Court Increases Liability for Side Effects of Drugs

SAN FRANCISCO —  In a potentially costly defeat for the pharmaceutical industry, the California Supreme Court ruled Friday that drug companies can be held liable more easily for a medication’s side effects that were not disclosed in warnings to doctors and their patients.

Ruling in an already settled lawsuit over the sleeping pill Halcion, the court said that drug companies must make doctors aware of known or “reasonably scientifically knowable” risks or face liability for injuries caused by those side effects.

Friday’s 6-1 decision has ramifications beyond Halcion, which has been banned in Great Britain and other countries. Economists said the ruling could raise costs for drug manufacturers and reduce the availability of some medicines. The president of Consumer Attorneys of California called the court’s action “a great victory for consumers.”

“It will lead to warnings where there are none,” said Mary Alexander, “and it will also lead to better, more effective warnings.”

The ruling clarifies a 1988 decision by the state high court that set down guidelines for lawsuits over drug warnings. In Friday’s opinion, the majority ruled that plaintiffs who sue drug companies over warnings do not have to prove negligence on the part of the manufacturer but only must show that the side effects should have been known of and warned about. In legal terms, the court extended the doctrine of “strict liability” to such cases.

Justice Stanley Mosk, writing for the court majority, said the justices did not believe the manufacturers’ claims that the strict legal requirement would force companies to “inundate consumers with warnings of even speculative risks from prescription drugs.”

Before a company can be found liable, a judge or jury would have to determine whether the unreported risk, “in light of accepted scientific norms, was more than merely speculative or conjectural, or so remote and insignificant as to be negligible,” Mosk wrote.

Drug makers had argued that they should be held liable for injuries only if the victim proved negligence. Three of the seven justices who decided the case wrote separate opinions complaining that the court should have given companies more room to defend themselves against failure-to-warn lawsuits.

The decision Friday came in a lawsuit against the Upjohn Co. brought by Wilma Peggy Carlin, who said her doctor prescribed the firm’s drug Halcion for insomnia between 1987 and 1992. She said she suffered serious and permanent physical, mental and emotional injuries, including odd behavior and an inability to concentrate. Upjohn later merged and is now known as Pharmacia & Upjohn Inc.

Kaye Bennett, a Pharmacia spokeswoman, said the company was “disappointed” by the decision but had not yet had time to analyze it. Asked whether the drug maker will review or possibly modify warnings as a result of the decision, she said: “I think the package insert has been very carefully reviewed and is very carefully worded as it is. . . . I can’t speculate on any action at this point.”

Bennett said about two dozen lawsuits in the United States are pending over Halcion.

Neither Carlin nor her lawyer, E.S. Deacon of Sacramento, could be reached for comment Friday. But earlier in the week, Carlin agreed in a $2,500 settlement with Pharmacia to drop the lawsuit. Deacon told the Los Angeles Daily Journal, a legal newspaper, that Carlin had previously settled for an undisclosed amount with her doctor and felt that $2,500 was “appropriate under the circumstances of the case.”

Todd W. Kingma, senior litigation counsel for Pharmacia, said Carlin’s case had “no merit,” and she had been eager to settle it. He said the company believes that the labeling on Halcion is “adequate and appropriate” and stands by the drug as “safe and effective” when used as recommended.

Three of the seven justices who decided the Halcion case were members of the Court of Appeal substituting for Supreme Court justices who recused themselves because of potential conflicts of interest. Mosk was joined in the majority by Supreme Court Justice Kathryn Mickle Werdegar and Los Angeles-based Court of Appeal Justices Vaino Spencer and Charles S. Vogel. The conflicts were not disclosed.

The conservative high court has a history of reducing avenues for lawsuits, and its decision Friday surprised some legal analysts. Only a minority of states have similar standards for such lawsuits, according to Peter Davis, an Oakland attorney who represented the pharmaceutical industry in the Halcion case.

In its 1988 ruling, the California Supreme Court held that drug companies could be held liable for injuries caused by drug defects only if the victim proved negligence. In that same case, the court said a company could not be held “strictly liable” for failure to warn of risks that were unknown and unknowable. But the court did not specify if the strict liability rule applied to cases in which the risks were known or should have been known, the issue at stake in Carlin’s case.

Justice Marvin Baxter, in a dissent Friday, said the 1988 court ruling was motivated in part by considerations of a “vital public interest in the development, availability and reasonable pricing of prescription drugs,” a concern that he said continues to justify some protection for the pharmaceutical industry.

“Admittedly, under a negligence standard, some consumers of prescription drugs may be denied compensation for injuries,” Baxter wrote. “[But] on balance the public is better served by increasing the likely availability of affordable, highly beneficial prescription drugs.”

Justice Joyce Kennard sided with the majority in Carlin’s case, but in a separate opinion said the court should have expanded its ruling to allow manufacturers to defend themselves if they can show they acted reasonably in deciding not to warn of a particular risk.

Kennard complained that the majority opinion “imposes on a manufacturer the duty to warn of any risk that arguably may exist.” Contradicting Mosk’s reassurances, she predicted that the opinion will lead to problems of “overwarning” and jeopardize the development and affordability of prescription drugs.

USC professor Joel Hay, a pharmaceutical economist, agreed, calling the decision “particularly harmful to California” because the state has many small, innovative biotech companies that may stop producing needed drugs if they feel compelled to do more and more testing to guard against lawsuits.

Daniel Robinson, head of clinical pharmacy at the USC School of Pharmacy, said the “strict liability” standard imposed by the court might lead to more vague and confusing information on products.

“If you have the complete list of potential problems associated with drug therapy,” he said, “the public could very quickly become numb to that information. In taking the most simple, basic medications, there could be a laundry list of things that go wrong, and most of those things are very rare.”

Halcion is intended as a short-term treatment of insomnia. The most common side effects are dizziness and difficulty with coordination. It is a benzodiazepine, a class of drugs that occasionally causes amnesia. All benzodiazepine sleeping medications can cause dependence and symptoms of withdrawal when stopped abruptly.

According to the patient insert leaflet, Halcion also can cause some rare mental disturbances, including hallucinations, agitation and worsening of depression, including suicidal thinking. The insert advises consumers who experience any changes in thought patterns to call their physicians.

President George Bush and Secretary of State James A. Baker III used to take Halcion to avoid jet lag while traveling, and Robinson described it as “very effective.” The drug allows someone to wake up after taking it without feeling hung-over or drowsy, Robinson professor said.

“The downside was that the short-acting drugs like Halcion tend to have more of a rebound side effect,” he said. “If you have been on it for a number of days or weeks and you stop, there is an increase in the amount of anxiety and panic.”

Dr. Sidney M. Wolfe, director of Public Citizen Health Research Group in Washington, welcomed Friday’s ruling, declaring that Halcion is too dangerous to be on the market. The director of the consumer protection group also insisted that the liability standards do not impede drug development.

“A lot of people have gone temporarily crazy on this drug,” he said. “And the drug has led people to murder under its influence.”