Five Major Drug & Medical Device Developments of 2024

At a Glance

• The California Court of Appeals effectively imposed a duty on manufacturers to develop and commercialize an alternative product without delay if it is safer for a subset of consumers. The California Supreme Court has granted the petition for review, and drug and device manufacturers will want to keep a close eye on this case and its developments.
• The European Council has adopted the European Union’s new Product Liability Directive. Product manufacturers, including manufacturers of software, AI and other digital products, should be preparing for this eventuality now and familiarize themselves with the key terms of the new directive.
• The proposed Federal Rule of Civil Procedure 16.1 is under consideration by the U.S. Supreme Court, which has until May 1, 2025, to adopt the rule. Assuming adoption, and absent congressional action, the new Rule 16.1 would take effect on December 1, 2025. Drug and device manufacturers facing MDL proceedings should keep an eye on this rule in the new year.
• In June 2024, the California Supreme Court created a new causation standard in failure-to-warn cases involving prescription drug and medical device manufacturers. Drug and device manufacturers litigating in California courts should consider expanding their discovery to focus on a physician’s decision to advise patients on the product and on a patient’s medical history when determining the objectively prudent patient standard.
• This year was notable for interpretations of amended Federal Rule of Evidence 702 in recent cases and some resulting trends. Drug and device manufacturers should expect federal courts to treat expert testimony and opinions with increased scrutiny regarding their qualifications and methodologies, and expert opinions that involve more subjective conclusions will especially run the risk of being excluded.

As we ring in the new year, it is time, once again, to reflect on some of the most significant legal developments for drug and device companies this year. Below is a brief recap and assessment of a few of the top developments affecting drug and device law that came out of 2024.

1. California Courts Examine a Manufacturer’s Duty to Innovate

In January of 2024, the California Court of Appeals effectively imposed a “duty to innovate” on the manufacturer of a drug used to treat HIV.¹ Under the common law, manufacturers are expected to produce reasonably safe and nondefective products. The plaintiffs took this a step further and asserted that, although the product was not defective, the defendant was negligent by failing to bring a different but allegedly safer drug to market sooner.² Ultimately, the Court of Appeals agreed, thereby imposing a duty on manufacturers to develop and commercialize an alternative product without delay if it is safer for a subset of consumers.

This decision raises questions about whether a product being “reasonably safe” is sufficient to avoid legal claims, in light of the fact that this opinion effectively eliminated the black letter requirement of proof of product defect. Opponents of this decision argue that expanding product liability law in this way may discourage manufacturers from researching and developing ways to improve their products since early research could form the basis for lawsuits, with a potentially chilling effect on research and development that would ultimately harm patients and consumers. The decision also has practical implications for potential jury trials, as juries would be required to assess when a manufacturer “knew” an alternative pharmaceutical or medical device was “safer and at least equally effective.”

On May 1, 2024, the California Supreme Court granted the petition for review of the Court of Appeals’ decision. Briefing for the California Supreme Court began in July of this year, but oral arguments have not yet been set.³ Drug and device manufacturers will want to keep a close eye on this case and its developments.

2. The European Union Adopts the New Product Liability Directive

On October 10, 2024, our friends across the pond (the European Council) adopted the European Union’s new Product Liability Directive. This development has major implications for future potential product liability actions brought within the European Union, including, for example, by expanding what is included in the definition of “product,” creating presumptions of defect and shifting the burden of proof to defendants, changing disclosure requirements, and creating an optional affirmative defense.

Perhaps most notably, the directive shifts the burden of proof to defendants by presuming a defect or causal link between a defect and damage when certain conditions are present. Specifically, a product will be presumed defective if the manufacturer fails to comply with the obligation to disclose information, the product does not comply with mandatory safety requirements, or damage is caused by an obvious product malfunction. Likewise, causation will be presumed if the damage is typically consistent with the defect in question or the technical or scientific complexity causes excessive difficulty in proving liability. Under the new directive, defendants are also now required to disclose any documentation that is “necessary and proportionate” for the claimant to support its claim while claimants only need to provide “facts and evidence sufficient to support the plausibility of the claim.”⁴ In addition, a manufacturer may now assert a “state of the art” affirmative defense that, due to the “objective states of scientific and technical knowledge,” the alleged defect could not have been discoverable when the product was placed on the market.⁵ Manufacturers should note, however, that member states have the discretion to omit this defense when adopting the directive if it is incompatible with the state’s national law.⁶ Finally, the new product liability directive expands the definition of “product” to bring the definition up to speed with the digital age. The new definition now covers software, including software updates and artificial intelligence, digital manufacturing files, and digital services.

