Pharmaceutical Manufacturers Liability for Unforeseen Adverse Drug Reactions


Illness is the common companion of life; medicine aids the body in responding to illness, but adverse reactions to drugs are as old as Medicine. Harm inflicted when healing was anticipated has always been an unwelcome surprise evoking a desire for redress. This feeling is reflected as far back as 2200 B.C. in the Code of Hammurabi, which declared that a physician who caused the death of a patient should suffer the loss of his hand. Illness or death resulting from a drug taken for its curative value still affronts the sensibilities. Injured parties increasingly look to the legal system to fix the responsibility and determine who will bear the cost of an adverse drug reaction.

An adverse drug reaction is a “noxious and unintended” response “which occurs at doses used in man for prophylaxis, diagnosis or therapy.”‘ The majority of these reactions are either mild physical effects that do not require treatment, or moderate reactions that necessitate discontinuation of the offending agent and may demand some countermeasures. These drug reactions may be classified medically as an insult to the body, but it is doubtful that the insult is of a sufficient magnitude to require a legal remedy. In contrast, the severe adverse drug reaction that brings a person close to death and results in extensive medical treatment or permanent injury, and the lethal drug reaction, may be conducive to tort litigation.

The scope of the problem of adverse drug reactions is not narrow, either in its cost to the affected individual or to society. The reported frequency in studies of these reactions ranges from less than one in one hundred to more than one in four drug administrations. The Boston Surveillance Group conducted an intensive in-hospital study to obviate the problems encountered with previous studies that were poorly controlled and designed. The survey lasted four years and involved eleven hospitals and 6,750 patients. Almost five percent of all drug exposures were associated with an adverse event. One of every 200 drug exposures was associated with a “life threatening” adverse reaction, and 0.4% of the monitored patients died of drug attributable causes. In addition to the physical effects on the human body, estimates of the monetary cost of adverse drug reactions range from one billion dollars per year, three billion dollars per year and one-seventh of all hospital days, to four and one half billion dollars per year.

The drugs that cause these adverse reactions are developed, produced, and marketed by pharmaceutical manufacturers. Drug-related injuries are increasingly the basis of causes of action brought in strict liability in tort. These cases define the outer limits of strict liability [and present the] most difficult questions of policy . This Note explores these outer limits and addresses these policy questions. It examines the problems encountered by imposing strict liability for unforeseen adverse drug reactions on pharmaceutical manufacturers, and compares this approach to their liability under the recently proposed Model Uniform Product Liability Act (Model Act).


The Liability of Pharmaceutical Manufacturers for Unforeseen Adverse Drug Reactions, Fordham Law Review, Volume 49, Issue 5, Article 4, 1980.

Originally, negligence was the primary vehicle for recovering damages from manufacturers for physical injuries caused by their products. The success of the action turned on the plaintiff’s ability to isolate the defendant’s specific negligent act and prove by a preponderance of the evidence that the negligence was the proximate cause of the plaintiff’s injury , Courts, frequently faced with a severely injured plaintiff, strained to ease this burden, and they recognized a cause of action for personal injury under a contract-like theory of breach of implied warranty. The American Law Institute finalized the process by adopting a formulation for strict products liability. Section 402A of the Restatement (Second) of Torts delineates strict products liability for physical harm to the user or consumer:

  • One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
    • the seller is engaged in the business of selling such a product,
    • and it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.
  • The rule stated in Subsection (1) applies although
    • the seller has exercised all possible care in the preparation and sale of his product,
    • and the user or consumer has not bought the product from or entered into any contractual relation with the seller.

The Model Act 23 varies from section 402A by distinguishing the product manufacturer from the product seller in determining duties and liabilities. The manufacturer is “subject to liability to a claimant who proves by a preponderance of the evidence that the claimant’s harm was proximately caused because the product was defective.” Other “product seller[s],” such as retailers and wholesalers, are liable only when the claimant proves that the proximate cause of his injury was “such product seller’s failure to use reasonable care with respect to the product.

Physical harm is a basic element in establishing a prima facie case of strict products liability under section 402A. The actual physical injury is usually apparent in drug products liability cases, ranging from blindness, to irreversible brain damage, to death. The Model Act does not limit the cause of action to physical harm. It includes “mental anguish or emotional harm caused by the claimant’s being placed in direct personal physical danger. The action, however, lies only with the injured person and not with third parties.

