The introduction ofthe principle of stric t liability contemplates the conferring of a

right to damages or to compensation without the need to pro ve that the defecti veness

ofthe product that caused the damage was due to fault on the part ofthe producer. It

is desirabl e at the out set to distinguish no-fault 'compensation' from strict or no-fault

' liability' . A system of no-fault 'cornpensation' is one under which th e injured part y

may obtain compensation from a cent ral fund without the need him selfto pursue an y

rem edy that he may have again st the person responsible for the loss. An example of a

no-fault compensation scheme was the Workrnen's Compensation Act 1897 under

which compensation was payable, not out of a central fund , for injury by accident

regardless of whether the employer was at fault, and payment was permitted, with

some exceptions, even when the employee was at fault. The idea ofa central fund was

adopted by the Industriallnjuries Act 1948.

In the Un ited Kingdom the law of contract has recognised for man y years the

concept of strict liabil ity, although the nature ofthe liability depends upon the terms

of the contract, express or implied. Thus under the Sale of Goods Act 1979 a

warranty is implied on a sale of goods that the y are reasonably frt for the purpose for

which the y are bought.

The law of contract prov ides inadequate protection becau se it onl y operates when

there is priv y of contract between the parties. Con sequently it afTords no assistance to

the inj ured person who is not him self the purchaser, and even if he is the purchaser

his remed y under his contract will iie solely against the person who sold the goods to

558 R. N. WILLIAMS

hirn although it may be the manufacturer who was to biarne. This may leave the

retailer in a difficult position since he will be strictly liable to the consumer but

because ofthe terms ofhis contract with the wholesaler he many be unable to recover

from hirn unless he is able to prove negligence. This could rebound on the consumer

should the retailer be uninsured or underinsured.

The present position of the patient

In the Un ited Kingdom no contractural relationship exists between the National

Health Service patient and his general practitioner, or between the patient obtaining

medicine on aNational Health Service prescription and the pharmacist or the

dispens ing doctor.

Even in the case ofthe private patient the contract will usually be for the provision

of services and not for the sale of goods, and so in the event of a claim by a patient the

issue will be whether the standard of services provided fell below that which the

doctor expressly or implicidly agreed to provide, and so this places the patient in a

position akin to that ofthe person who has to prove negligence.

In the absence ofthe benefit of a right to claim under the doctrine of strict liability,

the patient has to base his claim on negligence. This means that he has to establish

that the doctor owed a duty of care to hirn, that the doctor was in breach of that duty

and that damage to hirn ensued as a result ofthat breach .

The duty of care owed by the doctor to the patient is to use due care in undertaking

the treatment and due diligence, care, knowledge and skill in administering the

treatment. The standard is that of the competent medical practitioner who practises

at his level in the particular speciality in the light ofthe medical knowledge available

to him at the time.

In arecent case, which is now the subject ofan appeal to the House ofLords, it was

held that a mere error ofjudgment does not necessarily constitute negligence.

None of the present proposals contemplates any change in the law relating to the

negligent acts of doctors . The proposals relate solely to the liability of producers for

injuries caused by their products, and it remains to be seen whether the draft

Directive (EEC Draft Directive, 1976) is intended to treat a dispensing doctor or

pharmacist as a producer.

The inadequacy ofthe protection afforded to the consumer

The thal idomide affair served to draw public attention to the inadequacy of the

remedies available to a person who has suffered injury from a defective product and

to the difficulty of proving negligence in the case of a sophisticated modern product.

Since logic suggests that if a product is defective the person accountable should

normally be the producer, being the manufacturer or other person responsible for

putting the product into circulation, reports to which reference has been made

favoured the introduction ofstrict liability. These recommendations emphasised that

the producer is best able to assess the risk and impose adequate quality control, he is

in a position to insure against liability and to adjust the price to take account of

administrative costs and insurance, and he can be most easily identified . At the

present time we have the Council ofEurope Draft Convention (1977) and the Draft

EEC Directive (1976) and some member states have already introduced their own

schemes .

The original draft Directive (EEC Draft Directive, 1976) went to the Council of

Ministers on 9th September 1976 but it is only since the publication of the revised

draft (EEC Revised Draft Directive, 1979)that there has been widespread discussion.

PRINCIPLES OF NO-FAULT OR STRICT L1ABILITY 559

The interest taken by those representing the medical professions has produced a more

critical c1imate.

The reaction against the Revised Draft Directive (1979) may be summarised as

being that while strict liability will c1early benefit a minority of those who suffer

injury from defective products, this may be at the expense of the majority of

consumers in that it may discourage innovation, lead to defensive medicine and

result in higher prices by virtue ofinsurance costs and the need to maintain extensive

records.

Since it is evident that member states ofthe EEC who have not already introduced

some form ofstrict liability will wish to move in unison in this field rather than risk

being at a competitive disadvantage, it appears probable that future discussions will

concentrate on the EEC Draft Directive (1976) and that member states will wish to

consider whether the introduction of strict liability is justified, and, if so, to what

extent the existing proposals need to be amended to resolve difficulties many of

which have only recently been fully appreciated.

