Practice Tip: Will the Real Drug Manufacturer Please Stand Up?

You are defending a manufacturer in a pharmaceutical product liability action. The plaintiff has testified that she obtained a prescription from her doctor for your client's medication and filled it at a reputable, national chain pharmacy. The doctor's records confirm that the prescription was written and the pharmacy records confirm that it was filled with your client's product. Normally, that scenario would dispel any doubts concerning the adequacy of product identification and you would identify other fronts on which to defend.

Never judge a book by its cover, or the contents of a bottle of prescription drug medication by its label.

Most Americans believe that our drug supply is secure and that the problem posed by counterfeit drugs only pertains to 'recreational' drugs sold on the street or through fly-by-night Internet sites. But is our supply secure? The problem may be more widespread than most Americans think. The Food and Drug Administration ('FDA') has noted an increase in its investigations of counterfeiting activities. After averaging only five counterfeit investigations per year through the late 1990s, investigations have more than quadrupled to more than 20 per year since 2000, with 30 in 2003 and 58 in 2004. The FDA has reported an 'increased sophistication in the methods used to introduce finished dosage form counterfeits into the otherwise legitimate U.S. drug distribution system.' Combating Counterfeit Drugs, A Report of the Food and Drug Adminis-tration, February 2004, www.fda.gov/oc/
initiatives/counterfeit/report02_04.html. (See 'Looks Can Be Deceiving,' Minsk, Gardner, LJN's Product Liability Law & Strategy, October 2005.)

Even a cursory review of the headlines reveals that counterfeiters are targeting not only recreational drugs, but also all classes of drugs, in particular, chronic use medications taken by people for a variety of ailments. Likewise, the counterfeit drugs are not just being bought illegally or from dubious Internet sources, but rather from the legitimate pharmacy down the street.

What does this mean for the product liability lawyer?

Manufacturer Responsibility for Counterfeit Product

It is a basic tenet of product liability law that anyone in the chain of distribution may be held liable for a defective product. The Restatement (Third) of Torts specifically addresses liability for defective drugs and devices stating that '[a] manufacturer of a prescription drug or medical device who sells or otherwise distributes a defective drug or device is subject to liability for harm to persons caused by the defect.' Restatement (Third) of Torts, '6, 1998. If, however, you are representing the manufacturer of a product that has been counterfeited, that manufacturer has neither designed, manufactured, sold, nor otherwise distributed that product, and is therefore not liable for harm caused by the product under traditional theories of law. Given the percentage of counterfeit drugs that have infiltrated legitimate distribution sources, one cannot accept product identification testimony at face value.

The non-liability of a manufacturer for harm caused by counterfeits of its products was recently discussed in Ashworth v. Albers Medical, Inc., 2005 U.S. Dist. LEXIS 22600 (D. W.Va. Aug. 23, 2005). In Ashworth, the plaintiff sued Pfizer, along with a distributor, reseller, and repackager, alleging that she was harmed as a result of taking counterfeit Lipitor', a cholesterol-lowering drug.

The plaintiff acknowledged that the product she took was counterfeit. Nonetheless, she advanced several theories against Pfizer, including claims for strict tort liability, breach of warranty, violations of the West Virginia Consumer Protection Act, fraud, negligence, conspiracy, and intentional infliction of emotional distress. In granting Pfizer's motion to dismiss, the court noted that essential to the claims of strict liability, breach of warranty, and violation of the Consumer Protection Act was a showing that Pfizer placed the product into the chain of distribution. The court found that plaintiff's pleading, on its face, admitted that Pfizer played no such role and neither manufactured nor distributed the counterfeit Lipitor. As such, the court granted Pfizer's motion to dismiss those counts of the complaint.

The court next addressed the remaining claims of fraud, conspiracy, and intentional infliction of emotional distress. The court determined that the plaintiff's fraud claim must fail because the plaintiff failed to plead fraud with particularity. The court noted that the plaintiff's allegation that Pfizer's general advertising of Lipitor was fraudulent was insufficient to withstand dismissal, finding that '[a]ny such representation made by Pfizer as to LIPITOR pertains to a product which plaintiff does not allege she specifically bought.' Rather, the plaintiff acknowledged that she did not buy Pfizer's product. The court also found that there was no evidence that Pfizer was engaged in the counterfeit conspiracy.