The directive came into full force on December 9, 2024; and EU member states now have two years, until December 9, 2026, to transpose the directive into national law. Experts expect that, as the directive is adopted by member states, this will impact product liability litigation in the EU by making it easier for plaintiffs to bring lawsuits there, with an anticipated resulting increase in product liability actions in the EU. Product manufacturers, including manufacturers of software, AI and other digital products, should be preparing for this eventuality now and familiarize themselves with the key terms of the new directive.

3. Federal Rule of Civil Procedure 16.1

This year also brought a federal rule change directed specifically at multidistrict litigation (MDL). In June 2024, the Judicial Conference’s Advisory Committee on Civil Rules met and approved Rule 16.1, the first Federal Rule of Civil Procedure that specifically focuses on MDL proceedings. The Advisory Committee advanced the new rule to assist in efficiently managing multidistrict litigation, addressing meritless claims, and preserving the discretion and flexibility of transferee courts.

Under the new proposed Rule 16.1, a case management report, initial case management conference and exchange of certain information are required. More specifically, parties must prepare and submit a report that includes their views on potential case management issues. The MDL courts must then consider the parties’ report when creating the initial case management plan. Rule 16.1 contemplates that the case management report and initial case management conference should address a number of specific topics, including whether to appoint leadership council, the structure of any leadership council, the schedule for additional case management conferences, the procedure for managing new actions in the MDL, whether to prepare consolidated pleadings, and how and when to exchange information about claims and defenses. Additionally, the rule formalizes the expectation that information relating to the factual basis for claims and defenses be exchanged early on, in an attempt to weed out meritless claims. Notably, however, the Advisory Committee purposely preserved the flexibility of MDL courts by using words like “should” and “may” when describing these expectations. This gives the MDL court the discretion to manage the proceedings while taking into consideration the specific needs of the case. Experts point out that the new rule, as it stands, acts more like guidance for MDL courts and stress that the variability in management and uncertainty in MDLs continues to exist.

The rule is now under consideration by the U.S. Supreme Court, which has until May 1, 2025, to adopt the rule. Assuming adoption, and absent congressional action, the new Rule 16.1 would take effect on December 1, 2025. Drug and device manufacturers facing MDL proceedings should keep an eye on this rule in the new year.

4. California Supreme Court Contends With New Causation Standard for Failure-to-Warn Claims

In June 2024, the California Supreme Court decided Himes v. Somatics, LLC, in which the court reaffirmed the learned intermediary doctrine but created a new causation standard in failure-to-warn cases involving prescription drug and medical device manufacturers.⁷

Under the learned intermediary doctrine, the duty to warn of risks associated with drugs and medical devices extends to physicians, but not the patients themselves. In the underlying case, the plaintiff alleged that a device manufacturer failed to adequately warn of the risk of permanent brain damage and memory loss associated with its electroconvulsive therapy (ECT) device. The Central District of California concluded that the traditional learned intermediary doctrine applied and granted the defendant’s motion for summary judgment, determining that the plaintiff did not provide adequate evidence showing that their physician’s decision to use ECT would have been different had they been given an adequate warning. On appeal, the Ninth Circuit determined that, while no reasonable juror could have found that the plaintiff’s physician would have altered his decision to prescribe the treatment, there was a genuine dispute of material fact as to whether the physician “would have learned of stronger warnings and communicated them to the plaintiff.”⁸ The Ninth Circuit therefore affirmed that the learned intermediary doctrine applied, but concluded that the case’s outcome would depend on the causation standard to be applied to plaintiff’s claims.