The main features ofthe Draft EEC Directive

The main features ofthe draft Directive (EEC Draft Directive, 1976) are weil known.

It is only necessary to mention in particular that the revised draft (EEC Revised Draft

Directive, 1979) provides that the producer shall be Iiable for damage caused by a

defect in the article, whether or not he knew or could have known ofthe defect. The

Commission have not incorporated the proposal ofthe European Parliament that the

producer shall not be liable if he can produce evidence that the article cannot be

considered defective in the light of the state of scientific and technological development at the time when the article was put into circulation. The reason advanced by

the Commission for not including the defence of development risks is that the risk is

extremely rare, and that the effect of exclusion would be to require the consumer to

bear the risk of the unknown; also that information received from the European

Committee of Insurers indicates that insurance cover for these risks is not likely to

lead to appreciable greater costs of insurance than those payable following the introduction ofIiability irrespective offault.

The action of the Commission was debated in the European Parliament on 22nd

May 1980 when Mr Davignon maintained that no firm undertaking had been given

by the Commission to include such a defence, but he did undertake to provide for

further discussions with the Legal Affairs Committee on the progress of this

particular item through the Council.

On behalf of consumers it is submitted that it is not for the individual consumer

alone to bear the risks of undiscovered defects and industry should be encouraged to

search for safer products. Furthermore inclusion of such a defence would enable

producers to argue that there was a deveIopment risk and this would result in

expensive litigation. The opposition ofindustry ignores the existing law which in the

realm of contract has to consider development risks where this is relevant by reason

ofthe terms ofthe contract.

The principal concerns

The expressions of concern naturally reflect the interests of those parties involved.

The industry is not anxious to be subject to a further right of action available to the

consumer, while at the same time it is suggested that the need has been exaggerated

because many manufacturers meet doubtful claims in order to preserve their

reputations. It has also been suggested that product liability insurance for pharmaceuticals may be difficult to obtain initially at reasonable premiums.

560 R. N. WILLIAMS

Strong objection is also taken to particular provisions of the draft Directive (EEC

Draft Directive, 1976). It is contended that development risks should be excluded ;

since new products benefit the consumer he should be prepared to bear the risk. It is

said to be unfair that a manufacturer who has taken all reasonable precautions

should be liable for defects of which he could not have been aware at the time the

product was manufactured and that such Iiability would be expensive to insure

against and its existence would tend to discourage innovation.

The European Parliament proposed an exemption from liability where the

producer had recalled the product and taken all possible steps to eliminate the

injurious efTect of the defect and there is strong pressure for the inclusion of such a

provision.

The principal concerns ofthe medical and associated professions

The first issue that needs to be resolved is whether the draft Directive (EEC Draft

Directive, 1976) is intended to impose liability as a 'producer' on the dispensing

doctor. As drafted, the Directive (EEC Revised Draft Directive, 1976) is not clear on

this point. There is no defmition in the draft Directive of the words 'industrially

produced' although it appears from the explanatory memorandum that industrial

production is characterised by 'serial production' while craft and artistic production,

which is to be exernpt, implies 'item by item' production. If the draft were to be

clarified to this extent this would exempt extemporaneous preparations.

While such exernption may be favoured by the medical professions afTected, it does

not follow that it would have the support of all interested parties . Patients might weil

regard it as unfair and anomalous that those who receive their medicines in such

circumstances should not enjoy the same rights of action as those who obtain such

products which have been manufactured elsewhere. On the other hand it is

contended that the exception can be justified, even from the point of view of

consumer protection, because in the event of injury, in view of the nature of the

product and the circumstances, the producer could normally be held liable in

negligence.

Concern has been expressed because the doctor or pharmacist who puts his name,

or other distinguishing feature on the product may fmd hirnself liable as a producer.

Although liability can be avoided by not interfering with the manufacturer's labelling

there remains the possibility that in complying with national legislation which

requires the doctor or pharmacist to add his name to the information on the product

he may be deemed to have represented himselfas the producer.

Where the producer of the article cannot be identified , each supplier of the article

is to be treated as its producer, unless he informs the injured person , within a

reasonable time, of the identity of the producer, or of the person who supplied hirn

with the article. This means that the supplier may feel obliged to tell each patient

what medicine has been prescribed and the name of the producer. Where the

prescription is for a medicinal product under its generic name it needs to be resolved

whether the pharmacist or hospital will need to keep records ofthe manufacturer of

the drug on each occasion when it is supplied. This requirement will encourage

pharmacists to favour pack dispensing of proprietary products rather than generics.

Furthermore the basic requirement will inevitably place a heavy burden on

suppliers, particularly in the case of pharmaceutical products, if the liability of the

producer is not to be extinguished on the expiration of aperiod of ten years. In the

case of 'over-the-counter' medicines it appears utterly unrealistic to expect the

retailer to keep comprehensive records.

