By Jeffrey W. Lawrence and Robert K. Jenner
Pharmaceutical companies occupy a unique position, particularly in California. They benefit from patent protections and a five-year exclusivity period that can generate billions in revenue. At the same time, California law limits strict liability design defect claims for prescription drugs under Brown v. Superior Court. Together, those protections place drug manufacturers in a fundamentally different position from other industries.
On Wednesday, May 6, the California Supreme Court will hear argument in a case that goes to the heart of what we expect from pharmaceutical companies—and what the law requires when patient safety and profit collide. The question is straightforward: if a company knows it has a safer version of a drug it plans to bring to market, can it delay that drug for years to maximize profits, even when that delay will foreseeably harm patients using the older version?
The case centers on two versions of an HIV medication developed and owned by Gilead Sciences, tenofovir, a drug that treats HIV but has known adverse effects on kidneys and bones. The drug is delivered via ‘prodrugs’ that is, delivery systems for the same anti-viral agents of the same active ingredient, the compound – tenofovir. At a basic level, both versions of tenofovir are used to treat HIV. For millions of patients, tenofovir is not optional—it is essential to survival. TDF, the prodrug form for Viread requires 300 mg of tenofovir; TAF only 25mg- thus, TDF requires more than 10 times the amount of tenofovir that TAF requires.
Thus, as Gilead knew early on the difference between them is not accidental or marginal. The difference reflects a different way of delivering the same underlying drug. Tenofovir itself cannot be taken directly. It must be delivered into the body in a form that allows it to reach the cells where it works. That is where TDF and TAF come in. They are not two unrelated drugs. They are two delivery systems for the same compound.
TDF, the earlier formulation, releases tenofovir into the bloodstream at relatively high levels. It is effective, but those high circulating levels come at a cost. Over time, patients taking TDF face increased risks of kidney damage and bone loss. Those risks have been well documented.
TAF, the newer formulation, was designed to solve that problem. It delivers tenofovir more efficiently into cells, allowing it to achieve the same antiviral effect at roughly one-tenth of the dose. Because less of the drug circulates in the bloodstream, the stress on the kidneys and bones is significantly reduced.
In practical terms, this was not the invention of a new drug. It was a better way of delivering the same drug—one that reduced known side effects without sacrificing effectiveness. That distinction matters, because it meant Gilead did not have to guess whether TAF would work. It already knew.
By the early 2000s, Gilead had developed TAF and understood its advantages. It had a path and plan to bring it to market. But when the company recognized that releasing TAF would reduce the profitability of TDF, the timeline changed. Instead of moving forward, Gilead delayed with intent. The internal documents obtained from the file cabinets of its corporate offices, made public for the world to see, reveal in stark terms its plan to delay the production of the safer version.
By 2003, TAF’s benefits over TDF were so exceptional that Gilead saw it as the ‘second generation of its HIV franchise. By then, its preclinical and clinical studies had made clear that TAF was at least as good at treating HIV as TDF- but with one-tenth the dose of TDF- thereby limited the inevitable side effects. In 2003, despite realizing these benefits and therapeutic advantages, Gilead stopped developing TAF, not because of safety concerns or scientific uncertainty, but because it would “cannibalize” the company’s existing product. Internally, it realized that delaying TAF until the patent on TDF was expiring would reap: billions of dollars in additional revenue and income. Of course, it also deprived patients of Gilead’s alternative while TAF was on the shelf waiting for the maximum financial return.
That strategy worked—from a business perspective- Gilead rolled out its first TAF product in 2015 and made billions more than its 2003 model predicted. It also meant that patients continued taking a drug with greater risks while a safer alternative sat unused.
The scientific literature has only strengthened what Gilead already understood at the time. A comprehensive meta-analysis comparing TDF and TAF across multiple patient populations found that TAF consistently produces better kidney outcomes. Patients taking TAF experienced fewer declines in kidney function and less overall damage. The authors described this as a “notable renal safety advantage.” Notably, several of the authors were affiliated with Gilead itself. Even with that connection, the conclusion remained the same: TAF is safer.
A separate analysis published in JAMA Network by noted epidemiologist Sean Tu, Ph.D. places this conduct in a broader framework. It describes “drug versioning,” a strategy in which pharmaceutical companies delay improved drugs to extend the commercial life of older ones. According to that analysis, Gilead’s delay of TAF fits that pattern precisely.
Against that backdrop, the California Court of Appeal considered whether these allegations could support a claim under California law. It answered that question clearly: yes.
The court emphasized that this is not a product liability case. The plaintiffs are not claiming that TDF is defective. Instead, they challenge Gilead’s conduct—its decision to delay a safer drug for financial reasons. That distinction is critical. California law does not limit responsibility to defective products. Civil Code section 1714 establishes a broader rule: everyone is responsible for injuries caused by a failure to exercise ordinary care. The Court of Appeal applied that principle in a structured way, focusing on foreseeability, moral blame, and the broader consequences of recognizing a duty.
