Safer Pregnancy; Safer Medical Labels; and a Safer Country

On December 21st, 2017, the California Sate Supreme Court issued a unanimous decision of enormous importance to victims of inadequately labelled prescription drugs. The Court held that “because brand-name drug companies write the labels for all drugs, a brand-name drug company can be sued for injuries caused by mislabeled generic versions of its drug.”

Attorney Leslie A. Brueckner, of Public Justice, who, along with Attorney Ben Siminou, represented the injured plaintiffs, explains what happened:

The lawsuit was filed on behalf of fraternal twins who were injured in utero by a generic version of a brand-name drug called “Brethine,” which their mother took to control preterm labor during her pregnancy.

The defendant, Novartis, is the brand-name drug company that wrote the label for Brethine. Novartis knew that Brethine (and its generic equivalents) could cause fetal brain damage, but it didn’t want to say so on the drug’s label because it was making too much money selling Brethine to pregnant women.

So it didn’t change the label; instead, it sold the rights to the drug to another company for a big profit and went on its way. A few years later, the twins’ mother was prescribed Brethine to control her preterm labor. Her prescription was filled with a generic version of the drug, and her children were born with brain damage.

The twins couldn’t sue the generic drug maker for their injuries because generic drug manufacturers are required, by federal drug laws, to use same label as the brand-name equivalent and can’t be sued as a result.

Instead, they sued Novartis. They argued that the brand-name company should be held liable because Novartis (a) wrote the label for the drug; (b) knew that manufacturers of generic Brethine were required by law to use Novartis’s label; (c) knew its label was inadequate and failed to warn of its drug’s dangers; and yet (d) chose to prioritize profits over safety by declining to update the label in order to protect the drug’s market value as a therapy for preterm labor.

The California Supreme Court agreed with these arguments up and down the line. Not only did it hold that brand-name manufacturers have a duty to victims of generic drugs, it also held that Novartis’s sale of its drug to another company doesn’t let it off the hook for its negligence.

Attorney Brueckner explains why this decision is so important:

This decision will make America a much safer place. The risk of tort liability creates an incentive for drug companies to change their labels when new risks emerge. But when drug companies know they can’t be sued for negligent misrepresentation, all bets are off. Unless there’s a risk of liability in the courts, there’s little incentive for drug companies like Novartis to change their labels to warn of newly discovered risks. Today’s decision creates that much-needed incentive and, as a result, drugs will be much safer for everyone.

As the unanimous Court wrote today, “We therefore conclude that warning label liability is likely to be effective in reducing the risk of harm to those who are prescribed (or are exposed to) the brand-name drug or its generic equivalent.”

This is an important decision, and an outstanding example of the way that tort law, and our court system work can work well to protect individuals from unsafe and unscrupulous practices. Note: All quotes here are from Brueckner, L., “Public Justice Wins Huge Ruling On Behalf Of Generic Drug Victims In California Supreme Court,” December 21, 2017.

arbitration

Removing the Veil of Secrecy

On December 19th, 2017, the New York Times reported that Microsoft has “eliminated forced arbitration agreements with employees who make sexual harassment claims and was also supporting a proposed federal law that would widely ban such agreements.” (Wingfield, N. and Silver-Greenberg, J., “Microsoft Moves to End Secrecy in Sexual Harassment Claims,” NY Times, December 19, 2017).

Why is this important? This makes Microsoft the most prominent company to take steps to “end legal agreements that have been criticized for helping to perpetuate sexual abuse in the workplace. Forced arbitration lets companies keep harassment and discrimination claims out of court, effectively cloaking them from public view and, in some cases, allowing serial harassers to continue their conduct for years.” (emphasis added).

Too many companies require their employees to agree to mandatory, and binding arbitration as a condition of employment. In fact, “according to the Economic Policy Institute, more than half of American workers are bound by arbitration clauses.” Now, however, the tide may be turning, at least as it pertains to harassment claims.

As the Times reports, “this month, a bipartisan group of senators, including Lindsey Graham, Republican of South Carolina, and Kirsten Gillibrand, Democrat of New York, proposed legislation that would make forced arbitration in harassment cases unenforceable under federal law.”

“Ms. Gillibrand said that getting rid of the arbitration agreements would benefit employers in the long run. ‘Without the secrecy of mandatory arbitration agreements, serial predators will be less likely to continue climbing the corporate ladder and employees won’t be forced to stay quiet about the harassment they have faced at work, which is good for employees and good for business,’ she said in a statement.”

This is also important because studies have shown that mandatory arbitration clauses result in unfair treatment of employees. As the Times notes:

By using the arbitration clauses to bar people from joining together as a group, employers — both large and small — have effectively taken away one of the few tools that workers have to fight harassment or discrimination. . . In arbitration, the rules tilt heavily in favor of businesses, employment experts said. Part of the problem is that instead of judges, cases are decided by arbitrators who sometimes consider the companies that routinely bring them business their clients, according to interviews with arbitrators.

The more often companies head to arbitration, the better their chances of winning the case, according to the conclusion of a 2011 analysis by Alexander J. S. Colvin, a professor at Cornell University’s School of Industrial and Labor Relations.

Microsoft’s decision to eliminate this mandatory arbitration clause in sexual harassment claims is an important first step. Let us hope that other companies follow Microsoft’s lead.