Gilead Sciences, a California biotech company, asked the California Court of Appeal to immunize it from liability for its decision to withhold a safer product from its customers. Gilead believed it had no duty of care to consumers for any liability whatsoever if the product at issue was not defective. Gilead was wrong, and in a 62-page opinion, the Court of Appeal eloquently explained exactly why.
Here’s a recap of the facts. Gilead’s TDF was an effective tenofovir based HIV anti-retroviral medication, but it had terrible side effects to kidneys and bones.
Litigation ensued in a coordinated proceeding in the California Superior Court in San Francisco. There are currently more than 22,000 Gilead HIV drug lawsuits consolidated before Judge Andrew Chang. Following years of discovery, which included document exchanges and dozens of depositions, plaintiffs’ counsel uncovered documents that showed that Gilead had a safer version of the drug – TAF — that Gilead had slowed development on so that the patent could run its course on TDF, and the company could keep a stronghold on the market. We allege that Gilead could have and should have released TAF earlier. Had TAF been released earlier, we argued, our clients would not have been killed and maimed.
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Following the discovery phase of the litigation, Gilead filed for summary judgment. In our opposition, we cited Gilead’s internal documents and argued that the company intentionally withheld TAF to maximize profits to the tremendous physical detriment of our clients. Those supporting documents were discussed in detail in a recent New York Times article.
The trial court denied Gilead’s motion for summary judgment. Immediately thereafter, Gilead filed an appeal (filed a Writ) to the California Court of Appeal.
At the oral argument, one of the judges asked Gilead’s lawyer a hypothetical question, which is summarized as follows:
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Assume Gilead did some research in 2003. And the research showed 20,000 people would get injured, and 5,000 people would die if Gilead continued to sell TDF. And assume further that these injuries would not have occurred if it released TAF. Assume finally that Gilead determined that it were to have made five billion dollars more if Gilead decided to go that way. Do you think Gilead could be held responsible for that conduct?
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The defense lawyer said, No, Gilead could not be held responsible for that decision. “There is no duty.” You can watch the short but compelling video coverage of the exchange here.
And now, finally, the California Court of Appeal has set Gilead straight – indeed, it does have a legal duty not to foreseeably harm others. Gilead’s attempt to secure immunity for itself by hiding behind traditional product liability theories has failed. It needs to defend its conduct before a jury like any other person or corporation.
The Court of Appeal, relying on established California law, was clear in its directive:
“We affirm the trial court’s denial of Gilead’s motion insofar as it sought summary adjudication of plaintiffs ‘negligence claim. First, we conclude that the legal duty of a manufacturer to exercise reasonable care can, in appropriate circumstances, extend beyond the duty not to market a defective product.”
“As we have noted, the duty does not require manufacturers to perfect their drugs, but simply to act with reasonable care for the users of the existing drug when the manufacturer has developed an alternative that it knows is safer and at least equally efficacious.”
“[T]he duty of reasonable care does not require the pursuit of commercialization at all costs. Even if we assume that there will be some circumstances in which the duty causes a manufacturer to pursue a potentially safer product longer than it otherwise would have, resulting in some failed or wasted efforts, that loss must be weighed against the benefit to the community from successful efforts, which will result in safer products.”
“In sum, although moral blame “can be difficult to assess in the absence of a factual record” . . . we conclude based on the considerations above that negligence in a decision that deprives people of a safer drug and leaves them reliant on a more dangerous drug is morally blameworthy.”
This last passage is an incredibly damning sentence in an appellate court decision, but we believe it is spot on – denying lifesaving drugs is morally blameworthy.
As we wrote in our brief to the Court of Appeal:
Just as Gilead has done throughout this litigation, Amici, a collection of interest groups representing the pharmaceutical industry in various capacities, focus on the supposed benevolence of pharmaceutical companies in the race to find life-saving medications to justify immunity from tort claims such as this one. For decades, pharmaceutical companies have relied on their unique role of supplying that which we need most – medications to treat society’s most vulnerable — to justify incredible structural protections and benefits, including federal preemption, liability immunities, patent exclusivity, tax incentives and other subsidies. As a result of these protections, the pharmaceutical industry is exceptionally profitable, with a reported $1.4 trillion dollars in revenue last year, and the top pharmaceutical companies alone accounting for $110 billion of that revenue as pure profit and paying only 2% in taxes on such profit.
The notion that pharmaceutical companies can rely on their unique role in supplying life-saving medications to secure extensive protections that no other industry enjoys, and yet disavow any obligation to act reasonably in light of the severe risks to human life its products pose, is repugnant. Amici have something to learn from the old saying: pigs get fed and hogs get slaughtered. Nothing justifies insulating drug companies from a duty to act reasonably in their business so as to prevent foreseeable harm.
Plaintiffs’ lawyers chuckle at the biblical quote referencing Gilead: “Gilead is a city of sinners, tracked with footprints of blood.” (Hosea 6:8). As Gilead turns its attention now to delaying justice another year or so with an appeal to the California Supreme Court, maybe it could begin to atone for its “morally blameworthy” conduct by channeling its considerable resources to compensating victims and survivors of TDF, rather than paying its lawyers tens of millions of dollars a year to defend the indefensible.