T.H. v. Novartis: Implications for Companies That Have Sold or Are Considering Selling the Rights to Innovator Drugs
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Key takeaways
- The California Supreme Court’s recent decision in T.H. v. Novartis permits a plaintiff to bring to bring failure to warn product liability claims against an innovator pharmaceutical company regarding a drug it ceased selling even though the company (i) did not manufacture the drug ingested by the plaintiff and (ii) previously sold rights to the drug to a third party. This represents a significant expansion of liability: not only is the branded manufacturer liable for the generic manufacturer's failure to warn, but a former manufacturer is liable for the generic version of a drug that it no longer manufactures or has any rights to manufacture, sell or distribute.
- In light of this decision, innovator pharmaceutical companies that have either sold the rights to a drug or withdrawn the New Drug Application may wish to evaluate whether they now face exposure in California courts in light of this decision and what steps, if any, they should take in response.
- Innovator pharmaceutical companies that sell drug rights in the future may wish to consider what steps they can take to mitigate against the risk of being subject to suit in California courts regarding a drug for which the company no longer has any rights.