Counterfeit Drugs: A New Source of Product Liability?

Traditionally, however, manufacturers have at least been insulated from personal injury tort liability when counterfeit drugs cause harm: The counterfeiter alone possesses criminal intent and the manufacturer is remote to the injury. However, recently, under a number of theories, plaintiffs have alleged negligence on the part of pharmaceutical manufacturers for counterfeiting of their products. For example, a current lawsuit in St. Louis alleges that a breast cancer patient took a counterfeit form of Procrit' 20 times less potent than the genuine drug. According to a report in The San Francisco Chronicle, the attorney representing this plaintiff hopes to transform this suit into a class-action lawsuit. In another recently settled case involving the distribution of counterfeit Serostim', the only growth hormone approved by the FDA for the treatment of AIDS wasting, the lawsuit named the drug's manufacturer, along with the pharmacy and drug distributors.

The idea that a manufacturer of a pharmaceutical product could be held liable for injuries resulting from counterfeiting flies in the face of reason. After all, a counterfeiter steals sales and hard-earned goodwill from the manufacturer whose products are copied. Yet the basis for these lawsuits is simple, as explained by Professor Arthur Best of the University of Denver College of Law: If a manufacturer could have taken reasonable steps to prevent foreseeable counterfeiting but failed to, plaintiffs may argue that the manufacturer should be held liable. Best A: “Manufacturer's Responsibility for Harms Suffered by Victims of Counterfeiters: A Modern Elaboration of Causation Rules and Fundamental Tort Law,” 8 Currents Int'l Trade L.J. 43 (1999).