If a company makes a defective product that harms you, go ahead and file a liability suit. That’s understandable and just. But the California Supreme Court is being asked to consider something wildly different: a lawsuit in which even the people doing the suing agree the product is not defective at all. In fact, it has saved millions of lives.
But they’re outraged – ticked off enough to sue – because the manufacturer did not make a completely different product.
Gilead Sciences, a Foster City-based pharma company, ultimately did develop and sell that other product; for some people, the new drug turned out to be safer. But rather than celebrate the new product, the plaintiffs are suing Gilead for not selling the new product sooner.
If the state’s highest court doesn’t put an end to this wild claim, the innovation that powers the U.S. economy will be put at serious risk.
The product in question is a medicine that treats HIV/AIDS. But if the suit is successful, it’s impact will be felt by anyone who uses thousands of other products.
The misadventure began in earnest with a surprise ruling on Jan. 9, when a California state appeals court in San Francisco failed to block the suit. It was filed by patients who took a drug based on tenofovir disoproxil fumarate, or TDF. On Feb. 20, Gilead Sciences, appealed.
The first TDF-based drug, Viread, was approved by the Food & Drug Administration in 2001. Since then, Gilead has brought four other TDF drugs to market, including Atripla, a single-pill regimen that was hailed as a landmark achievement when it was approved in 2006. TDF became the standard of care for HIV/AIDS. The New York City Department of Health and Mental Hygiene calls it “extremely safe.”
In the early 2000s, Gilead started researching another possible tenofovir-based drug called TAF (with alafenamide substituting for disoproxil). After viewing the results of initial clinical trials, the company made a decision in 2004 to discontinue TAF development.
As far as Gilead knew at the time, the differences between TDF and TAF in benefit and safety were too insignificant to justify the outlays for additional studies. In 2004, Gilead was focused on developing that single-drug TDF-based therapy to improve adherence.
Stopping TAF research was the sort of business decision companies make all the time. They have limited capital, and so have to choose how to allocate it – starting one project, ending another, adding or subtracting funds and capacity.
By 2010, Gilead decided to restart TAF studies to see if the drug might be helpful to the aging population of patients taking HIV medicines. In 2015, the FDA approved the new drug. Gilead released the TAF-based medicine Genvoya – and later released several others, including Biktarvy, now the most popular HIV therapy in the world. Another TAF-based drug, Descovy for PrEP, provides pre-exposure protection (what the medical world calls a “prophylaxis”), nearly eliminating the transmission of HIV during sex. TAF did not replace TDF; physicians still make the decision about whether a TDF- or TAF-based medicine is better for a particular patient.
All drugs have side effects. TDF was implicated in kidney injury and lack of bone density. TAF, on the other hand, was associated with hypertension and rising cholesterol. In both cases, the FDA decided the benefits outweigh any possible harms, and approved labeling that properly disclosed these risks.
Except for the vast numbers of lives being saved, this story is pretty unremarkable: A company keeps trying to improve products on a timetable determined by risk and capital with the aim of pleasing consumers and staying ahead of competitors.
But lawyers for 24,000 plaintiffs who took TDF drugs before TAF’s approval had a different take. As the appeals court ruling said, “They do not assert any claim seeking to prove that TDF is defective. Instead, they [contend] that Gilead’s decision to defer development of TAF to maximize its profits breached its duty of reasonable care to users of TDF.” They are suing Gilead because TAF turned out to be better for them, and they want Gilead to pay them for not bringing TAF to market sooner.
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“Until now, no other court has recognized such a duty, and for good reason,” says the National Association of Manufacturers and other groups representing tens of thousands of businesses.
If the plaintiffs prevail, the wise choice for such businesses is to avoid product improvement – lest they be sued for not doing it sooner. Imagine a car company that makes a perfectly safe seatbelt but is considering a better one – maybe one that buckles up automatically without human intervention. Under the logic of the TDF suit, even to begin researching such a seatbelt is to expose the company to product liability claims if the automatic version is too slow to reach the market.
So, the best way for a company to guard against a huge class-action suit is not to improve its current products at all. Is that what we want? It’s what we’ll get if the California Supreme Court doesn’t assign this suit to the dustbin of legal history.
Will Swaim is president of the California Policy Center and cohost of National Review’s Radio Free California podcast.
