The facts of Watts v Medicis Pharmaceutical Corp ., No. CV-15-0065-PR (Ariz. Sup. Ct. 2016), are straightforward. The plaintiff had acne, received a prescription for Solodyn (minocycline), and received some but not all of the prescribing information. Both product inserts she received cautioned against using the drug for more than 12 weeks; she used it for 20 weeks. About 2 years later, she again received a prescription for the same drug and again used it for 20 weeks. After falling ill, she was hospitalized and ultimately diagnosed with drug-induced lupus and hepatitis. The hepatitis resolved, but the lupus will be lifelong. She sued the drug manufacturer for fraud and product liability and also sought punitive damages. The trial court dismissed the case in favor of the defendant. The plaintiff appealed. The court of appeals upheld the trial court’s ruling in favor of the defendant. This appeal ensued. The Arizona Supreme Court reversed, finding for the plaintiff, and remanded the case for a new trial. Here’s why.

Cases claiming product liability are generally based on the claim either that the product in question contains informational defects pertaining to the instructions for use, or that warnings about using the product were inadequate so that the product was rendered defective and thus unreasonably dangerous. To prove such a claim, the plaintiff must prove that the manufacturer had a duty to warn the end user of the product’s dangerous propensities and that the lack of adequate warning was the cause of the injury. However, in certain contexts—the delivery of health care is one of them—a manufacturer or a supplier of a product may fulfill its duty to warn the end user by a “learned intermediary.” This person then assumes the duty to pass on the required warnings. In health care, these learned intermediaries are generally pharmacists or physicians. This legal tenet is called the “learned intermediary doctrine.”

The Restatement of Torts (Third), Section 6, American Law Institute (St Paul, Minn: West Publishing; 1998), puts it this way:

The rationale supporting this ‘learned intermediary’ rule is that only health-care professionals are in a position to understand the significance of the risks involved and to assess the relative advantages and disadvantages of a given form of prescription-based therapy. The duty then devolves on the health-care provider to supply to the patient such information as is deemed appropriate under the circumstances so that the patient can make an informed choice as to therapy.

… A prescription drug or medical device is not reasonably safe due to inadequate instructions or warnings if reasonable instructions or warnings regarding foreseeable risks of harm are not provided to:

(1) prescribing and other health-care providers who are in a position to reduce the risks of harm in accordance with the instructions or warnings; or (2) the patient when the manufacturer knows or has reason to know that health-care providers will not be in a position to reduce the risks of harm in accordance with the instructions or warnings.

In other words, the manufacturer or supplier of the product, to escape liability, must supply adequate information and warnings to the learned intermediary. Citing a Texas case, the court noted:

As a medical expert, the prescribing physician can take into account the propensities of the drug, as well as the susceptibilities of his patient. His is the task of weighing the benefits of any medication against its potential dangers. The choice he makes is an informed one, an individualized medical judgment bottomed on a knowledge of both patient and palliative. Pharmaceutical companies then, who must warn ultimate purchasers of dangers inherent in patent drugs sold over the counter, in selling prescription drugs are required to warn only the prescribing physician, who acts as a “learned intermediary” between manufacturer and consumer… Because patients can obtain prescription drugs only through their prescribing physician or another authorized intermediary and because the “learned intermediary” is best suited to weigh the patient’s individual needs in conjunction with the risks and benefits of the prescription drug… within the physician-patient relationship, the learned intermediary doctrine applies…. (Cit. Omit)

The reasons supporting use of the learned intermediary doctrine are 3-fold. First, the treating practitioner is in the best position to give any required warning since he is the one who determines whether the drug or product is the right one to use for the patient. Second, as a general rule, manufacturers and suppliers lack an effective means to communicate directly with the end-use consumer. Finally, any duty imparted to a third party to warn the patient might interfere with the doctor-patient relationship and thus the ability to appropriately treat the patient.

The court then cited the Restatement again:

A prescription drug or medical device is not reasonably safe due to inadequate instructions or warnings if reasonable instructions or warnings regarding foreseeable risks of harm are not provided to:… the patient when the manufacturer knows or has reason to know that health-care providers will not be in a position to reduce the risks of harm in accordance with the instructions or warnings.

In summary, although the manufacturer or supplier can escape liability by providing the learned intermediary with the information required to adequately warn the patient, it cannot escape liability if it fails to provide the learned intermediary with the information or warning in the first place.

The plaintiff also claimed that she was the victim of fraud and deserved protection under Arizona’s Consumer Fraud Act (A.R.S. Sec 44-1522[A]) that states:

The act, use or employment by any person of any deception, deceptive or unfair act or practice, fraud, false pretense, false promise, misrepresentation, or concealment, suppression or omission of any material fact with intent that others rely on such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice.

For the plaintiff to prove her case regarding fraud, she must show that there was some type of false promise or misinterpretation associated with the sale or advertisement of the “merchandise” and that an injury resulted therefrom. The court noted that “merchandise is defined as ‘any objects, wares, goods, commodities, intangibles.’” Looking at the plain definition of the words, the court stated that an object is “something that is put or may be regarded as put in the way of some of the senses: a discrete or tangible thing.” Defining goods, the court noted that they are “tangible movable personal property having intrinsic value but usually excluding money.” Therefore, the court concluded that pharmaceuticals—and this would obviously extend to medical devices—are objects and goods; hence, they are merchandise and therefore meet the requirements of the law. The warning in the information packets that the patient received stated that “the safety of using Solodyn longer than 12 weeks has not been studied and is not known.” This obviously contradicted its own full prescribing informational data that “taking the drug for more than 12 weeks can cause drug-induced lupus.” This discrepancy was the basis for the fraud claim.