European Trends in Pharmaceutical Litigation and Regulation

1. European Trends in Pharmaceutical Litigation and Regulation Duncan Fairgrieve, BIICL, 1 Crown Office Row. Stefan Lenze, BIICL, Lovells

2. Overview • Causation as an EC law concept • Update on defect • Regulatory compliance • Immunity: Pandemic flu vaccines

3. Causation – EC law concept? • Article 4 Directive 85/374/EEC (PLD) “The injured person shall be required to prove the damage, the defect and the causal relationship between the defect and damage” • Burden of proof: EC law • Standard of proof: national law • Test of causation: courts apply national law  Consistent with maximum harmonisation goal?

4. Divergent approaches to causation • Loss of chance • Presumptions • Uncertain causation and multiple potential tortfeasors • Failure to warn

5. Loss of a chance • France: broad application • UK: restrictive Gregg v Scott [2005] UKHL 2 • Germany/Austria: rejected

6. Presumptions • Germany: Drug Act 2002 • Presumption of causation if the drug is, in the individual case, capable of causing the damage • No presumption if other circumstances are also capable of causing the damage • France: • Where concordant factors indicate causal link, presumption applies.

7. Uncertain causation and multiple potential tortfeasors • UK • Fairchild v Glenhaven Funeral Services [2002] All ER 305 • Comparative law approach • Germany: • Negligence: Joint liability where co-defendants are “participants” of a tort • Drug Act: Joint liability where two or more defective drugs are capable of causing the damage • France • Cass civ 5 June 1957 – “whole group created a risk through negligent conduct.”

8. European approach to causation? • Maximum harmonisation directive • ECJ, C-52/00, Commission v France • Divergence in key areas of causation • Lack of consistency in PL cases • Common principles? • Codifcation projects • Comparative law by the Courts • ECJ: state liability • national courts: Fairchild • BIICL PL Databasehttp://www.biicl.org/plf/index.asp?contentid=700&menuid=106

9. Update on design defect • Risk-benefit test • Germany: Yes • UK: • Design cases: Abouzaid v Mothercare, Boogle v McDonald’s • Non-standard product: A v NBA • France: • traditional test of defect • Shift in recent pharma cases? (Cass civ 26 Jan 2006) • European guidance • Article 1 (28, 28a) Directive 2001/83/EC • Eudralex Guidelines

10. Regulatory compliance • Defence where defect is due to compliance with mandatory regulations Art. 7 d PLD • Otherwise, compliance with regulations indicates absence of defect • Recent case law (Germany, Austria, France) • Comparison with US law (s 4 Restatement Third) • Pre-emption defence • US Federal pre-emption • Community pre-emption • Maximum harmonisation • Common Market

11. Immunity from liability Current regulatory developments with respect to the risks of a pandemic flu outbreak

12. Pandemic flue vaccines • Public need • Design of virus and vaccine typically unclear until shortly before the vaccination period • Not suitable for normal authorisation procedure • No authorisation • Mock-up authorisation procedure

13. Pandemic flue vaccines Patient Producer Government Product liability Special legislation Contractual relations

14. Directive 2001/83/EC (amended in 2004) • Article 5 (3): Marketing authorisation holders/ manufacturers shall not be subject to civil liabilityif • damage is the consequence of medicinal product • no marketing authorisation off-label use • the use of the product is recommended or required by authority • in response to spread of pathogenic agents • Article 5 (4): Liability for defective products, as provided for by Directive 85/374/EEC, shallnot be affected by Article 5 (3)  Contradiction?

15. UK Regulation: SI 2005 No. 2759 • 3B. (2) Marketing authorisation holders/manufacturers shall not be subject to any civil liabilityif • damage is the consequence of medicinal product • no marketing authorisation/off-label use • licensing authority recommend or required use of the product • in response to spread of pathogenic agents • the use of the product in accordance with recommendation or requirement • 3B. (3) Paragraph 2 shall not apply in relation to liability under section 2 of the Consumer Protection Act 1987(a)  In line with EC law

16. German Regulation of 7 April 2006 • Marketing authorisation holders/ manufacturers shall not be subject to civil liability if • damage is the consequence of medicinal product • no marketing authorisation/off-label use • licensing authority recommend or required use of the product • in response to spread of pathogenic agents • lack of authorisation procedure is probable cause of the damage • Compliance with EC law questionable • Marketing authorisation holders/manufacturers shall be subject to liability in cases of gross negligence or intentional harm  Not in compliance with EC law

17. Pandemic flu vaccines Product liability risks • Claims in negligence excluded  No “failure to test” cause of action • Claims under strict liability provisions possible • Defect • Development risks defence • no “failure to test” claims • Contractual risk management