Perhaps the most difficult problems arise from the defmition in the draft Directive

(EEC Draft Directive, 1976) of defective product and the requirement to establish

PRINCIPLES OF NO-FAULT OR STRICT L1ABILITY 561

causation. A product is defective if, when used for the purpose for which rt IS

apparently intended, it does not provide the safety which a person is entitled to

expect; ta king into account all the circumstances, including its presentation and the

time at which it was put into circulation.

This at once causes one to enquire: what is the safety which a person is entitled to

expect? There are two aspects. It is undesirable that the patient should be swamped

by warnings of all foreseeable side effects and since it is for the doctor, in his

discretion, to decide what the patient needs to know, it may be possible for the

Directive (EEC Revised Draft Directive, 1979) to provide that the doctor is to be

treated as the patient's agent for this purpose, and in the case of prescription

medicines it might be possible also to provide that the expectation is to be interpreted

as that accepted by the medical profession.

The other aspect arises from the fact that all potent medicines can produce adverse

reactions, and that the same adverse reactions may produce different effects in

different individuals depending on the ir age, sex or ph ysica1 condition. A serious

adverse reaction may result from a defect in the patient rat her than from the

medicinal product, and in individual patients it may be impossible to distinguish

between naturally occurring disease and drug induced disease . Furthermore. while it

may be generally recognised that specified medicinal products are responsible for

certain adverse reactions, there are many areas in which knowledge is incomplete

and in which there are strongly held divergent opinions. In the circumstances the

medical profession may fmd it difficult to determine the degree of expectation that

the patient is entitled to expect, and to provide satisfactory guidance oncausation in

the individual case, so that strict liability operates inequitably as between one patient

and another who is similarly affected.

One answer suggested to this problem is that all adverse reactions to medicinal

products where properly used in the treatment of disease should be regarded as part

ofthe disease and should be compensated in one form or another. However, as things

stand at present the effects of the disease itself are not, with certain exceptions,

compensated - nor are the effects of most accidents - and it is difficult to imagine

munificent provisions ofthis kind in the foreseeable future .

Limits on the amount of damages

The EEC Revised Draft Directive (1979) provides that the totalliability for all

personal injuries caused by identical articleshaving the same defect may be limited to

a maximum amount which is to be determined by a qualified majority ofthe Council

acting on a proposal from the Commission. Prior to an y such determination by the

Council th is amount shall be fixed at 25 million European units of account. The

revised Article provides that the Council sha ll on areport from the Commission

examine every three years the amounts specified in the Article.

While it is probable that this means that revision of the max imum figure can be

made by the Council only, and that the sum is a sum for the Community as a whole,

it may weil prove difficult to determine whether articles are identical. The purpose of

the provision is to assist producers in assessing their maximum risk and to facilitate

insurance cover. However despite careful questioning of those responsible for the

proposal no sat isfactory explanation has been provided as to how it will operate.

Until all claims in respect ofa defective product have been assessed, and this ma y not

be possible until the maximum limitation period has expired, it will not be possible

to determine how much is available for payment in respect of each claim.

562 R. N. WILLIAMS

Tbe duration ofIiability

While extinguishment of the producer's liability at the expiration of ten years from

the date on wh ich the product was put into circulation by the producer may be

appropriate for some products it is c1early not so for most pharmaceutical products

since the efTects of a defective product may not be recognisable for a much longer

period. It is to be noted that the Scottish Law Commission recommended that no cut

ofTperiod be imposed. However the omission of any cut ofTperiod is likel y to have

some influence on insurance rates and will render more onerous the need to keep

adequate records.

Where do we stand at present?

While there is a strong body of opinion that persons in the Untited Kingdom who

have sufTered injury as a result of a defective medicinal product should be able to

obtain some recompense, the difficulty ofproving negligence, particularly in the case

ofsophisticated products, makes it difficult, for such persons to succeed at present.

The first question to be answered is whether this admitted weakness in the

protection afTorded to consumers, particularly those of pharmaceutical products, is

so serious as to justify such a radical change in the law as would mean the elimination

of the need to prove fault on the part of the producer. Despite warnings as to the

likely cost, and the administrative burdens, the encouragement that it is contended it

would afTord for defensive rnedicine, the stultifying efTect that it might have on the

development of new drugs - there remains a very strong body of opinion within

Europe in favour of a change in the law . Some member states have already

introduced the principle and the dran Directive has been before the Council since

1976. However, it is still the subject ofconsideration by a Council Working Party and

when this is completed it will be open to the Council to reject the proposal.

The second question will ari se, should it be agreed that a change in the law is

justified, and thi s will be , what is the nature ofthe changes that should be made. This

is being discu ssed by the Working Party, and by reason of the man y problems that

need to be considered in relation to each ofthe products to wh ich the dran Directive

(EEC Dran Directive , 1976) is intended to appl y it has been forecast that those

discussions will probably continue for a further two to three years.

Wbat are the issues tbat will arise on a claim being made?