To recover under Section 402A, a plaintiff must prove that the proximate cause of his injury was a defect in the product that rendered it “unreasonably dangerous.” Under the Model Act, a defect is proved by showing that the product was “unreasonably unsafe” in construction, in design, or because adequate warnings or instructions were not provided.

The construction or manufacturing defect generally occurs on the production line. In these cases, the product fails to meet the standards set by the manufacturer and differs significantly from other units. Such cases are rare with pharmaceuticals because of intensive and effective quality control. Injury from a manufacturing defect, however, renders the producer strictly liable under both section 402A and the Model Act, despite the most elaborate and detailed control system.

Although drugs may be properly manufactured, it is not presently possible to design an effective but completely safe drug. Almost all drugs have the potential to inflict serious harm. A problem arises in determining when this potential renders these drugs defective within the meaning of the law. Comment k to section 402A specifically identifies certain drugs as “unavoidably unsafe products.” It states that such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous. . . . The seller of such products . . . is not to be held to strict liability for unfortunate consequences attending their use, merely because he has undertaken to supply the public with an apparently useful and desirable product, attended with a known but apparently reasonable risk.

Comment k does not limit drug liability under all conditions. It employs a “risk benefit” analysis by comparing the reasonableness of the risk with the benefit to be derived from the product. A product will be considered unreasonably dangerous only if its utility does not outweigh the magnitude of the danger. A problem arises in determining when to balance the risk and the benefit. Dean Keeton suggested that the benefit of the product should be weighed by the “magnitude of the scientifically perceivable danger as it is proved to be at the time of trial. Courts have held, however, that the balance is to be struck with the knowledge available at the time of injury. This accords with the language in Comment k referring to a “known but apparently reasonable risk.” Similarly, section 106 of the Model Act holds a seller liable only if he knew of the drug’s dangerous aspect and acted unreasonably by marketing it. The protection afforded by Comment k and the Model Act may be lost, however, if a drug that offered no substantial benefit caused an injury, even if it was not foreseeable. Such a drug could be considered “unreasonably dangerous” as marketed.

The majority of drugs from which litigation has arisen over the past twenty years are still marketed. The risk benefit ratio of these drugs still favors marketing. The defect, if any, lies neither in the manufacturing process nor in the formulation, but in the adequacy of the warning accompanying such pharmaceuticals. Comment h to section 402A provides that where . . . [the seller] has reason to anticipate that danger may result from a particular use. . . he may be required to give adequate warning of the danger … and a product sold without such warning is in a defective condition. The Model Act is in accord, and generally defines a defective product as one that was “unreasonably unsafe because adequate warnings or instructions were not provided.” If the product, for example, a drug, is one with “unavoidably dangerous aspects,” the Model Act holds the product seller liable if he failed to warn of the known danger. Courts have uniformly expressed a willingness to impose strict liability for drug related injuries when the duty to warn existed and was breached. Furthermore, failure to warn when a warning is required has been held sufficient to establish a defect. The plaintiff need not establish that the product reached him without substantial change because the defect is predicated on the warning, which is under the direct control of the manufacturer. Although the failure to warn must be established as the proximate cause of the harm, there is a presumption that an adequate warning will be heeded.

The threshold question involves delineating the parameters of the duty to warn. The proper role of foreseeability in the duty to warn is an integral aspect when discussing strict liability for unsforeseen adverse drug reactions. Additionally, it must be determined when the duty arises, to whom it is owed, and what constitutes an adequate warning.


Foreseeability and the Duty to Warn

The Requirement of Foreseeability For Adverse Drug Reactions

Between seventy and eighty percent of adverse drug reactions result from the known side effects of established drugs. The pharmaceutical manufacturer has a duty to warn of these side effects. A drug marketed without a warning of known dangers is clearly defective, and the manufacturer will be held strictly liable for any resultant injury. Problems may arise, however, when a consumer is injured by an unforeseen, totally aberrant side effect of the drug. These cases negate the manufacturer’s ability to insulate itself from strict liability through an adequate warning because the formulation of an effective warning of unknown dangers presents insuperable semantic difficulties. Moreover, the alternative to liability for aberrant effects – withholding the drug from the market and continuing testing until all possible effects are revealed – is equally impractical because of the inherent limitations of such testing. Therefore, to promote the availability of beneficial new drugs, the law provides protection from strict liability for the pharmaceutical manufacturer when it cannot protect itself. Because imposition of the duty to warn is justified by the actual and constructive knowledge of the manufacturer, strict liability is not imposed for the failure to warn of unknowable adverse effects. The drug is considered defective only if the manufacturer does not warn of a known hazard.