The court likewise disposed of the plaintiff's negligence claim. The court noted that selling a counterfeit drug product is a violation of the Federal Food, Drug & Cosmetic Act, and that Pfizer had no duty to protect the plaintiff from the deliberate criminal conduct of the counterfeiters. The court also rejected the plaintiff's argument that Pfizer should have taken steps to prevent the reasonably foreseeable risk of counterfeiting. The court relied upon well-established law that a manufacturer does not have a duty to anticipate and prevent criminal tampering or counterfeiting.

Manufacturer Responsibility for Adulterated Product

It seems obvious that, in regard to Pfizer, the Ashworth decision was correct. Pfizer did not manufacture or sell the product taken by the plaintiff and should not be held accountable for the criminal conduct of others. However, does this reasoning apply to an adulterated product? Does the result change where the manufacturer places a product into the chain of distribution that is subsequently adulterated or otherwise misbranded prior to reaching the consumer?

In Fagan v. AmerisourceBergen, 356 F. Supp. 2d 198 (E.D.N.Y. 2004), the court addressed the issue of post-distribution adulteration. On July 29, 2004, the court granted a drug manufacturer's motion to dismiss a plaintiff's claim against it for injuries sustained after receiving injections of a drug allegedly manufactured by the company.

The plaintiff, Timothy Fagan, who was 16 at the time, was prescribed the drug Epogen' after undergoing a liver transplant in 2002. Epogen, which is manufactured by Amgen, is a drug indicated for the treatment of anemia. As part of his treatment, the plaintiff injected himself with the drug, at a dosage of 40,000 units per milliliter, once a week. Plaintiff purchased Epogen from CVS Procare, a subsidiary of CVS, and received it via mail. CVS Procare purchased the drug from AmerisourceBergen Corporation, a major wholesale distributor.

The plaintiff claimed that after repeated injections of the drug between February and April 2002, his anemia worsened and he began to experience painful side effects. In May 2002, the drug's manufacturers posted a letter on its Web site warning about the presence of adulterated Epogen in the marketplace and indicating the adulterated drug's lot number. During the same month, CVS Procare called the plaintiff to inform him about the adulterated drugs. According to the plaintiff, during this time he received and used two shipments of the drug, the dosages of which contained only one-twentieth of the prescribed dosage.

In August of 2003, the plaintiff commenced an action against Amgen, AmerisourceBergen Corp. ('ABC'), and CVS Corporation/CVS Procare (the manufacturer, wholesale distributor, and retailers, respectively) to recover damages for personal injuries allegedly sustained as a result of the weekly injections. The plaintiff claimed that all the defendants were in the chain of distribution, and therefore all owed him a duty of reasonable care. According to the plaintiff, the defendants violated this duty by failing to secure the products in the chain. All three defendants moved to dismiss the complaint for failure to state a claim.

In an opinion authored by Judge Sandra J. Feuerstein, the court granted Amgen's motion and dismissed the case entirely as against the manufacturer. The court, however, denied the distributor's and retailer's claims for dismissal, holding that the distributor's practice of purchasing drugs on the so-called 'gray market' would render foreseeable the possibility of some of those drugs being adulterated or counterfeit.

With respect to Amgen, the court acknowledged that in general, 'a manufacturer does not have a duty to anticipate and prevent criminal conduct by third parties, or to design its products in such a way as to anticipate and frustrate criminal tampering.' Id. at 207. Once a product leaves the hands of the manufacturer, a manufacturer may not be held liable for a subsequent modification to the product by a third party.