A patient who makes a claim on the basi s ofstrict liability will need to prove injury,

the identity of the product and that it is defective, the identity of the responsible

producer, and, probably mo st difficult of all , causation. There is no lower cut ofT

point on the seriousness of the injury and so it remains to be seen whether claims in

respect of trivial injuries would prove a source of embarrassment. While products

under suspicion may be easily identified, difficulties will ari se where the patient has

been supplied with several manufacturers' versions of the same product, and also

where he has been prescribed several products at the same time so that drug interreaction becomes a relevant con sideration. It mayaiso appear illogical that the

supplier shall be treated as the producer when the product does not identify the

producer , unless he ha s been identified by the supplier.

In the realm of pharmaceutical products, for the reasons already stated, causation

is likel y to prove difficult to establish in a large number of cases. This is likel y to be

accentuated by an y extension beyond ten years of the cut ofT period, and so in the

ab sence of some special arrangements the cheap and expeditious settlement of

disputes is unlikel y to be achieved.

PRINCIPLES OF NO-FAULT OR STR!CT L1ABlLlTY

Possible alternative arrangements

563

On the whole the medical and allied professions consider that the requirement to

prove causa tion will operate unfairly as between one patient and another and that if

the resources available were adequate all those who sufTer adverse reaction when

medical products are properly used should be recompensed. It must be a cause of

concern for any doctor on his hospital round to have to recognise at present, and

should the draft Directive (EEC Draft Directive, 1976) be introduced substantially in

its present terms, to accept in the future that while some patients who have sufTered

injury will be able to recover damages, others are likely to fmd it impossible to do so.

A number of alternative proposals have been suggested. It has been said that the

payment of compensation for damage resulting from defective pharmaceutical

products, particularly where the defect arises from their development, should be a

community responsibility, and that a scheme for payment should be established

which would not involve recourse to law by the injured party.

The Medicines Commission have suggested a special compensation fund and this

has received some support from industry and some professional bodies. While

opinions have varied as to its precise form some have had in mind a fund fmanced

and administered by Government, but with awards recoverable by the fund from

producers who could be shown to be liable, while others have visualised Government

making only a contribution to such a fund.

Mr Seal, when speaking in the European Parliament in May , suggested that the

Commission should examine the possibility of providing a central insurance scheme

funded by the Government ofthe individual member states .

While it has become evident that at present Governments are not prepared to

participate in a compensation scheme, there is some support for the proposition that

patients would be better compensated, doctors would be free to practise more freely,

and costs might be less burdensome if liability and compensation were separated.

This was a feature ofthe proposal made by the ABPI to the Pearson Commission in

1974, but since only in cases where negligence could be established would the

proposed State fund be able to recover from the producer, the fund would be bound

to incure a substantial debit balance.

A more recent proposal has been for a Cooperative Insurance Scheme under which

pharmaceutical companies might make arrangements for settlement of certain

categories of claims without recourse to the courts. The Secretary of State has stated

that he would regard this as a constructive approach while at the same time there

must be the most thorough and critical examination of the draft Direct ive (1976) in

order to obta in such derogations from its terms as will meet, so far as possible, the

more fundamental objections to it.

It is the desire of all to strike a reasonable balance between the interest of the

injured consumer, the vast majority of consumers, industry, retailers and the

professions. For those involved in the discussions this appears at times a daunting

task . I think it will be agreed that this is a subject which raises fascinating issues of

social policy, involving as it does interaction between Community and nationallaw

calls in quest ion the criteria to be applied in judging both the need for and merits of

proposed legislation, and requires one to consider how far it is reasonable to pursue

tenets offairness and equity in what mayamount to a contest between the consumer

and the producer, where when viewed overall the efTect of proposed legislation in the

health field as a whole may be merely to shift only marginally the line between

fairness and unfairness. One is bound to speculate whether the Medicines Act 1968

would have been in a difTerent form if strict liabil ity, as now contemplated, had

existed at the time when that Act was being drafted.

564 R. N. WILLIAMS

References

Council of Europe (1977). Convention on products liability in regard to personal injury and

death, 27th January 1977.

EEC Draft Directive on Product Liability (1976). Proposal for a council directive relating to the

approximation ofthe laws, regulations and administrative provisions ofthe member states

concerning liability for defective products. (Presented by the Commission to the Counc il

on 9th September 1976).

EEC Revised Draft Directive (1979). Amendment to the proposal for a counc il directive relating

to the approximation ofthe laws, regulations and administrative provisions ofthe member

states concerning liability for defective products. (Presented by the Commission to the

Council on 26th September 1979).

Law Comm ission Report number 82. HMSO. command 6831.

Pearson Report. Report of the Royal Commission on civil liability and compensation for

personal injury, volume 1.HMSO. command 7054-1.

Scottish Law Commission Report number 45. HMSO. command 6831.

