North Carolina House Backs Liability Protections for Drug Makers

The North Carolina House has voted to give pharmaceutical companies sweeping product liability protections as part of a larger Republican effort to limit liability for North Carolina businesses.

The proposed legislation that passed the House 86-32 would grant drug companies immunity from lawsuits attacking the safety and quality of their product if the Food and Drug Administration approved the drug for sale.

FDA-approved drugs “are so highly regulated and their approval process is so intensely reviewed that it is worthy of high confidence,” said bill sponsor Rep. Johnathan Rhyne, R-Lincoln. Biosciences and pharmaceutical companies also employ more than 100,000 North Carolina workers, Rhyne said.

Lawmakers turned back an effort to close a possible loophole that would prevent drug companies from being sued for fraud if the FDA doesn’t first officially declare a pharmaceutical firm responsible for fraud.

The proposed law now headed to the Senate is part of a larger effort by Republican legislators working with the state’s chamber of commerce, which has made liability law changes a top priority this year. The GOP is seeking to make the state’s courts more business-friendly, Rhyne said previously.

But Republicans changed the measure by opening the door to lawsuits if lawyers can persuade a judge or jury that the drug was not safe and effective despite FDA approval.

The move steered the proposed law from industry-friendly territory where only Michigan has gone. That state’s appeals court ruled in March that the law barred Michigan officials from suing Merck & Co. to recover millions of dollars spent on Vioxx, an arthritis drug pulled from the market because of health risks in 2004.

Attorney General Roy Cooper’s office had warned that if the House bill had been in effect, it might have prevented state prosecutors from pursuing more than $100 million in settlements with drug companies over the past four years for alleged improper marketing or overbilling. The money collected goes to fund public schools and to reimburse the state Medicaid system.

“We continue to be concerned that this law could be a loss for taxpayers and consumers. It’s difficult to understand why the legislature would make it harder for North Carolina to take action against drug companies that hurt patients or deceive the government, especially when other states don’t have these obstacles,” Cooper said in a statement after the vote.

House members eliminated language that would have allowed only a quarter of large damage awards intended to punish bad behavior to go to the victim, with the other 75 percent of a punitive award of more than $100,000 going to the state.

“Why should the state benefit when they have no skin in the game?” said Rep. Stephen LaRoque, R-Lenoir.