Distributor Liability for Counterfeit or Adulterated Product

Unlike the manufacturer, the distributor of a counterfeit or adulterated product is squarely within the chain of distribution and can be held responsible for its sale. In Fagan, ABC, the wholesale distributor of the adulterated Epogen, argued that the plaintiff's negligence claim should be dismissed because the distributor did not have a duty to protect the plaintiff from harm directly caused by the criminal conduct of an unrelated third party. The plaintiff countered that ABC did have a duty to refrain from receiving or delivering into commerce a misbranded or counterfeit drug in contravention of the Federal Food Drug & Cosmetic Act. The plaintiff further contended that ABC's affirmative act of obtaining drugs of unknown origins via the 'gray market' directly contributed to his harm.

The court applied a five-factor test in determining that ABC owed the plaintiff a duty. The court found 1) that the plaintiff could have reasonably anticipated that the heavy regulation of the pharmaceutical industry was for the protection of the consumers of prescription drugs; 2) the court determined there would be no proliferation of claims as the pool of potential plaintiffs was restricted to those who had suffered actual personal injuries as a result of taking the counterfeit or adulterated drugs; 3) the court found that there was no likelihood of unlimited or insurer-like liability because the plaintiff's claims were for direct personal injuries and ABC would only be liable if the plaintiff could sustain his burden of proof; 4) ABC, as a distributor of the product, was in the best position to protect the plaintiff against the harm; and 5) the court noted that the imposition of a duty upon ABC would not expand or create new channels of liability as it already had an obligation to refrain from delivering or receiving counterfeit or adulterated drug products. The court further reasoned that requiring ABC to comply with federal regulations could result in a decrease in the sales of counterfeit or misbranded drugs by minimizing the demand for 'gray market' drugs.

ABC further argued that even if it had a duty, there was a lack of proximate cause because the plaintiff's injuries were caused by the intervening criminal acts of the counterfeiters. The court rejected this argument, noting that in order to break the causal chain, the intervening criminal act must be extraordinary and unforeseeable. Because the intervening criminal act in this case was arguably foreseeable, the court determined that such questions were best left to a jury.

Seller Responsibility for Counterfeit or Adulterated Product

In contrast to the wholesaler, CVS ProCare, did not purchase product on the 'gray market' but rather from a national wholesaler. CVS ProCare had every reason to expect that the product delivered to it came from a reputable source. Indeed, the Fagan court acknowledged that 'absent an allegation that a pharmacy failed to fill a prescription precisely as directed by the manufacturer and/or physician, or that the plaintiff had a condition of which the pharmacist was aware,' New York courts have declined to hold the pharmacy liable under theories of negligence, breach of warranty, or strict liability. Id. at 213. New York courts have generally required plaintiffs to establish that the pharmacist breached his or her duty 'to exercise the highest practicable degree of prudence, thoughtfulness and vigilance and the most exact and reliable safeguards consistent with the reasonable conduct of business.' Id.

The court construed the plaintiff's complaint to allege that CVS ProCare failed to fill the plaintiff's prescription precisely as directed (the dosage actually delivered to the plaintiff was 1/20th of the dosage actually prescribed). The court also cited allegations in the complaint imputing CVS ProCare with the knowledge that some misbranded or counterfeit drugs may have been purchased on the gray market. Further differentiating this case from prior cases asserting negligence on the part of a pharmacy was the presence of a facially defective label. Before CVS ProCare filled plaintiff's prescription, the product's manufacturer had warned that counterfeit vials of Epogen could be identified by the missing round 'degree' symbols on the label. The court determined that CVS ProCare's potentially negligent conduct, including its failure to inspect the label of the drug product purchased from ABC, was sufficient evidence to preclude its dismissal from the case. The court concluded that with respect to the negligence claim, the retailer had failed to demonstrate that it had exercised 'the highest practicable degree of prudence, thoughtfulness, and vigilance' in dispensing a drug with a label that was allegedly 'facially defective.'

The plaintiff also asserted a claim against the seller for breach of the implied warranty of merchantability. As with all warranty claims, the central inquiry is whether the product was 'fit for the ordinary purposes for which such goods are used.' The only New York court to address the applicability of an implied warranty claim against a pharmacy denied the plaintiff's claim. In that case, the court reasoned that when consumers go to pharmacies to have their prescriptions filled, they do not question the pharmacist as to whether the drug is inherently fit for its intended purpose. Rather, consumers place that confidence and reliance in their prescribing physicians. The court in Fagan distinguished this case by citing to the lack of evidence in that case that the product in question was adulterated, misbranded, or otherwise defective. Accordingly, the court allowed the plaintiff to proceed against CVS ProCare for a claim of breach of implied warranty.