A NO-FAULT OR STRICT LIABILITY

SCHEME IN ACTION - SWEDEN

B. W.DUFWA

University ofStockh olm, Stockh olm. S weden

Background

In March 1973, a Government Committee was establ ished in Sweden with the

purpose of drafting com pensa tion rules for personal injuries or property damages

caused by industria l products. The Cornmittee .was called the Product Liability

Committe e. The outline for its task had, as is usual in Sweden, been laid down by the

government in rather detailed terms ofreference . According to these term s the system

of com pensa tion should relate to particul arl y dangerous products. The work was to

be concentrated on person al injuries, and liability was to be imposed upon the

manufacturers and importers. However , the purpose was not to allow a new compensation system to serve as a substitute for other possible sources ofcompensation , such

as social insurance. The idea was to create new rules for injuries, only to the extent

that they were not alread y co vered by other sourees.

The Committee's first issue became the matter ofwhether it should draft com pensation rul es for all kind s of products or if it should restriet its efforts to some

particul ar ones. The terms ofreference gave the Committee a free hand in thi s regard.

After car eful consideration, the Committee fmall y found it conven ient to begin its

work by draft ing rules regarding , solely, injuri es due to drugs.

As soon as thi s dec ision was taken the Association for th e Swed ish ph armaceutical

manufacturers, 'läkernedelsindustriföreningen' (UF), whose members are responsible for no less than 95% of th e whole Swedi sh drug production, initiated and

worked ou t a proposal for an insurance arrangement concerning drug-related

injuries. According to thi s proposition , every manufacturer and importer of drugs

was to be obl iged to undertake a liability for drug injuries. The conditions for

compensation from this insurance were more closely described in the proposal.

The affil iation to the insurance scheme was to be required by the passage of a new

law by the legislature which would contain, as a condition for commerce with drugs,

that insurance had been taken to cover the undertaking. The Product Liability

Committee, however , -found that such a way of proceeding would involve

con siderable constitutional problems. So the only way of working along the same

line s would ha ve been to esta blish a completely voluntary arrangement, hoping that

ever y manufacturer and importer of drugs would join in . But this soon proved

unrealistic. The Association representing the fore ign pharmaceutical industries

(RUFI) declared that it was not willing to accept the undertaking proposed by UF. In

this situation , no other way remained for the Committee than to draft compensation

rules.

566 B.W.DUFWA

Two ma in ways of proceeding were open to the Committee. One was to create a

strict liab ilit y in tort for every manufacturer and importer of drugs and eventually

ascribe a duty to hirn for insuring his liability. This can be call ed the individual

approach. Another possibility was setting up some sort of collective responsibility.

This could, by ascribing a joint liability coupled with a duty to take a liability

insurance, be built on tort rules. But it could also be founded on a direct obligation

for manufacturers and importers of drugs to jointly set up a fund or an insurance,

covering the needs in question.

Having the same issue to consider, the West German government in Jul y 1974,

chose the last mentioned procedure. In a Bill, containing all kind s of pro visions about

drugs, among them the compensation issue , the government proposed the arrangement ofa public fund from whi ch the victim ofinjuries due to drugs would be able to

rece ive compensation without having to prove fault.

The fund was supposed to be fmanced by the enterprises which put drugs into

circulation (members). The duty to fmance it , was to be allocated according to special

principle s. The basis of calculation was the turn-over of each member. The drugs

were divided into four groups. In each ofthese the turn-over was to be multiplied by a

certain coefficient. A mernber's contribution to the fund was not supposed to exceed

0.5 per cent of annual turn-over. If the contributions - supposed to be determined

annually - did not suffice , the deficit could be claimed during the following year. Tort

action was supposed to remain a possibility.

The Product Liability Cornmittee, which was quite weil informed regarding the

German proposal, chose the same wa y of proceeding. Manufacturers and importers

ofdrugs would have to be affiliated with a collective insurance programme. From this

the victim of drug inj uries would recei ve compensation directl y, without ha ving to

prove the pre sence of fault. The programme was characteri zed as a kind of

compulsory accident insurance for injuries caused by medicines. The insurer was

supposed to be appointed by the government after consu1tation with the

manufacturers and importers; it could be a particular insurance company or , as was

more likel y, a synd icate of such co mpanies. U nlike its German equivalent, the

Swedish proposal never decided the issue of how the costs should be distributed

between the liabl e parties. According to the drafted rules, the manner ofapportioning

th e premiums among th e poli cyholders was to be clear from the statutes of an

association, with which the pol icyholders were supposed to affiliate themselves. The

statutes of th is association were to be laid down by the government or a government

a ppointed authority. With so me exception s, unlimited liability in tort was intended

to remain in etTect.

In certain details there were considerabl e ditTerences between the Swedish and

German compensation proposals. More important, howe ver , is that the y fmally

came to diverge in their design becau se of a revision in the German proposal.