Basing the imposition of a duty to warn on the manufacturer’s knowledge of the danger introduces the element of foreseeability into strict liability. Strict liability normally represents a shift in focus from the reasonableness of the actions of the manufacturer based on its apprehension of a perceived risk, to the essential character of the product. This incorporation of the negligence concept of foreseeability into the duty to warn has been criticized as a step backward “denying strict liability an independent viability.”

The Appropriate Foreseeability Standard

Several courts have acknowledged this incorporation of negligence elements into strict drug products liability, particularly when liability is based on breach of the duty to warn. Other courts have noted the similarities, but differentiated negligent breach of the duty to warn from strict liability based on the duty to warn. In Phillips v. Kiinwood Machine Co., the Oregon Supreme Court made a further departure from negligence by purging the foreseeability concept from strict liability. The court’s proposed test “to determine the dangerousness of the article, as distinguished from the seller’s culpability, is to assume the seller knew of the product’s propensity to injure as it did, and then to ask whether, with such knowledge, he would have been negligent in selling it without a warning.” This standard has been approved by only one reported drug related injury case. In Hamilton v. Hardy, the plaintiff suffered a stroke after taking the defendant manufacturer’s oral contraceptives for eleven months. The Colorado Court of Appeals held that the appropriate test to determine if the evidence is sufficient for the plaintiff to recover in strict liability would “assume the seller knew of the product’s propensity to injure as it did.’

Recently, the Indiana Court of Appeals expressly rejected the Phillips test in discussing drug related injuries. Even the Phillips court has acknowledged that the duty to warn is partially based on constructive knowledge. Foreseeability of harm is disregarded, however, in certain aspects of drug products liability. In Crocker v. Winthrop Laboratories, the manufacturer’s representatives promoted Talwin, a pain killer, as being positively nonaddictive. There was no evidence at the time of marketing that the drug was addictive. Mr. Crocker took Tawin, became addicted, and subsequently died from his debilitating addiction. The manufacturer was held liable because it went beyond merely stating that there was no evidence of harmful effects by actually promoting the drug as being without such effects. The positive representation negated the absence of foreseeability. This type of “express warranty” of a “material fact” also renders a manufacturer liable under the Model Act. In this situation, the manufacturer is claiming knowledge it does not have. It provides a false assurance of safety and induces unjustified reliance by the drug user, thereby losing the defense of unforeseeability.

The Crocker court recognized that because some products are so dangerous, the manufacturer should be liable without reference to his actual or constructive knowledge. “In the case of a generally beneficial or good product,” when the manufacturer’s liability is predicated on the adequacy of the warning, however, even the Crocker court was not prepared to compare the warning given with the facts known at the time of trial. 89 A problem in strict liability is setting limits, and like the Crocker court, other courts have stopped short of imposing strict liability for failure to warn when the hazard was unknown. The duty to warn can arise only when there is knowledge of the hazard. This knowledge is not imputed to the manufacturer from the facts available at the time of trial, but is determined by what was known at the time of injury. The Model Act also adopts this approach by requiring actual or constructive knowledge when liability is based on a breach of the duty to warn.

This adherence to a foreseeability standard may wed strict tort liability to negligence when the action is based on the breach of a duty to warn. Dean Prosser’s 1960 statement that “there is not one case in a hundred in which strict liability would result in recovery where negligence does not” continues to be valid in these cases. Commentators have noted the concern that this adherence to the negligence standard will work a hardship on the plaintiff through the imposition of a heavy burden of proof.

When the severely injured victim of an adverse drug reaction is before the court, however, there is a reluctance to let the injury go unremedied. 98 An examination of the elements of the duty to warn illustrates the exercise of judicial flexibility, even within the bounds of foreseeability, in providing redress.

When Is There A Duty To Warn?