The Bottom Line

The influx of counterfeit pharmaceuticals into otherwise reputable chains of distribution has changed the landscape of product liability litigation. Target defendants have shifted. Pharmacies and wholesalers, once considered downstream suppliers, are now potentially faced with primary liability, while manufacturers may have defenses that were not originally apparent.

Pharmaceutical cases may now turn, not on the strength of the science, but rather on the preliminary issue of product identification. Defense attorneys should exercise caution prior to accepting product identification testimony at face value. If the product is available at the time the claim is filed, most companies will be able to determine whether the product is authentic. If no product remains, then inquiry should be made concerning its disposition, as spoliation issues may arise.

Given the potential lengthy delay between product ingestion and subsequent litigation, it may be extremely difficult to trace a product back to the manufacturer. Many states have, however, enacted pedigree laws that require a written chain of custody to accompany the product from the manufacturer or an authorized distributor of record to the pharmacy or physician dispensing the medication. Attorneys practicing in states that require a drug pedigree should propound the necessary discovery to obtain that documentation and review it carefully for any irregularities.

The federal and state governments are making efforts to quell the rising threat posed by counterfeit drugs, but the battle has just begun. Attorneys must therefore remain vigilant in assessing product identification evidence; the consequences of failure to do so just might be a bitter pill to swallow.

Frank Fazio is a principal of Porzio, Bromberg & Newman, P.C., Morristown, NJ, and is a member of the firm's Pharmaceutical & Medical Device Litigation and Pharmaceutical Marketing & Sales Compliance Litigation Departments. Sarina D. Rivera is an associate in the firm's Morristown, NJ, office and is member of its Pharmaceutical Marketing & Sales Compliance and Litigation Department.

You are defending a manufacturer in a pharmaceutical product liability action. The plaintiff has testified that she obtained a prescription from her doctor for your client's medication and filled it at a reputable, national chain pharmacy. The doctor's records confirm that the prescription was written and the pharmacy records confirm that it was filled with your client's product. Normally, that scenario would dispel any doubts concerning the adequacy of product identification and you would identify other fronts on which to defend.

Never judge a book by its cover, or the contents of a bottle of prescription drug medication by its label.

Most Americans believe that our drug supply is secure and that the problem posed by counterfeit drugs only pertains to 'recreational' drugs sold on the street or through fly-by-night Internet sites. But is our supply secure? The problem may be more widespread than most Americans think. The Food and Drug Administration ('FDA') has noted an increase in its investigations of counterfeiting activities. After averaging only five counterfeit investigations per year through the late 1990s, investigations have more than quadrupled to more than 20 per year since 2000, with 30 in 2003 and 58 in 2004. The FDA has reported an 'increased sophistication in the methods used to introduce finished dosage form counterfeits into the otherwise legitimate U.S. drug distribution system.' Combating Counterfeit Drugs, A Report of the Food and Drug Adminis-tration, February 2004, www.fda.gov/oc/
initiatives/counterfeit/report02_04.html. (See 'Looks Can Be Deceiving,' Minsk, Gardner, LJN's Product Liability Law & Strategy, October 2005.)

Even a cursory review of the headlines reveals that counterfeiters are targeting not only recreational drugs, but also all classes of drugs, in particular, chronic use medications taken by people for a variety of ailments. Likewise, the counterfeit drugs are not just being bought illegally or from dubious Internet sources, but rather from the legitimate pharmacy down the street.

What does this mean for the product liability lawyer?

