West Virginia High Court Soundly Rejects Trial Bar’s Theory of Innovator Liability

On May 11, 2018, the West Virginia Supreme Court issued its long-awaited opinion in the case of McNair v. Johnson & Johnson.  The court joined at least 36 other courts, including six federal courts and various state courts in rejecting innovator liability, recognizing that it would disrupt the innovators’ ability to invest further in innovation which could lead to more life-saving drugs.  The court reasoned that innovator liability was inconsistent with both West Virginia tort law principles and public policy.

Innovator liability, which seeks to hold brand name drug manufacturers liable for harm caused by products manufactured by generic companies, has been pushed by trial lawyers around the country seeking to turn centuries of settled tort law on its head, subjecting original product designers or manufacturers to liability not only for harm allegedly caused by the products they made or sold, but also for harm from similar products made or sold by their competitors.

The West Virginia high court directly stated that the entire premise of product liability is based on the defendant being the manufacturer or seller of the product in question.  Innovator liability ““would sever the connection between risk and reward”… that forms the basis of products liability law.”

The opinion clearly states that injuries caused by generic drugs are unforeseeable for a brand name manufacturer, and therefore, the brand name manufacturer should not be held liable. The adoption of innovator liability would unfairly subject brand name companies to unpredictable and potentially immense liability, stifling innovation and undermining public health.

“[T]his Court, as well as other courts, adopted products liability to place responsibility for the harm caused by a product on the party who profits from its manufacture and sale.  Because the brand manufacturer did not place the generic product on the market, it cannot spread the cost of compensating generic consumers by including the cost of insurance or judgments as part of the product’s price tag.”

“If brand manufacturers become liable for injuries allegedly caused by generic drugs, significant litigation costs would be added to the price of new drugs to the disadvantage of consumers.  Further, the increase in litigation against brand manufacturers could stifle the development of new drugs, which would have negative health consequences for society.”

ATRA filed an amicus brief in the case that can be found here.