When the defect in a drug is the failure to warn, this failure “is by definition the manufacturer’s dereliction.” Therefore, the plaintiff need not prove either that “the defect existed at the time the drug left the hands of the defendant,” or that the defendant actually knew of the hazard that caused the injury. It is enough that knowledge of the hazard existed. The pharmaceutical manufacturer is accountable as an expert in the field and is attributed both actual and constructive knowledge of its product.

Actual knowledge is first acquired through extensive premarket testing. A manufacturer that does not test its product may be precluded from raising the defense that no available test could have revealed the adverse effect that caused the injury. Once the drug is marketed, the manufacturer is responsible for knowledge received from reports of adverse reactions. A single letter reporting one adverse event may be offered as evidence of the manufacturer’s actual knowledge. The manufacturer may be charged with the duty to warn even if the exact nature of the adverse reaction is unknown.

The duty to warn continues after marketing is commenced. New information concerning the drug’s composition and effects must be incorporated into the warning. Information contained in medical journals and other scientific literature will be imputed to the manufacturer because of the duty to keep abreast of these sources. If the adverse drug effect is reported in any of these sources prior to a particular plaintiff’s injury, the determination whether the defendant “was or should have been sufficiently certain” of this effect to be under a duty to warn may be left to the jury. Once the duty to warn arises, the manufacturer must effectively transmit the warning to the consumer

To Whom Must The Warning Be Given?

Initially, the pharmaceutical manufacturer was under no duty to warn persons who were allergic to the product or who experienced an idiosyncratic reaction. A warning was required only when an appreciable number of persons experienced a particular side effect. These limitations have been specifically rejected. Allergies and physical idiosyncracies are merely factors to consider in determining the parameters of the duty to warn. Although it may be harder to anticipate allergic reactions. these reactions are considered foreseeable and a duty to warn is imposed, regardless of the nonexistence of appreciable numbers. A duty to warn exists even if the people affected represent a small number of idiosyncratic or hypersensitive users. In reality, the actual chance of occurrence may be very small. For example, the manufacturer of Sabin polio vaccine was charged with the duty to warn even though the risk of vaccine-induced polio was, at maximum, one in three million administrations.

The duty to warn of dangers in prescription drugs is generally discharged when an adequate warning is transmitted to the consumer’s physician.  Although the consumer need not be directly apprised of any danger, both the prescribing and the treating physician must be warned. Because drug effects are so complex, only a medical expert is expected to be able to appreciate and balance the potential benefits of the drug with the hazards of administration. Therefore, the physician stands as the ” ‘learned intermediary’ between manufacturer [or seller] and consumer.” The Model Act adopts this reasoning and provides that “Iflor products that may be legally used only by or under the supervision of a class of experts, warnings or instructions may be provided to the using or supervisory expert.” The transmission of the warning to the consumer is dependent on the medical judgment of the physician.

Nevertheless, when a prescription drug is distributed in such a way that the role of the “learned intermediary” is eliminated, as with the mass polio immunization program, – no one stands between manufacturer and consumer. In such cases, the warning must run directly to the consumer. Even the administration of a vaccine by a doctor in his private office may be sufficiently clinic-like so that the duty to warn is not discharged by transmitting a warning only to the physician. In all cases, the duty to warn will be discharged only by the effective transmission of an adequate warning.

 What Is An Adequate Warning?

It is presumed that an adequate warning will be heeded, but the essence of an adequate warning is not easily adduced. Federal law requires that drugs be labeled with appropriate instructions for use, as well as information on contraindications, side effects, and effectiveness. 130 Although compliance with these regulations does not make the warning adequate as a matter of law for purposes of civil liability, it may establish a minimum standard. Conversely, noncompliance may constitute negligence per se. Under the Model Act, compliance is evidence that the product is not defective, while noncompliance is accorded similar evidentiary weight in showing a defect.

A proper warning must adequately state the risk. In determining when the risk is adequately stated, a balance must be achieved. A warning may be adequate when experts say that a stronger warning would be incorrect. The warning must be strong enough, however, for if it remains unchanged when the manufacturer knows it is being widely disregarded, it will be considered inadequate. Finally, even the clearest, most complete, and most comprehensive warning will be inadequate if it can be shown that the manufacturer dissipated or eroded the effectiveness of the warning through overpromotion of the drug.