Manufacturer Responsibility for Counterfeit Product

It is a basic tenet of product liability law that anyone in the chain of distribution may be held liable for a defective product. The Restatement (Third) of Torts specifically addresses liability for defective drugs and devices stating that '[a] manufacturer of a prescription drug or medical device who sells or otherwise distributes a defective drug or device is subject to liability for harm to persons caused by the defect.' Restatement (Third) of Torts, '6, 1998. If, however, you are representing the manufacturer of a product that has been counterfeited, that manufacturer has neither designed, manufactured, sold, nor otherwise distributed that product, and is therefore not liable for harm caused by the product under traditional theories of law. Given the percentage of counterfeit drugs that have infiltrated legitimate distribution sources, one cannot accept product identification testimony at face value.

The non-liability of a manufacturer for harm caused by counterfeits of its products was recently discussed in Ashworth v. Albers Medical, Inc., 2005 U.S. Dist. LEXIS 22600 (D. W.Va. Aug. 23, 2005). In Ashworth, the plaintiff sued Pfizer, along with a distributor, reseller, and repackager, alleging that she was harmed as a result of taking counterfeit Lipitor', a cholesterol-lowering drug.

The plaintiff acknowledged that the product she took was counterfeit. Nonetheless, she advanced several theories against Pfizer, including claims for strict tort liability, breach of warranty, violations of the West Virginia Consumer Protection Act, fraud, negligence, conspiracy, and intentional infliction of emotional distress. In granting Pfizer's motion to dismiss, the court noted that essential to the claims of strict liability, breach of warranty, and violation of the Consumer Protection Act was a showing that Pfizer placed the product into the chain of distribution. The court found that plaintiff's pleading, on its face, admitted that Pfizer played no such role and neither manufactured nor distributed the counterfeit Lipitor. As such, the court granted Pfizer's motion to dismiss those counts of the complaint.

The court next addressed the remaining claims of fraud, conspiracy, and intentional infliction of emotional distress. The court determined that the plaintiff's fraud claim must fail because the plaintiff failed to plead fraud with particularity. The court noted that the plaintiff's allegation that Pfizer's general advertising of Lipitor was fraudulent was insufficient to withstand dismissal, finding that '[a]ny such representation made by Pfizer as to LIPITOR pertains to a product which plaintiff does not allege she specifically bought.' Rather, the plaintiff acknowledged that she did not buy Pfizer's product. The court also found that there was no evidence that Pfizer was engaged in the counterfeit conspiracy.

The court likewise disposed of the plaintiff's negligence claim. The court noted that selling a counterfeit drug product is a violation of the Federal Food, Drug & Cosmetic Act, and that Pfizer had no duty to protect the plaintiff from the deliberate criminal conduct of the counterfeiters. The court also rejected the plaintiff's argument that Pfizer should have taken steps to prevent the reasonably foreseeable risk of counterfeiting. The court relied upon well-established law that a manufacturer does not have a duty to anticipate and prevent criminal tampering or counterfeiting.

Manufacturer Responsibility for Adulterated Product

It seems obvious that, in regard to Pfizer, the Ashworth decision was correct. Pfizer did not manufacture or sell the product taken by the plaintiff and should not be held accountable for the criminal conduct of others. However, does this reasoning apply to an adulterated product? Does the result change where the manufacturer places a product into the chain of distribution that is subsequently adulterated or otherwise misbranded prior to reaching the consumer?

In Fagan v. AmerisourceBergen , 356 F. Supp. 2d 198 (E.D.N.Y. 2004), the court addressed the issue of post-distribution adulteration. On July 29, 2004, the court granted a drug manufacturer's motion to dismiss a plaintiff's claim against it for injuries sustained after receiving injections of a drug allegedly manufactured by the company.

The plaintiff, Timothy Fagan, who was 16 at the time, was prescribed the drug Epogen' after undergoing a liver transplant in 2002. Epogen, which is manufactured by Amgen, is a drug indicated for the treatment of anemia. As part of his treatment, the plaintiff injected himself with the drug, at a dosage of 40,000 units per milliliter, once a week. Plaintiff purchased Epogen from CVS Procare, a subsidiary of CVS, and received it via mail. CVS Procare purchased the drug from AmerisourceBergen Corporation, a major wholesale distributor.