While under consideration by the Federal Diet, the collective approach, which

characterized the German proposal , was switched over to an ind ividual one. Strict

liability in tort was imposed on the manufacturers and importers of drugs, and they

werc required to obtain liability insurance or to have a bank guarantee, covering an

overall total of 12 million DM by way of annuities or 200 million DM by way of a

lump sum; the amount of compensation per person was limited by a ceiling of either

30,000 DM as an annuity or 500 ,000 DM as a lump sum, As in the first version ofthe

proposal the possibility of pcrforming a tort action remained. The West German

proposition was accepted as law and was enacted on 24 August 1976.

The Swedi sh proposal , which was submitted by the Product Liability Committee

and used the collective approach, was published in March 1976 and entitled the Act

on Compensation for Injuries du e to Med icines. It was referred to certain authorities

and others for consideration. On the whole it became the object of propitious

treatment. All the same, it never became law. It was not even submi tted to the

NO-FA ULT OR STRI CT LIABILITY SCH EME 567

parliament by the Department ofJu stice. Instead an insura nce arrangement, wh ich

came into force on Jul y I, 1978, was set up by the pharmaceutical manufacturers and

insurance com pan ies jointly: 'l äkemedelsförsäkringen' (drug injury insurance). This

scheme was founded on the proposed Act. If it had not been established, the Bill

probably would have become law. So in real ity, the insurance scheme was

established in response to the threat of legislation. The step over to legislat ion could

not have been experienced as an abstract and remote alternative to an eventual

break-down of the efforts of creating th e scheme: it was the Department of Ju stice,

responsibl e for the deliver y of the Bill to the parliament, which initiated and called

for negotiation s between th e parties involved.

The voluntary approach

As the Act proposed by th e Committee never became law , there is today no

obligation for pharmaceutical manufacturers and importers to be affiliated to an

insurance arrangement. But whether there exists such an obl igation or not is

unimportant. The important thing is if the victim receives compensation or not.

From this point of view , the difference between a legal compensation system and a

voluntary system such as the ' läkernedelsförsä kringen' might be none at all , if the

voluntary system corresponds to the legal system and if all manufacturers and

importers ofdrugs are affiliated to it.

Some divergencies de veloped between the proposed Act and the

' läkemedelsförsäkringen'. However , the y are not ver y important. Essentiall y,the

conditions for compensat ion wer e the same in both ofthese systems.

All manufacturers and importers of drugs are currently affiliated with the

'l äkemedelsförs äkr ingen'. Wh y is th is?

The whole construction of a voluntary compensation arrangem ent of thi s sort is

built on the idea th at if a ph armac eutical manufacturer or im po rter sho uld refu se to

be related to the coll ect ive insurance, certa in measures would be taken. One wa y is to

legall y require ever yone to be affiliated to th e ins urance. A more sim ple procedure

would be to require th e party in question to inform the cons u mer th at he is not

co nnected with the ' läkemedelsförsäkringen'; th er e is a law in Sweden wh ich makes it

possible for th e state to im pose upon a bu sinessman such an obligation. As such an

obligati on m ight ha ve a very negati ve effect on the bu siness, on e can imagine that an y

manufacturer or importer would hesitate substa ntia lly before refu sin g to be

connected with the ' läkemedelsförs äkringen'.

This was not the first tim e the vo lunta ry approac h was chosen in Sweden when

building up a new compensation system covering injuries. An essential reason for

choosing thi s procedure was the good experience with th e volunta ry approach from

other fields, In the beginning of th e 1970s two kinds of inj uries were experienced as

more troublesome than others in Sweden , from the com pensatio n point of view,

namely those stemming from work and medical malpractice. In both ca ses the victim

was granted compensation from the socia l insurance. Eventually, he was al so able to

get compensation from a privat e ins urance. However, he co uld hardly ever get full

compensation. To be full y indemnified he had to find someone (such as the employer

or the do ctor) responsible for the injury by proving that thi s pe rson had ca used the

injury through negligence at least. The whole situation, wh ich was oft en de scribed in

th e mass-media , was very unpleasant for th e parties invol ved . It was also expensive

for them, as weil as for society. To minimize the costs, to be able to pay out compensation faste r th an before, in short, to make the compen sati on syste m more efficient,

two vol untary insurance schemes were set up : worker's co mpensation insur ance

(' trygghetsförsä kring vid a rbetss kada') and patient insurance Cpa tientfö rsäkring'.

covering inj uries du e to med ical mal practice) . The first was financed by the

568 B.W.DUFWA

employees, the second by county councils. To the extent that they had not received

full compensation, work-injury and medical malpractice victims became able to

receive compensation directly through an insurance scheme. Both schemes were

managed by syndicates, formed by some of the largest insurance companies in

Sweden.

The creation of the drug insurance scheme was facilitated by the experiences

gained during the several years of operation of the two insurance programmes

mentioned; in fact, administratively the drug insurance scheme is closely connected

with the patient insurance. Creation of the scheme was also made easier by the

homogeneous conditions of the drug market in Sweden as weil as by the strong

influence ofthe State on it.

In 1976 there were 166 pharmaceutical manufacturers represented on the Swedish

market. The share ofthe foreign enterprises increased from 39 per cent in 1965 to 49

per cent in 1976. Among the Swedish manufacturers there are five major companies.