Specific guidelines for an adequate warning do not exist. The warning must be “reasonable under the circumstances.” Circumstances vary, however, and jurisdictions define “reasonable” differently. Although these differences may lead to inconsistent results, the consistency provided by absolute strict liability that removes foreseeability from the duty to warn would lead to even greater injustice.


Foreseeability of harm could be eliminated as a necessary element in establishing liability for a breach of the duty to warn. The pharmaceutical manufacturer would simply be liable for any adverse drug reaction unless an adequate warning was previously transmitted. The complexity of drug products litigation might be reduced, and it would no longer be necessary to prove what information was known, when it was known, and if it was sufficiently known. This simplistic approach, however, is not one chosen by the courts or proposed in the Model Uniform Product Liability Act. Foreseeability is retained because its removal would clash with the two policies that justify the imposition of strict liability-providing incentives to more careful conduct, and risk allocation to the one in the best position to insure against failures.

The incentive theory is premised on the belief that strict products liability results in safer products. Of all products, however, this justification seems especially inappropriate as applied to ethical drugs. Drugs are properly characterized as unavoidably unsafe products, or products with “unavoidably dangerous aspects.” They are by nature toxic, although administration of the drug seeks to maximize the toxic effect in those parts of the body afflicted with the disease and to minimize it in other parts of the body.  For these reasons, it is irrational to suppose that a legal obligation imposed on a pharmaceutical manufacturer can alter the essential nature of a drug. Moreover, it is unlikely that the threat of strict liability would spur the manufacturer toward more intensive and extensive premarketing tests to reveal latent dangers.

The pharmaceutical industry is heavily regulated by statute and by the Food and Drug Administration (FDA). The Federal Food, Drug, and Cosmetic Act prohibits the marketing of a new drug until the FDA approves a New Drug Application submitted by the manufacturer that demonstrates the drug’s “safety” for its intended use. The thalidomide disaster, which caused the birth of severely deformed children, facilitated the adoption of the 1962 Harris-Kefauver Amendments. They require “safety and efficacy” for new drug approval, and provide for the withdrawal of approval of older drugs if new evidence reveals a serious challenge to their safety or efficacy. The FDA requires exhaustive premarket testing before it will approve a new drug. If the premarket testing plan is approved, the clinical investigation proceeds in three phases. Phase I examines the pharmacologic effects of the drug on human beings-what the drug does to humans and in what doses. In Phase II, the drug is administered to persons as therapy for a specific medical condition. The physiologic changes produced by the drug are intensively monitored. Such changes may be beneficial, in the form of treatment, or harmful, in the form of side effects. Phase III clinical studies involve larger numbers of patients. The studies continue to be carefully monitored and are used to define the most appropriate drug dosage and treatment techniques. The FDA must be informed of results and progress throughout the entire testing process. Many drugs may pass the first three phases but receive only limited FDA approval that requires postmarketing surveillance and initially, controlled distribution. This has been termed Phase IV, and eventually may represent an additional step for all drugs prior to full approval.

Strict liability is justified on the purely economic ground that the manufacturer is in the best position to absorb and distribute the cost of minimizing the risks associated with the product. Nevertheless, the incentive theory, with its resultant extensive testing, is an inadequate justification for imposing strict liability on pharmaceutical manufacturers because of the costs involved. Under present regulations, the cost of developing a new pharmaceutical is estimated at twelve million dollars. – The pharmaceutical industry is the major source for the development of new drugs, and, because it is a profit motivated industry, 1 66 the cost of more extensive testing for safer drugs would be reflected in higher drug prices. This result, however, may be equitable, because drug consumers directly benefit from increased safety and would directly bear the cost of minimizing the risk. Nevertheless, despite this one equitable argument, other costs of more extensive testing cannot be so fairly distributed and mitigate against imposing strict liability.


Data supplied by laboratory tests on animal models are, by nature, of limited application to human beings because of species difference. 167 Ultimately, the effects of a drug on a human can only be determined by testing it on human subjects. The costs of this type of more extensive safety testing would be less equally apportioned among consumers. Phase I clinical trials, the first administration of the drug to a human being, require healthy volunteers, who are usually male and often inmates in penal institutions. When a test drug is administered to any healthy subject, the attendant risk is very real, and the presence of a counterbalancing benefit to this individual is questionable. 169 The participants in Phase II and III clinical trials are seldom private patients. They have some chance to benefit from the drug because it was developed specifically to relieve their ailment. The preferred clinical trial, however, is a double-blind procedure in which the effects of a new drug are tested against either a placebo or an established therapeutic agent. Neither the administering physician nor the volunteer patient know the identity of the drug administered. The subject of such a trial assumes the risk of receiving no curative therapy if a placebo or a less effective treatment is assigned. Testing must actually be continued until one drug is proved significantly more effective to establish valid trial results. If drug safety could be achieved through more extensive testing, the price could not be judged by monetary cost alone. There is a human cost that falls primarily on the incarcerated, the indigent, and the ill.

