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Pharmaceutical Drug Liability: The Pros and Cons

drug liability law
Alicia Betz
May 26, 2021

A few weeks ago, I had an appointment with my pulmonologist and we worked together to come up with a plan that might better control my asthma. As we discussed medications that I’ve tried in the past, I explained that I had stopped many drugs because the side effects were worse than the asthma itself. We’re working to find a medication in which the benefits outweigh the risk of potential side effects. 

Of course, no drug is without risk. Pull out any medication insert and you’ll undoubtedly see a laundry list of potential side effects, ranging from very mild to severe and life-threatening. 

What happens when the risks of drugs outweigh the benefits or when drugs have unintended side effects? Pharmaceutical manufacturers are held liable for the products they create, but not everyone agrees with the current liability system.

What is Product Liability?

Product liability means that any company that creates a product is responsible for damage caused by the product. In the case of drugs, this typically means that pharmaceutical companies are responsible for any dangerous side effects caused by the drugs they make. Of course, these companies are required to disclose side effects and healthcare providers should only prescribe them when the benefit outweighs the potential risk. 

drug liability law

Even when pharmaceutical companies disclose side effects, they can still be subject to liability lawsuits. There are three main ways drug manufacturers can be held liable for their products: 

  • Defective manufacturing: In the case of defective manufacturing, the drug somehow becomes tainted or is not made correctly. 
  • Dangerous side effects: In the case of dangerous side effects, the drug causes very severe side effects that the company may have known about but failed to disclose. 
  • False marketing: In the case of false marketing, a drug either doesn’t have a proper warning regarding side effects or fails to include proper instructions for how to use the drug. 

Product liability for pharmaceutical drugs places the burden on the manufacturer to ensure the drug is safe. They are required to complete rigorous testing and to disclose dangers and side effects. Once they have completed this process that takes years, the drug may be approved by the Food and Drug Administration (FDA). Partly due to regulations, it often costs millions of dollars and takes over ten years to make one drug available on the market.

FDA approval does not release manufacturers from blame or responsibility, however. Legally, drugs are called “unavoidably unsafe products,” meaning people use them with the knowledge that they may not be safe. Consumers have the right to file lawsuits against manufacturers whose products have defective manufacturing, dangerous side effects, or false marketing. 

Drug liability is a highly contested topic with valid points on both sides. While some people believe drug liability provides consumers with the safest possible drugs, others claim that liability and the regulation process create barriers that prevent many useful and life-saving drugs from being manufactured. 

What Are the Pros of Product Liability for Drugs?

The first and most obvious benefit of product liability for drugs is safety. It’s estimated that 128,000 people die due to prescription drugs every year. Drugs like Elmiron and Zantac are two recent examples of unsafe products that are currently causing drug liability lawsuits. Because drugs are unavoidably unsafe products, continual monitoring for dangerous side effects is essential. 

There is also a long history of people not trusting pharmaceutical companies and for good reason. The United States is one of only two countries in the world that allows prescription drug advertising, and many consumers see these ads as proof that pharmaceutical companies only want to make money. Liability keeps pharmaceutical companies—many of which are private, for-profit corporations—in check. Liability may help consumers trust drug companies a bit more than they would otherwise.

drug liability law

Holding these companies responsible for unsafe products helps shift their focus more towards safety as well. Because they are very concerned about profit, the threat of paying for a lawsuit for an unsafe drug forces them to focus more on safety. Regulation and oversight also help catch drugs with impurities, drugs with unauthorized added ingredients, and counterfeit drugs. 

Liability also gives consumers some agency when it comes to keeping themselves and others safe. 

What Are the Cons of Product Liability for Drugs?

Of course, we can’t just hand out drugs without a full understanding of the efficacy and side effects, but many people believe product liability for drugs needs to be reformed because it’s part of a process that slows the development of new, life-saving drugs. Manufacturers’ fears regarding future liability might prevent them from creating risky but potentially beneficial drugs.

Pharmaceutical companies don’t want to spend millions of dollars developing a drug that will only result in millions more in lawsuits. This is particularly evident in rare diseases. There just aren’t as many drugs available because it’s not cost-effective for companies to spend so much time and money developing these drugs that won’t be bought en-masse. Factor in the risk of potentially paying millions in lawsuits, and developing these drugs isn’t worth the risk. 

People who are waiting for drugs for their condition often feel frustrated by the red tape that stops potential drugs from getting to them. Risk vs benefit plays a role here as well. Take chemotherapy for example: these drugs come with a laundry list of negative side effects, but the benefit is potentially saving a life. These same side effects would not be acceptable in a drug for a non-life-threatening condition. 

The threat of liability lawsuits is also part of the reason drugs are so expensive. Even if companies win liability lawsuits, the cost is still very high. Due to the threat of liability, these companies have to pay very high insurance premiums. After spending years testing and millions of dollars, the manufacturer doesn’t make any money until the drug enters the market, and once it does, that’s when a liability lawsuit is most likely to happen. 

Because clinical trials are only done in specific populations, they might miss major side effects that only occur in populations not included in the studies. Clinical trials are also unlikely to catch side effects that only develop after years of use. Manufacturers might argue this drastically cuts their profits, inherently leading to higher prices. 

What is the Future of Product Liability for Drugs?

Liability is essential for safety, but it keeps drug prices high and makes many drugs inaccessible. In the United States, there are strict rules regarding drug development and regulation that are intended to catch any harm before it happens. Liability comes into play when a drug is approved, harm is already done, and then consumers hold drugmakers accountable. 

One change that might make the drug liability system more effective would be to create a more uniform federal tort liability system. Currently, the system is different in each state, making laws confusing. 

Another welcome change would be a program similar to the National Vaccine Injury Compensation Program. This would still allow people to get compensated for any harm done by pharmaceutical drugs, but it would help keep drug costs lower by not requiring pharmaceutical manufacturers to pay for lawsuits. 


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Alicia Betz
May 26, 2021

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