The plaintiff claimed that after repeated injections of the drug between February and April 2002, his anemia worsened and he began to experience painful side effects. In May 2002, the drug's manufacturers posted a letter on its Web site warning about the presence of adulterated Epogen in the marketplace and indicating the adulterated drug's lot number. During the same month, CVS Procare called the plaintiff to inform him about the adulterated drugs. According to the plaintiff, during this time he received and used two shipments of the drug, the dosages of which contained only one-twentieth of the prescribed dosage.

In August of 2003, the plaintiff commenced an action against Amgen, AmerisourceBergen Corp. ('ABC'), and CVS Corporation/CVS Procare (the manufacturer, wholesale distributor, and retailers, respectively) to recover damages for personal injuries allegedly sustained as a result of the weekly injections. The plaintiff claimed that all the defendants were in the chain of distribution, and therefore all owed him a duty of reasonable care. According to the plaintiff, the defendants violated this duty by failing to secure the products in the chain. All three defendants moved to dismiss the complaint for failure to state a claim.

In an opinion authored by Judge Sandra J. Feuerstein, the court granted Amgen's motion and dismissed the case entirely as against the manufacturer. The court, however, denied the distributor's and retailer's claims for dismissal, holding that the distributor's practice of purchasing drugs on the so-called 'gray market' would render foreseeable the possibility of some of those drugs being adulterated or counterfeit.

With respect to Amgen, the court acknowledged that in general, 'a manufacturer does not have a duty to anticipate and prevent criminal conduct by third parties, or to design its products in such a way as to anticipate and frustrate criminal tampering.' Id. at 207. Once a product leaves the hands of the manufacturer, a manufacturer may not be held liable for a subsequent modification to the product by a third party.

Distributor Liability for Counterfeit or Adulterated Product

Unlike the manufacturer, the distributor of a counterfeit or adulterated product is squarely within the chain of distribution and can be held responsible for its sale. In Fagan, ABC, the wholesale distributor of the adulterated Epogen, argued that the plaintiff's negligence claim should be dismissed because the distributor did not have a duty to protect the plaintiff from harm directly caused by the criminal conduct of an unrelated third party. The plaintiff countered that ABC did have a duty to refrain from receiving or delivering into commerce a misbranded or counterfeit drug in contravention of the Federal Food Drug & Cosmetic Act. The plaintiff further contended that ABC's affirmative act of obtaining drugs of unknown origins via the 'gray market' directly contributed to his harm.

The court applied a five-factor test in determining that ABC owed the plaintiff a duty. The court found 1) that the plaintiff could have reasonably anticipated that the heavy regulation of the pharmaceutical industry was for the protection of the consumers of prescription drugs; 2) the court determined there would be no proliferation of claims as the pool of potential plaintiffs was restricted to those who had suffered actual personal injuries as a result of taking the counterfeit or adulterated drugs; 3) the court found that there was no likelihood of unlimited or insurer-like liability because the plaintiff's claims were for direct personal injuries and ABC would only be liable if the plaintiff could sustain his burden of proof; 4) ABC, as a distributor of the product, was in the best position to protect the plaintiff against the harm; and 5) the court noted that the imposition of a duty upon ABC would not expand or create new channels of liability as it already had an obligation to refrain from delivering or receiving counterfeit or adulterated drug products. The court further reasoned that requiring ABC to comply with federal regulations could result in a decrease in the sales of counterfeit or misbranded drugs by minimizing the demand for 'gray market' drugs.

ABC further argued that even if it had a duty, there was a lack of proximate cause because the plaintiff's injuries were caused by the intervening criminal acts of the counterfeiters. The court rejected this argument, noting that in order to break the causal chain, the intervening criminal act must be extraordinary and unforeseeable. Because the intervening criminal act in this case was arguably foreseeable, the court determined that such questions were best left to a jury.