The Ninth Circuit certified a question to the California Supreme Court seeking clarity on what causation standard should be applied — i.e., whether a plaintiff must show a stronger risk warning would have altered the physician’s decision to prescribe the product, or whether a plaintiff must show that the physician would have communicated the stronger risk warning to the plaintiff and the plaintiff would thereafter have declined the treatment as a result.⁹ In response to the Ninth Circuit’s question, the California Supreme Court decisively affirmed that under the learned intermediary doctrine, a manufacturer’s duty to warn runs to the physician and not to the patient. But the state Supreme Court went on and set out a new causation standard to be applied in such cases. Specifically, the Court held that a plaintiff can establish causation by showing that “the physician would have communicated the stronger warning to the patient and an objectively prudent person in the patient’s position would have thereafter declined the treatment.”¹⁰ Additionally, the state Supreme Court held that the Ninth Circuit was correct in adopting the objective standard of “whether an objectively prudent person in the patient’s position would have refused the treatment even though his or her physician would have still recommended the treatment.”¹¹ Specifically, the court reasoned that while the physician’s role and their recommendations are central to the analysis, the patient ultimately decides whether to proceed with the recommended treatment and is therefore relevant.

The California Supreme Court left open the question of whether the chain of causation is broken when a physician would not have read or otherwise been alerted of a stronger warning. In September of this year, the Northern District of California was the first to apply the California Supreme Court’s rulings from Himes. The district court in that case held that the chain of causation is broken under such circumstances and reasoned that if a physician did not rely on materials from the manufacturer, a stronger warning would not have impacted the physician’s decision to prescribe the treatment nor their counseling of the patient.

Drug and device manufacturers litigating in California courts should keep the Himes holdings and factors in mind, even early on in litigation. Going forward, manufacturers should consider expanding their discovery to focus on the physician’s decision to advise their patients on the product and on the patient’s medical history when determining the objectively prudent patient standard.

5. Courts’ Application of the New Rule 702

Last December, the Advisory Committee on Civil Rules amended Federal Rule of Evidence 702 to clarify and emphasize the essential role of judges as “gatekeepers” for expert testimony and to provide a tool for ensuring only rigorous scientific evidence is presented at trial. Much has been written about interpretation of the new Rule 702, and we won’t add to that chorus here. But 2024 was notable for the interpretations of Rule 702 that have emerged in recent cases and some of the trends we’re seeing as a result. Below, we highlight a few of those decisions from this year.

In 2024, several courts cited the 2023 amendment in their decisions to exclude expert testimony. For example, in In re Acetaminophen, the Southern District of New York cited the amendment in its analysis granting the defendants’ motion to exclude all five of the plaintiffs’ causation experts and concluded that the plaintiffs had not satisfied their burden of showing that their expert’s opinions reflected “a reliable application of the principles and methods to the facts of the case.”¹² Specifically, the court found that the experts had used “transdiagnostic approaches” that combined literature on in utero exposure to acetaminophen and Autism Spectrum Disorder (ASD) and Attention-Deficit Hyperactivity Disorder (ADHD), even though, the court found, those two neurodevelopmental disorders are “undeniably distinct.”¹³ Further, the court determined that the experts in that case had inconsistent explanations for which studies were included or omitted. In fact, one of the omitted studies was one that was co-authored by one of the experts and which suggested there was no link between acetaminophen and ASD or ADHD.¹⁴ Finally, each expert failed to link their inconsistent and limited data to the ultimate conclusions.¹⁵

The Southern District of Illinois applied similar analysis of the new Rule 702 in In re Paraquat Products Liability Litigation, where the court excluded the plaintiffs’ general causation expert because the expert’s meta-analysis was not sufficiently reliable under Rule 702.¹⁶ There, the court found that the expert failed to reliably apply his methodology by failing to “clearly predefine his eligibility criteria, his subsequent redefinition of eligibility criteria, his carrying definitions of quality criteria, and this inconsistent application of quality criteria.”¹⁷ The district court helpfully cited to the Advisory Committee’s Notes on the 2023 amendment, which stated that some courts had “incorrectly” held that an expert’s basis of opinion and application of her methodology were questions of weight, not admissibility.¹⁸

We’re cautiously optimistic about some of these decisions in this post–new Rule 702 world, and about the analysis we’ve seen from courts in some of these early cases. Drug and device manufacturers operating in federal court should expect courts to treat expert testimony and opinions with increased scrutiny regarding their qualifications and methodologies, and expert opinions that involve more subjective conclusions will especially run the risk of being excluded.

Wishes for 2025

Cheers to a new year! May it bring interesting and positive legal developments to the world of drug and device law!