By Jonathan Stempel
Aug 3 (Reuters) - California's highest court on Monday ruled in favor of Gilead Sciences in a closely watched case addressing whether manufacturers of drugs that are considered safe must try developing drugs that could be safer.
In a 6-1 decision, the California Supreme Court ordered the dismissal of negligence claims against Gilead by an estimated 24,000 patients using an HIV drug it produced, over its decision more than 20 years ago to stop developing an alternative drug that
had fewer side effects.
"What today’s decision declines to do is recognize, for the first time anywhere, sweeping liability for injuries caused by a concededly nondefective drug because the manufacturer allegedly failed to make a different drug available sooner," Justice Joshua Groban wrote for the majority. "Imposing such liability would create substantial burdens and would risk adverse consequences for pharmaceutical innovation, public health, and patient safety."
Lawyers for the patients did not immediately respond to requests for comment.
"Today’s decision is a victory for all those working to develop improved medical treatments and new medicines," Gilead said in a statement. "The California Supreme Court's decision supports American innovation, allowing companies to continue pursuing breakthroughs for patients and consumers."
The case was closely followed in the pharmaceutical industry, addressing whether drugmakers should sacrifice profit on successful products by being required to spend money to develop and quickly commercialize alternative products, sometimes called a "duty to innovate."
Critics have said imposing that duty would make drug development too costly, punish manufacturers by capping profits from successful drugs, and deprive patients of needed treatments that work.
HIV drugs accounted for 70% of Gilead's $29.4 billion in 2025 revenue.
DRUG SOUGHT BY PATIENTS NOT DIFFERENT ENOUGH
The case was brought by HIV patients who took Gilead drugs made with tenofovir disoproxil fumarate, or TDF.
Those drugs won U.S. approval in 2001 despite possible side effects including kidney dysfunction and bone problems.
Gilead soon began testing tenofovir alafenamide fumarate, or TAF, which was similar to TDF but had fewer side effects.
The Foster City, California-based company stopped developing TAF in 2004, however, after concluding its effectiveness and safety were not different enough to justify the expense.
The patients said TDF's side effects required Gilead to do better.
They also accused Gilead of delaying TAF's commercialization for nearly a decade to maximize profit, and timing it to TDF's patent exclusivity expiring in 2017.
During oral arguments in May, patients' lawyer Holly Boyer said Gilead was "willing to accept the suffering of tens of thousands of patients with HIV forced to endure a drug that was destroying their kidneys and breaking their bones, all so that Gilead could make more money, $27 billion more."
Gilead's lawyer, Joshua Rosenkranz, countered that the company focused on TDF because it achieved "the holy grail" of being a once-a-day pill that saved millions of lives.
(Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot)