Furthermore, society pays for the imposition of strict liability by being denied the benefit of new therapeutic agents.

There are two risks involved in the development of new drugs:

  1. the risk that unforeseen, perhaps catastrophic, injuries will result because a new drug is used in man too soon;
  2. and the risk that needless human suffering and death will occur because a beneficial drug is withheld from mankind too long.

Absolute liability for the adverse effects of new drugs would enlarge the latter risk to unacceptable proportions, while giving a remedy only to those injured by the former risk.

Prolonged premarket testing by pharmaceutical manufacturers to limit liability would result in an increase in “drug lag“–the phenomenon of new drugs being approved for use consistently later in the United States than in other medically advanced countries. Drug lag results in drugs being withheld from the public, as the manufacturer attempts, through testing, to uncover potentially serious side effects. – A drug manufacturer will never be sued by the multitudes who suffer because a drug was not released. Moreover, the deterrent effect of strict liability can be awesome. For example, if a drug with the potential therapeutic impact of penicillin is not released because of overly stringent testing procedures, more people will be harmed by the deprivation of that single agent than by all the toxicity that has occurred in the history of modern drug development.

More extensive premarket testing can therefore increase the cost of a drug and delay or even prevent its release, yet still fail to reveal some aberrent effect. The market is the ultimate laboratory, and the consumer is the ultimate test subject. The desire for “effective drugs developed without attendant risk or toxicity” has been termed a desire for “something for nothing,” wish for “progress without price“. No theory of strict liability can fulfill that desire or grant that wish.

Although the imposition of strict liability for failure to warn of unforeseen hazards cannot prevent injury by producing significantly safer pharmaceuticals, it can provide that the manufacturer will bear the cost of any injury that ensues. If drugs cannot be made completely safe, any loss suffered by the producer in compensating for consumer injury is a cost of engaging in such a business. The risk allocation theory envisions that this loss can be “treated as a cost of production against which liability insurance can be obtained.” If the hazard is unforeseeable, however, the resulting damages are equally unforeseeable and impossible to reflect accurately in the “product price schedule.” The ability of the manufacturer to anticipate and absorb the cost of product related injuries is significantly impaired by an unknowable danger. Furthermore, it is impossible to insure accurately against unforeseeable adverse drug reactions. The sufficiency and cost of any insurance may be severely disproportionate to the actual risk or loss. High premiums may force manufacturers to go uninsured, and manufacturers of high risk products, such as drugs, may become reluctant to develop new products.

It is not suggested that pharmaceutical manufacturers will completely terminate research and development of new drugs if held strictly liable for all adverse reactions. The pharmaceutical industry is highly competitive; new drugs must be produced to insure a company’s continued existence, and the potential benefits of a successful new drug are enormous. Nevertheless, the introduction of new drugs would be delayed, and certain agents might never be marketed, because the marketing of a new drug involves multiple riskbenefit analyses. The risk of adverse drug reactions must be balanced against the drug’s therapeutic effect. Furthermore, the risk of liability from adverse drug reactions must be weighed against the potential market for the drug. A drug with enormous therapeutic potential may have a limited market and be associated with a high degree of liability. This type of drug would be most adversely affected by the imposition of strict liability because the pharmaceutical manufacturers would probably shelve such a drug to limit the potential losses. For example, premature delivery is the major cause of infant death during the period immediately following birth, as well as a major cause of mental retardation. The search for a drug to control premature labor is a primary clinical objective, but the possible liability associated with marketing such a drug is substantial. The drug would be given during pregnancy, a high risk period for adverse effects. It would affect a high risk group, infants, particularly premature infants. Furthermore, the statute of limitations would be extended by the infancy of the potential plaintiff. Finally, the drug would have a limited market because it would be administered in acute, rather than chronic situations.

