary” rule, holding that a prescription drug maker fulfills its duty to warn a patient of its product’s risks if it gives adequate warnings to the prescribing doctor. The decision brings Texas into line with at least 35 states whose highest courts also have endorsed this approach. The case was closely watched in the pharma community and beyond, attracting six amicus briefs, including filings from the Washington Legal Foundation, the Pacific Legal Foundation and the Product Liability Advisory Council.

J&J unit Centocor Biotech, now known as Janssen Biotech Inc., was represented by Gene Williams of Shook Hardy & Bacon in Houston and Robert “Randy” Roach Jr. of Roach & Newton in Houston.

The case was brought nine years ago by Patricia and Thomas Hamilton, who claimed that Patricia developed a lupus-type syndrome after being treated with Remicade for her Crohn’s disease. She sued Centocor for misrepresentation and fraud, claiming the company failed to adequately warn of Remicade’s side effects. A jury awarded her more than $20 million, which was reduced by the trial court to $4.6 million under Texas’s cap on punitive damages. The 13th Court of Appeals affirmed $3.6 million of the award and, most significantly, held that the learned intermediary rule didn’t apply when drug companies advertise directly to consumers.

In its first case addressing these issues, Centocor Inc. v. Patricia and Thomas Hamilton, the Texas Supreme Court adopted the learned intermediary rule in the pharmaceutical context and rejected the consumer advertising exception.

“Until now, we have not considered a case that squarely presents the applicability of the learned intermediary doctrine within the context of prescription drug products-liability cases,” the court stated. “We hold that a prescription drug manufacturer fulfills its duty to warn end users of its product’s risks by providing adequate warnings to the intermediaries who prescribe the drug and, once fulfilled, it has no further duty to warn the end users directly.”

Roach declines comment on the case. Williams refers comment to Johnson & Johnson. J&J spokeswoman Monica Nuefang says the company is pleased with the decision.

Craig Enoch, a partner in Austin’s Enoch & Kever and a former Texas Supreme Court justice, represents the Hamiltons at the high court. He says his clients have not decided whether to ask for rehearing in the case.

Reed Smith counsel James Beck, who penned an amicus brief for the Product Liability Advisory Council, says Texas was the largest state lacking state supreme court precedent adopting the learned intermediary rule in prescription medical products. “Having Texas adopt the learned intermediary rule is a major step,” he tells the Litigation Daily, a Texas Lawyer affiliate. “Texas is a persuasive state and this is a persuasive opinion. It’s a pretty scholarly opinion.” Beck notes that some of the states that have not yet adopted this rule — such as Louisiana, New Mexico and Arizona — could be influenced by the ruling.

Beck, who also writes the Drug and Device Law Blog, adds that he found most interesting the court’s distinction between treating physicians and prescribing physicians when it comes to a duty to warn. In the Hamilton case, the trial court granted a directed verdict to the treating physician, who was not the doctor who had prescribed the drug. On appeal, the treating doctor argued he had no duty to warn the plaintiff, and the Supreme Court agreed. “It’s interesting to see the Supreme Court making the distinction,” says Beck. “That’s an area where there’s considerably more conflict [among the courts].”

Plaintiffs lawyer John Blaise Gsanger of The Edwards Law Firm in Corpus Christi predicts that the ruling will make it more difficult to pursue fraud claims in pharmaceutical cases. Gsanger says Texas now is the first state to require a plaintiff to prove failure to warn to prevail on a fraud claim. “This is the first court in the entire nation to rule that a pharmaceutical company can get away with fraud,” he claims.

Beck calls this argument a red herring. “Failure to warn is a lesser offense than fraud. You always have to prove that,” he says.

Enoch believes the most notable portion of the high court’s decision is that the plaintiff has the burden to show that a drug manufacturer provided inadequate warnings about a drug to a learned intermediary or doctor.

“There were cases going both ways,” Enoch says, noting that the question was: Did the plaintiff have to prove that the warning to the intermediary was inadequate “or did the defendant have to prove that the warning was adequate to the intermediary? The Texas Supreme Court sided with the rationale . . . that the plaintiff always has the burden to prove the inadequacy of the warning. That’s the main principle of this case: that the court advises that the plaintiff has that burden.”