One of these (Kabigruppen) is owned by the State, the other four (Astrakoncernen,

Fortiakoncernen, Leokoncernen and Ferrosankoncernen) are private.

Three pharmaceutical companies are responsible for the wholesale trade

concerning drugs, one of these is owned by the State (Apotekarnes Droghandel

(ADA) and in 1976 controlled no less than 80 per cent of distribution. The two other

wholesalers are Kronans Droghandel AB (KD), essentially owned by the foreign

manufacturers and responsible for 7 per cent of the wholesale distribution, and AB

Läkemedelsdistribution (LD), owned by Leogruppen (see above), controlling 13 per

cent ofthe wholesale market.

Drug retail trade in Sweden is a state-controlled monopoly, however it mayaiso be

permitted for an association, in which the State has a deciding influence. The State

has given this sole right to a joint-stock company, called Apoteksbolaget AB , where

the State owns two-thirds ofthe shares; the rest belongs to a foundation, created by a

private society, called Apotekarsocieteten.

The drug insurance scheme

The manufacturers and importers of drugs on the Swedish market have taken upon

themselves a certain liability for drug-injury victims. This undertaking is not

confirrned by a contract or a similar arrangement with the State. It is simply

manifested by a written 'Undertaking to pay compensation for injuries caused by

drugs', Compensation is given to the victim under certain conditions, which are

defined in 17 paragraphs. To these are added two enclosures, which contain tables

and comments solely regarding compensation for pain and sutTering. In addition to

these there are 'Comments', These, however, are very short and only give the head

lines; some paragraphs receive no comment.

The Undertaking is signed by representatives of the manufacturers and importers

in each case , and, after an accident has occurred, at the request of the victim it is

turned over to hirn .

The liability to fulfil the commitment is covered by an insurance, wh ich is

managed by a syndicate that is formed by four large insurance companiesjointly. The

decision to pay out compensation is preceded by an inquiry, carried out by a small

staff wh ich contacts the doctors and other specialists and which, having established

the fact that the victim is entitled to compensation, tries to he\p the victim with all

the details and thus can be considered as his representative. If the victim uses a

lawyer in negotiating with the drug insurance scheme, he is not entitled to be

indernnified for his costs through legal aid.

Matters in dispute or questions of a principle nature, relating to indemnity, are at

the instigation of the injured party, the insurer or the insured brought before a

NO·FAULTOR STRICT LIABILITY SCHEME 569

specially appointed committee (Drug Injury Committee) for a statement. The

Committee consists of eight members. The chairman and three other members are

appointed by the government. Of the latter three members, one represents medical

science and one the interests of the patient. Those responsible for medical ca re and

the insurer each appoint one member. The insured appoints two members. The

Chairman has the deciding vote .

If the insurer and the injured party, after a statement given by the Cornmittee, are

still not satisfied, the dispute may be referred to arbitration in accordance with the

Swedish Arbitration Act. In the event that the arbitrators appointed by the parties to

such a dispute are unable to agree, regarding the selection of a third arbitrator, the

latter is appointed by the government.

The injured party must request a statement by the Committee or instigate

arbitration proceedings within a certain period of time. There are certain limitation

periods set out in the Undertaking.

As mentioned above, the Undertaking came into force on July I, 1978. Injuries

which occurred before this date are not covered by the drug insurance scheme.

By the 6th ofJune 1980, nearly two years after its start, 251 requests for compensation had been made. 1fthis numbercorrectly expresses a tendency, one should be

able to conclude that about lO cases each month would be brought against the

insurance.

However, several circumstances indicate that this sum is too large. When an

insurance ofthis type starts, there may be victims who over-estimate their chances of

being indemnified by the insurance: they take chances that they later, when the

principles applied by the insurer are better known, would never have done. Also, 60

of the 251 requests were cases where the injury occurred before the Ist ofJuly 1978.

The share of victims trying to get compensation for injuries sustained before the

insurance came into force will diminish in the future . If one reduces the 251 cases by

these 60, the result is 191 cases or 8 cases per month. Finally, ofthe 191 cases left, 17

were referred to and compensated by the patient insurance; the inquiry in these cases

showed that the cause ofthe injury in these cases was medical malpractice (such as a

mistake by the doctor regarding dosage). 174 cases (191-17) corresponds to somewhat

less than 8 cases each month.

The number of claims has been less than expected: the Product Liability

Committee had expected that ab out 200 cases each year would be brought to the

insurance scheme.

lt is not c1ear, and today it is a matter ofconcern for the insurer, why more requests

for compensation have not been brought under the insurance scheme. Possibly the

Product Liability Committee overestimated the need for compensation. It is possible

that the information about the insurance has been insufficiently publicised. However,

much has been done to spread knowledge about the insurance. For exarnple,

brochures are Iaid out in the drugstores explaining about the insurance.

