Supreme Court of Canada Dismisses Application for Leave to Appeal Landmark Decision by Court of Appeal of Quebec Regarding Prescription Drug Manufacturers’ Duty to Warn

In a judgment rendered on April 9, 2020,[1] the Supreme Court of Canada dimissed the application for leave to appeal against a landmark decision rendered by the Court of Appeal of Quebec regarding prescription drug manufacturers’ duty to warn.[2] Through that decision, the Court of Appeal had upheld a Superior Court decision[3] dismissing a class action in which the plaintiffs alleged that a manufacturer failed to provide sufficient information on the risks associated with Biaxin, an antibiotic that the plaintiffs claimed causes serious neuropsychiatric side effects. This was the first time that the Court of Appeal considered the merits of a class action regarding a drug manufacturer’s duty to warn.

This action was based on the manufacturer’s liability for safety defects under articles 1468, 1469 and 1473 of the Civil Code of Québec (“C.C.Q.”) and the manufacturer’s liability for a lack of instructions necessary for the protection of the user against a risk under section 53 of the Consumer Protection Act (“C.P.A.”).

Many product liability class actions have been filed against manufacturers of prescription drugs in Canada in recent years. While many such actions are currently pending before Canadian courts, this case is the first and only one so far in which a common issues trial was held and a judgment on the merits was issued following the trial. The Supreme Court’s refusal to hear the Biaxin case confirms that the Court of Appeal decision will remain the landmark decision in this area. 

The Court of Appeal had set out a number of important rules for pharmaceutical product liability class actions:

  • The sale of prescription drugs by a pharmacist is not a consumer contract and therefore falls outside the scope of the C.P.A.[4]
  • The learned intermediary rule applies to the sale of prescription drugs. The manufacturer can therefore fulfill its duty to warn by adequately informing health professionals.[5]
  • While not conclusive in and of itself, compliance with regulatory standards tends to indicate that the manufacturer has satisfied its duty to warn.[6]

In addition, the Court of Appeal clarified the intensity of a drug manufacturer’s duty to warn of rare side effects observed in conjunction with the intake of a drug when there is no evidence that the drug itself can cause these effects. In such cases, the inclusion of reported reactions in the adverse reactions section of the product monograph may be appropriate and sufficient, without the need to include them in the warnings and precautions section of the product monograph or in Part III of the product monograph specifically intended for patients.

For a summary of the facts and more details on the Court of Appeal decision, click HERE.

This case will certainly have a profound impact on future cases in this area in Canada. One of its consequences is that it closes the door to punitive damage claims under the C.P.A. in product liability cases related to prescription drugs. Since compensatory damages in this type of case do not lend themselves well to collective recovery, this has major practical implications.

The final outcome of this case, the proceedings for which were initiated in 2008, clearly shows that a class action authorization falls well short of establishing the liability of the defendant concerned.

 

[1] 2020 CanLII 26452 (SCC).

[2] 2019 QCCA 801 (“Court of Appeal”).

[3] 2016 QCCS 5083.

[4] Court of Appeal, para. 66.

[5] Court of Appeal, paras. 169 and 172.

[6] Court of Appeal, paras. 159 and 160.

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