Intermediaries' Liability for Distributing Drugs and Medical Devices

As a general rule, intermediaries (retailers, distributors, or wholesalers involved in distributing drugs and medical devices) have the same liability for a drug or medical device as the drug company that manufactured the product. Intermediaries that merely distribute the product can generally avoid liability, but distributors whose only activity involved unwrapping and rewrapping the products for sale to the retailer have been held liable. Some states have laws that prevent non-manufacturers from being held liable for injuries caused by defective products.

Reasons for Making Intermediaries Parties

Intermediaries are often named as defendants in drug product liability lawsuits for strategic reasons. The drug manufacturer might be financially unstable. The injured plaintiff might not be able to obtain jurisdiction over the drug manufacturer, so he or she elects to sue the intermediary instead. There can also be procedural reasons an intermediary is made a defendant in a drug product liability suit. Where an intermediary represents that the product is safe, the intermediary would be a necessary party in a plaintiff's claim based on breach of warranty or strict liability. Strict liability means that a person or company is held liable for product injuries without proving they were negligent or at fault.

Theories of Liability

There are three basic theories of liability in drug product liability lawsuits: strict liability, breach of warranty and negligence. Intermediaries can be sued under a strict liability theory. In such cases, any company that distributes or sells a defective product is held liable without requiring proof that the company was negligent. Intermediaries can also be held liable for breach of an implied warranty that the drug or medical device was fit for its intended use and that it was of good quality. By law, all parties in the distribution chain have a duty of reasonable care. This includes the duty to inspect, test and warn. If this duty is breached, a person injured by a defective product can sue an intermediary for negligence. As noted above, an intermediary who acts solely as a conduit in the distribution chain will not be held liable for any injuries caused by a drug or medical device.

Intermediaries May Be Able to Recover Litigation Costs

If an intermediary is held liable in an injured plaintiff's drug product liability suit, the intermediary may be able to sue the manufacturer of the defective product to recover litigation costs and expenses. In legal terms, the intermediary can seek indemnification. Indemnity is a legal principle that requires the manufacturer to reimburse the intermediary for any judgment obtained against it in cases where the product was defective when it left the manufacturer's hands and the intermediary took no independent action that contributed to the plaintiff's injury.