Schubert v. Genzyme Corp. Drug Manufacturers Are under No Affirmative Duty to Sell Their Drugs

Schubert v. Genzyme Corp. Drug Manufacturers Are under No Affirmative Duty to Sell Their Drugs


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We have another case in which a plaintiff claimed that a
pharmaceutical company is under a duty to supply its drug. We blogged about the other one here. These cases are interesting. They tend to illustrate how, in litigation,
you can claim almost anything. In Bartlett,
for instance, the plaintiff claimed that a company should stop selling its drug
to avoid liability. In these cases, its
the opposite. The defendant must sell its
drug to avoid liability. Its no wonder
that in all these cases the plaintiffs have lost.
In this recent case, Schubert v. Genzyme Corp., Case No. 2:12CV587DAK (D. Ut. Sept. 4, 2013), the defendant, Genzyme, manufactured a
drug called Fabrazyme, an enzyme replacement that is used by patients who have
difficulty metabolizing their lipids. Genzyme
experienced a shortage of the drug after it found a virus contamination at its
manufacturing facility. So Genzyme rationed
its supply to the market. The plaintiffs
husband received only about 70% of his ordinary dose and eventually died. Slip Op. at 2-3. Afterward, plaintiff sued and claimed that
the defendant failed to use reasonable care to ensure an adequate supply of
Fabrazyme. Unfortunate as the circumstances of this and other cases
like it may be, the court reached the only conclusion it could. Genzyme was under no affirmative duty to supply
the drug. While Utah, like many
jurisdictions, will at times impose a duty and perhaps liability upon a
defendant who has acted and brought about certain consequences (called malfeasance),
it will not do so for a mere failure to act (nonfeasance) absent some sort of
special relationship. And plaintiffs negligence
claim, at bottom, was about a failure to act, whether she claimed that Genzyme didnt
supply the drug at all or didnt supply enough:[T]he court finds no distinction
between the duty of a company that exits the market altogether and a company
that does not supply enough product to meet full market demand. In both instances, the harm is the shortage of
the medication and it is an act of nonfeasance. Genzyme should not be penalized for producing
as much of the product as it could.Slip Op. at 9-10. Plaintiff tried to work her way around this result by
arguing that Genzymes wrongdoing was not that it failed to act but, instead, that
it engaged in affirmative wrongdoing by allowing the contamination at its
manufacturing facility and then supplying the market with an insufficient
amount of Fabrazyme. To us, this argument
seems to be nothing more than a convoluted way to describe a failure to act. The court went beyond this point, however,
and addressed policy reasons why plaintiffs claim couldnt stand, particularly
with a company so heavily regulated by the FDA:[E]ven if Genzymes failure to
produce sufficient quantities of Fabrazyme was deemed to be an affirmative act
of misfeasance, the court finds that public policy considerations would weigh
heavily against finding a duty. . . . .Pharmaceutical manufacturing is
heavily regulated by federal law and there is no statutory duty placed on a
manufacturer to ensure a continued supply of any given pharmaceutical. . . . There is no federal law requiring a
manufacturer to produce amounts sufficient to meet all potential demand. In such a heavily regulated industry, if such
a duty was deemed necessary, the governing regulators would have imposed it. Moreover, it is more appropriate for such governing
regulators to create such a duty than for this court to do so. Slip Op. at 10-11.There are also fairly straight-forward public interest
reasons why requiring a drug manufacturer to meet market demand or face liability
would be counterproductive and unnecessary.
Such a rule would discourage companies from developing the drug and
entering the market in the first place for fear of facing tremendous liability
if it were to later try to exit the market.
It also would ignore the already existing market forces that give
companies incentive to meet market demand:Imposing such a duty would prevent
a manufacturer from ever ceasing production, require it to predict all potential
demand, and further require it to maintain large stockpiles to prevent any
shortages in case of production problems. Such an onerous rule is contrary to public
policy because it creates an enormous disincentive for potential providers of
pharmaceuticals from entering the market in the first place and could stifle
development of new therapies. There are
already strong incentives for pharmaceutical companies to supply drugs to all
who may need them. There is also an incentive
to maintain good relationships and a good reputation with doctors, hospitals,
and distributors by consistently meeting demand. From a business perspective, it is in the
companys best interest to meet demand in order to be profitable and maintain
customers. Despite these strong
incentives to meet supply, a variety of factors can cause a company not to meet
demand. There are technical challenges
posed by producing biologic therapies. These
cannot always be controlled despite a companys best efforts. . . . In light of the unavoidable nature of
manufacturing and supply issues, a rule requiring manufacturers to forever
supply a therapeutic or preventative treatment to everyone who is or may be
prescribed it, regardless of the cost or feasibility of doing so, would create
a significant disincentive to manufacturers that is against the public
interest. Slip Op. 11-12.Now, plaintiff didnt lose all her claims. The court gave her the opportunity, for now,
to proceed with a claim that the lower dose of Fabrazyme was more harmful than
no dose at all, as well as a claim that Genzyme failed to warn about risks
related to the lower dose. We have no
idea whether those claims are viable.
We do know, however, that the law doesnt
require drug manufacturers to supply a certain
amount of their drugs or to supply them at all. We now have a couple of cases
that say just that.