Drug Manufacturer Liability
in Direct-to-Consumer Marketing Cases

By Melanie R. Margolis

Open any national newspaper or magazine today and you are likely to find a full-page advertisement for a prescription drug. Turn on your television and you are likely to see a commercial touting a prescription drug. Surf the Internet and you can find web sites devoted to particular brand name drugs. Historically, prescription drugs were only marketed to physicians because they alone were making prescription drug decisions. The prescription drug market has become fiercely competitive, however, and as a result, drug manufacturers are looking for ways to increase their sales. Direct-to-consumer marketing of prescription drugs has become commonplace.

A basic regulatory requirement for television and radio broadcast advertisements for prescription drugs is that they include a thorough statement conveying all of the drug's most important risk information, including "major side effects and contraindications," in addition to providing either a brief summary of, or adequate provision for disseminating, full product labeling. More significantly, the federal Food, Drug, and Cosmetic Act specifies clearly that advertisements must contain "information in brief summary relating to side effects, contraindications, and effectiveness" of the advertised drug. 21 U.S.C. 352(n). Thus, drug manufacturers are permitted to advertise prescription drugs directly to ultimate users of the drugs, but they have a duty to warn the ultimate users of the drug's side effects. See Causes of Action Arising Out of Adverse Drug Reactions for a general explanation of drug manufacturers' liability and duty to warn.

In some instances, drug manufacturers are relieved of this duty to warn. For example, the "learned intermediary" doctrine relieves manufacturers of the duty to warn the ultimate user of a prescription drug if manufacturers provide physicians adequate risk information concerning the drug. Under this doctrine, because the physician, a "learned intermediary," intervenes (to prescribe the drug for the ultimate user), the burden to warn the ultimate user then falls to the physician instead of the manufacturer.

On August 9, 1999, the Supreme Court of New Jersey handed down a decision that profoundly increased the potential liability of drug manufacturers when prescription drugs are marketed directly to consumers. The court forged a new legal approach, deciding that drug manufacturers can be sued along with physicians for not adequately warning consumers of the side effects of a drug marketed to consumers. The opinion contains an extensive discussion of direct-to-consumer advertising, the "learned intermediary" doctrine, and the changing roles of consumers, physicians, drug manufacturers, and managed care organizations in the current health care marketplace. In Perez v. Wyeth Laboratories Inc., A-16 Sept. Term 1998, 1999 N.J. LEXIS 1000 (N.J. Aug. 9, 1999), the court held that the manufacturer of the direct-to-consumer-advertised Norplant contraceptive did not escape its duty to warn consumers by warning physicians of the drug's side effects.

In 1991, Wyeth Laboratories undertook a massive advertising campaign for Norplant contraceptive capsules, which had to be surgically implanted by a physician in a woman's upper arm. Advertisements directed at women appeared on television and in popular women's magazines. The ads did not warn of any dangers or side effects of the drug. By 1995, women were filing suits in large numbers against Wyeth Laboratories, claiming that the manufacturer failed to adequately warn women about the drug's side effects, including, to name a few, headaches, nausea, diarrhea, acne, numbness in the arms and legs, and removal complications that caused scarring.

The court held that the "learned intermediary" doctrine does not apply in cases of direct-to-consumer marketing of prescription drugs. Therefore, when manufacturers use direct-to-consumer marketing, they must adequately warn consumers, even if a physician must prescribe the drug. According to the court, the physician's intervening actions do not necessarily break the chain of causation. The court held that manufacturers may seek contribution, indemnity, or exoneration if the physician caused the consumers' harm.

The court also held that, in the context of direct-to-consumer advertising of prescription drugs, a manufacturer's compliance with Food and Drug Administration requirements for advertising, labeling, and warning creates a rebuttable presumption that the manufacturer satisfied its duty to warn consumers. The court remanded the case for a determination of whether the Norplant advertisements violated FDA requirements and whether such violation, if found, caused the plaintiffs' harm.

The dissent contends that the majority opinion rejected legislative policy that should have been followed even if such policy appeared inadequate to address the needs of the time. It will be interesting to see whether other courts follow the lead of the New Jersey Supreme Court and whether legislatures respond.

08/25/99