In these cases, the manufacturer only apparently bears the loss; the true cost is borne by society. Strict liability cannot effectively help prevent the injury; neither the incentive nor the risk allocation theories justify its imposition on pharmaceutical manufacturers. Other methods of injury prevention and compensation for unforeseeable adverse drug reactions should be considered.


Presently, the law has determined that the cost to society of strict liability for failure to warn of unforeseeable adverse drug effects is too high and, therefore, it exempts the manufacturer from liability in this limited situation. The injured consumer left without remedy. however, may not appreciate the justification for this decision. Courts have endeavored, within the limits of foreseeability, to provide a remedy, and these efforts are frequently successful. Further protection for the consumer, however, should be provided by the legislature.

The most effective drug attacks the etiology of a disease rather than the symptoms. The etiology is often obscure or unknown, and, therefore, therapy can only be palliative. Often, ignorance is the cause of problems stemming from unforeseeable adverse drug reactions, and knowledge can alleviate these problems. In the risk benefit calculus, it is essential to determine whether the marketing of the product, even with warnings, was justified either legally or medically. The key to such actual or constructive knowledge is a national reporting system for adverse drug effects.

Currently, the FDA’s Division of Drug Experience collects and evaluates information on drug usage, adverse reactions and other drug experience data. Presently available surveillance sources have helped substantiate the causal relationship of certain drugs with rare adverse reactions, such as DES and adenocarcinoma, and potassium chloride and gastrointestinal ulcerations. The recognized need to expand these information gathering sources has resulted in a joint project by the National Bureau of Standards, the FDA, and the Joint Commission on Prescription Drug Use to investigate practical techniques of postmarketing surveillance. The results of this project will soon be available. It already appears that the Phase IV period of monitored release prior to full FDA approval of new drugs will officially be required. The United Kingdom has adopted a similar system, under which the physician is informed of the limited nature of the drug approval and commits himself “to supply specific information on the response of each patient” to the manufacturer. Such a system performs a dual function. Information concerning the risks associated with the new drug is transmitted from the manufacturer to provide the basis for an informed choice. Second, information concerning the consumer’s reaction to the drug is transmitted back to the manufacturer to provide the basis for knowledgeable drug warnings and rational marketing policies.

A surveillance system that efficiently furnishes information on the effectiveness and the effects of new drugs restricts the defense of unforeseeability by making the unknown known. Someone must be injured before the danger is known, however, and the unforeseeability defense should remain against this initial injury. Any costs of unavoidable harms that would be shifted from the individual should be borne by society at large. An insurance program “that will … compensate the occasional victims of serious unwanted effects” would not only serve as a remedy by spreading the cost to society, but would also facilitate the operation of a surveillance system.

A federally sponsored program might provide the means for the establishment and operation of a viable system. The federal government already plays an integral regulatory role in the passage of a new drug into the market place. No new drug can move in interstate commerce without government approval. Furthermore, the government sets the standards of “efficacy and safety” required for approval prior to marketing and is in the best position to distribute the costs of unforeseen adverse drug effects that result from marketing. The National Swine Flu Immunization Program, established pursuant to the Swine Flu Act of 1976, is a direct precedent for this type of government action. This legislation provided an exclusive remedy against the United States for injuries resulting from the administration of the swine flu vaccine. The government retained the right to sue the vaccine manufacturer for negligence or breach of contract in connection with the program. The constitutionality of the Swine Flu Act has been upheld. A similar program may provide an equitable way to compensate the victims of unforeseeable adverse drug reactions. Admittedly, the conception and implementation of such a program would not be without problems. A program directly patterned on the Swine Flu Act, incorporating the limitation of an exclusive remedy against the government, would not be desirable. The legislative goal should be to offer a government remedy when the plaintiff establishes the causal relation of injury and unforeseeable drug side effect, yet fails to demonstrate a breach of the duty to warn. Such legislation would compensate the injured plaintiff without inhibiting the development of beneficial new drugs. It would not result in lowering pharmaceutical industry safety standards because the manufacturer would still be directly liable for any breach of duty of care now imposed by the courts. The legislation required to deal with this sensitive area would necessarily be complex, but the problems raised by drug products liability are intricate. Complex questions are not well served by simplistic answers.

Kathleen H. Wilson, 1980

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