Pharmaceutical Product Liabilities and the Role of Preemption

Pharmaceutical manufacturers can be subject to product liability claims resulting from various allegations including: (1) design defect, (2) manufacturing defect, and (3) failure to warn.

Design defect claims allege that the design of a product is inherently dangerous (even when manufactured perfectly) while manufacturing defect claims allege that a mistake was made in the manufacturing of an inherently safe product. Failure-to-warn claims allege that adequate warnings were not provided to the user even though in most cases there was not a problem with the design or manufacturing of the product.

Significant legal decisions and other changes in the legal environment can directly impact the amount of reserves a pharmaceutical company should accrue to cover the costs necessary to resolve product liability claims. Pharmaceutical manufacturers of all types of drugs (e.g. brand name, generic, biosimilar) have argued that their exposure to product liability claims should be minimal due to the rigorous Food and Drug Administration (FDA) approval process. These arguments, based on the theory of preemption, have had varying degrees of success in the United States legal system.

Pharmaceutical Product Liabilities and the Role of Preemption