Law.com has a great commentary by Peter Schuck, Professor of Law at Yale, on the problem with the current state liability law surrounding drug and device companies. With the exception of Michigan, FDA clearance of a device does not protect a company from liability, meaning that different state courts can rule differently as to what damages a plaintiff might be entitled to should the jury of 12 people, with nothing better to do for a few months, decide in their favor…
This capricious state of affairs is the reason I think that the states or Congress should establish a qualified regulatory compliance defense to tort liability under which FDA approval would ordinarily, but not always, pre-empt such liability. In practice, this means that a drug manufacturer that receives FDA approval could obtain summary judgment against injured claimants, unless they could show that the manufacturer failed to fully inform the agency of risks about which it should have known.
This issue has gained fresh saliency for two reasons. First, the FDA is now issuing regulations whose preambles assert that state tort law is pre-empted. The courts will decide whether only Congress, not the agency, can do this — an issue I do not address. Second, criticisms of FDA safety regulation have sharpened, most recently with reports that a popular diabetes drug, Avandia, increases heart problems. As I explain below, the remedy for the FDA’s shortcomings is not to use tort law as a separate regulatory system but rather to strengthen its regulatory capacity, as Congress is about to do, and to limit tort to situations where manufacturers misled the agency.
New, improved drugs can save countless lives and improve the quality of life for millions. This social cornucopia, however, depends on the willingness of the pharmaceutical industry, operating in a fiercely competitive international market, to invest vast sums of money and many years of research and development in hopes of coming up with a blockbuster drug like Lipitor to make up for the far more numerous duds. But since a few adverse jury verdicts can destroy a product — or even a company — drug manufacturing is a high-stakes roll of the dice. To elicit the necessary large, long-term investments, some legal predictability is needed.
He goes on from there, intelligently outlining arguments as to what’s to be done, making a great case for severely restricting the plaintiff’s ability to gain compensation on a properly regulated product. It’s really a breath of fresh air to see a well reasoned commentary online (as opposed to a preaching-to-the-choir rant).
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