On foreseeability, the court’s reasoning was direct. If a company knows a safer drug exists, it is entirely foreseeable that delaying that drug will result in avoidable harm. Patients will continue to experience the very side effects the safer drug was designed to reduce. That is not speculation—it is the expected result of the decision.
On moral blame, the court’s language was equally clear. It recognized that when a company knowingly withholds a safer alternative while continuing to profit from a more dangerous one, that conduct can be “morally blameworthy.” That conclusion was tied not just to the harm itself, but to the financial benefit derived from the decision and the vulnerability of the affected population.
Patients living with HIV do not control drug development timelines. They rely entirely on the manufacturer’s decisions. When those decisions are driven by profit at the expense of safety, the law takes notice. The Court of Appeal also considered the broader policy implications and rejected the idea that recognizing a duty here would be unworkable. Instead, it concluded that allowing a jury to evaluate the reasonableness of such conduct fits comfortably within established negligence principles.
Gilead’s primary responses have been threefold. First, Gilead argues that it owes no duty to act reasonably in its business, as §1714 requires all companies to do.. In Gilead’s world, as long as TDF is not alleged to be defective, it cannot be held responsible for in delaying TAF—even if that delay exposed patients to foreseeable harm. Perhaps most egregiously, the delay allowed Gilead to exploit the unique protections afforded to pharmaceutical companies while exposing patients to known risks.
That argument collapses all responsibility into product defect law and attempts to turn a doctrine designed to ease recovery—strict liability—into a shield against negligence- and use it to eviscerate liability for negligence- something it was never intended to do. California law has never allowed one doctrine to erase the other. A product defect claim focuses on the condition of the product itself—whether it was defectively designed, manufactured, or lacked adequate warnings when it was sold. Negligence, by contrast, looks at the defendant’s conduct, including decisions made before and after a product enters the market, and asks whether those choices were reasonable in light of known risks. California law has long recognized that these are distinct theories of liability, and it does not limit responsibility to defective products when a company’s independent conduct foreseeably causes harm.
Here, the theory of liability does not depend on proving that TDF was defectively designed or should never have been sold. Instead, it focuses on what Gilead did after it had a safer version for tenofovir delivery and decided to manufacture it, to get it to market by 2006. The claim is that Gilead made commercialization decisions—when to develop, when to release, and which drug to prioritize—not based on patient safety, but on maximizing revenue, even though those decisions foreseeably prolonged patients’ exposure to greater risks. That is the essence of negligence: a failure to act reasonably in light of known dangers. California law allows those kinds of claims to proceed because the duty of reasonable care does not stop at the point of sale; it extends to decisions that continue to affect the safety of people who are using the product.
Second, Gilead has also incorrectly framed the case as imposing a “duty to innovate.” That framing does not withstand scrutiny. No one is asking Gilead to invent a new drug. It already had the safer alternative and had already decided to bring it to market. The question wasn’t were they going to sell it, that was already decided, but when. And when they delayed it, why? Was the decision reasonable in light of all of the circumstances. And again, the company’s internal documents tell us the answer.
Finally, Gilead and its supporters warn that allowing this case to proceed will stifle innovation. That argument is not new — and comes up whenever a pharmaceutical company is sought be held responsible for its actions. The pharmaceutical industry has made similar claims for decades whenever faced with regulation or liability. Those predictions have not come true. The industry remains one of the most profitable and innovative in the world. Indeed, accountability has not stopped progress. It has ensured that progress is not achieved at the expense of patient safety.
The amicus briefs filed in the case on behalf of the patients reinforce that conclusion from multiple perspectives. The AIDS Healthcare Foundation, which has worked directly with Gilead on behalf of HIV patients, explains that this case is about real harm caused by the deliberate withholding of a safer treatment. Its position carries weight precisely because it reflects both experience and independence.
The American Association for Justice and the Consumer Attorneys of California emphasize that the plaintiffs’ claims align with traditional tort principles. They reject the idea that pharmaceutical companies should receive special immunity when their business decisions foreseeably cause harm.
Public health and bioethics scholars take the analysis a step further, comparing this conduct to past cases involving tobacco and opioids. In each of those contexts, companies argued that their decisions were lawful and commercially justified. In each, courts ultimately concluded that profit does not excuse conduct that endangers public health.
The California Supreme Court is not being asked to decide liability. It is being asked whether a jury should be allowed to decide whether it is reasonable to delay for nearly a decade the release of a drug the company itself believed was safer—when that delay generated billions in revenue while patients suffered foreseeable harm. If the Court affirms, the case proceeds to a jury. If it reverses, it creates a rule allowing companies to delay safer treatments without consequence so long as the older product meets minimum standards.
At its core, this case is about a simple principle: when a company knows it can reduce harm and chooses not to, for financial reasons, the law allows a jury to ask whether that decision was reasonable.
For the patients who relied on these medications—and who never had the benefit of that choice—that question is anything but abstract.