Seller Responsibility for Counterfeit or Adulterated Product

In contrast to the wholesaler, CVS ProCare, did not purchase product on the 'gray market' but rather from a national wholesaler. CVS ProCare had every reason to expect that the product delivered to it came from a reputable source. Indeed, the Fagan court acknowledged that 'absent an allegation that a pharmacy failed to fill a prescription precisely as directed by the manufacturer and/or physician, or that the plaintiff had a condition of which the pharmacist was aware,' New York courts have declined to hold the pharmacy liable under theories of negligence, breach of warranty, or strict liability. Id. at 213. New York courts have generally required plaintiffs to establish that the pharmacist breached his or her duty 'to exercise the highest practicable degree of prudence, thoughtfulness and vigilance and the most exact and reliable safeguards consistent with the reasonable conduct of business.' Id.

The court construed the plaintiff's complaint to allege that CVS ProCare failed to fill the plaintiff's prescription precisely as directed (the dosage actually delivered to the plaintiff was 1/20th of the dosage actually prescribed). The court also cited allegations in the complaint imputing CVS ProCare with the knowledge that some misbranded or counterfeit drugs may have been purchased on the gray market. Further differentiating this case from prior cases asserting negligence on the part of a pharmacy was the presence of a facially defective label. Before CVS ProCare filled plaintiff's prescription, the product's manufacturer had warned that counterfeit vials of Epogen could be identified by the missing round 'degree' symbols on the label. The court determined that CVS ProCare's potentially negligent conduct, including its failure to inspect the label of the drug product purchased from ABC, was sufficient evidence to preclude its dismissal from the case. The court concluded that with respect to the negligence claim, the retailer had failed to demonstrate that it had exercised 'the highest practicable degree of prudence, thoughtfulness, and vigilance' in dispensing a drug with a label that was allegedly 'facially defective.'

The plaintiff also asserted a claim against the seller for breach of the implied warranty of merchantability. As with all warranty claims, the central inquiry is whether the product was 'fit for the ordinary purposes for which such goods are used.' The only New York court to address the applicability of an implied warranty claim against a pharmacy denied the plaintiff's claim. In that case, the court reasoned that when consumers go to pharmacies to have their prescriptions filled, they do not question the pharmacist as to whether the drug is inherently fit for its intended purpose. Rather, consumers place that confidence and reliance in their prescribing physicians. The court in Fagan distinguished this case by citing to the lack of evidence in that case that the product in question was adulterated, misbranded, or otherwise defective. Accordingly, the court allowed the plaintiff to proceed against CVS ProCare for a claim of breach of implied warranty.

The Bottom Line

The influx of counterfeit pharmaceuticals into otherwise reputable chains of distribution has changed the landscape of product liability litigation. Target defendants have shifted. Pharmacies and wholesalers, once considered downstream suppliers, are now potentially faced with primary liability, while manufacturers may have defenses that were not originally apparent.

Pharmaceutical cases may now turn, not on the strength of the science, but rather on the preliminary issue of product identification. Defense attorneys should exercise caution prior to accepting product identification testimony at face value. If the product is available at the time the claim is filed, most companies will be able to determine whether the product is authentic. If no product remains, then inquiry should be made concerning its disposition, as spoliation issues may arise.

Given the potential lengthy delay between product ingestion and subsequent litigation, it may be extremely difficult to trace a product back to the manufacturer. Many states have, however, enacted pedigree laws that require a written chain of custody to accompany the product from the manufacturer or an authorized distributor of record to the pharmacy or physician dispensing the medication. Attorneys practicing in states that require a drug pedigree should propound the necessary discovery to obtain that documentation and review it carefully for any irregularities.

The federal and state governments are making efforts to quell the rising threat posed by counterfeit drugs, but the battle has just begun. Attorneys must therefore remain vigilant in assessing product identification evidence; the consequences of failure to do so just might be a bitter pill to swallow.

Frank Fazio is a principal of Porzio, Bromberg & Newman, P.C., Morristown, NJ, and is a member of the firm's Pharmaceutical & Medical Device Litigation and Pharmaceutical Marketing & Sales Compliance Litigation Departments. Sarina D. Rivera is an associate in the firm's Morristown, NJ, office and is member of its Pharmaceutical Marketing & Sales Compliance and Litigation Department.