Our New York partner Shireen Barday recently discussed the corporate governance dilemma created by the drug ruling in a decision from the Court of Appeal of the State of California in Gilead Sciences Inc. v. Superior Court, involving Gilead’s alleged delay-for-pay business practices, which has drawn significant outcry from all sides.
The public is outraged that Gilead may have delayed the commercialisation of a safer drug to maximize profits from the drug it already had on the market. However, businesses in the life science space are outraged that a court in California has upended the well-settled common law rule that a manufacturer can only be held liable for customer injuries if its product was defective in the first place.
The decision, affirmed once on appeal — and now in front of the California Supreme Court — seems to hold that, where a pharmaceutical company has a drug in its pipeline that is safer than another drug it presently has on the market, the company has a duty to commercialise the competing drug with all deliberate speed if there is any indication that the competing drug might be safer or better.
Read the full article here.