Ofthe 191 requests concerning injuries which occurred after the 1st ofJu1y 1978, 59

(31%) have been successful, 86 (45%) have been denied and the rest , 46 cases (24%)

are still the subject ofinvestigation.

Of the 59 successful cases, 42 have received compensation from the drug

insurance. The others have, as indicated above, been indernnified by the patient

insurance. If one leaves out the 17 cases compensated by the patient insurance, and

concentrates on the drug insurance, one gets the following apportionment:

42 (24%) = compensation paid out

86 (50%) = compensation denied

46 (26%) = not yet decided

174

The 86 cases, where compensation has been denied, fall into three groups.

570 B. W.DUFWA

I) Th is group consists of those cases whcre compensation has been refused because

of a lack ofcausality: the victim has not succecdcd in proving that the injury has been

caused by drugs. The burden ofprooflaid on the victim is facilitated through a rule in

the Undertaking (see above) according to which the victim only has to show that it is

probable that the injury is a result of the use of drugs . In the Undertaking this is

expressed by use ofthe term 'drug-related injury'. By this term is understood, illness

or other injury atTecting the human body which , with preponderant probability, has

occurred due to the use of a drug; a 'drug-related inj ury' is never considered to

incl ude illness or other injury which is due to lack or absence ofeffect, on the part ofa

drug, or has occurred in the course of an activity wh ich may be considered unsuitable

with respect to the intended or predicted etTectof'the drug in question. Ofthc 86 cases

mentioned, the victim had failed to fulfil this obligation of proof in 20 cases . If you

consider that 20 cases ofthe 174 above have not been drug-related injuries and leave

them out of account, you get the following apportionment:

42 (27%) =compensation paid out

66 (43%) =compensation denied

46 (30%)=not yet decided

154

2) The second group of cases where compensation has been denied consists ofthose

where the injury has not been considered serious enough. According to the

Undertaking a 'drug-related injury' will only be indemnified ifthe injured party has,

as a consequence ofthe injury:

'- been on the siek list with incapacity for work of at least 50% for aperiod exceeding

14days , or

- has otherwise sustained a corresponding deterioration in the functions ofthe body

for aperiod exceeding 14da ys, or

- has sustained permanent disablement ofsome significance, or

- has died'.

In 7 cases , compensation has been denied with reference to this rule .

3) The third group is represented by 59 cases . In these, compensation has been

denied after a risk evaluation. According to the Undertaking every decision has to be

preceded by a certain risk evaluation:

'No indemnity will be payable for drug-related injury, ta king into account,

- the possibilities and the reason for the medical profession predicting the etTects of

the drug, and

- the nature and seriousness ofthe illness to which the treatment relates, the general

health ofthe injured party, the scope ofthe injury and other circumstances,

if it may be considered that the injured party should reasonably have endured the

injury as a side -etTect ofthe use ofthe drug'.

According to the principles laid down in the Comment to the Undertaking (see

above), three factors will determine how the risk evaluation shall be carried out.

First: the seriousness of the illness, which caused the victim to take the drug, is

taken into account. The more serious the original illness was, the lesser the chances

ofgetting compensation.

Secondly: the probability of being injured is important. The victim has the best

chances, where the probability of being injured is low; on the contrary the chances

are not so good ifit is a matter ofsecondary etTects.

Thirdly: the seriousness of the drug-related injury will also influence the right to

compensation. The more seriously the victim is injured due to the drugs, the better

his prospects ofreceiving compensation.

NO-FAULT OR STRICT L1ABILITY SCHEME

Conclusions

57\

On the Ist ofJuly 1978, a new compensation scheme concerning injuries due to drugs

came into force in Sweden. The scheme is not based on legislation but on an

Undertaking by the manufacturers and importers of drugs. Compensation is only

paid out if it is not received from other sources, such as social insura nce. There are

important limitations in the Undertaking: essentially, only more serious and

unexpected drug injuries are compensated. The experience after two yea rs in action is

good. The administrative costs are low. As far as is known no trial concerning drug

injuries which occurred after the Ist ofJuly 1978, has begun. It seems as ifsociety on

the whole has benefrted substantially from this new drug insura nce scheme.

References

Dufwa, B. W. (1979). Product liability legislation. General problems and techniques. The

Swedish experience. In Pharmaceutical Medicine - The Future. ed. Lahon , H., Rondel,

R. K. & Kratochvil, C. pp. 144.Brussels: Acta Therapeutica.

Dufwa, B. W. (1977). Responsabilire du fait des produits en droit suedois, Revue internationale

de droit compare, pp. 525.

Mandahl, H. (1979). Product liability legislation as seen by the Swedish national board ofhealth

and welfare. In Pharmaceutical Medicine - The Futu re. ed. Lahon, H., Rondel, R. K. &

Kratochvil, C. pp. 154. Brussels: Acta Therapeutica.

Wahlqvist, S. (1979). The new Swedish drug insurance scheme. In Pharmaceutical Medicine>

The Future. ed. Lahon, H., Rondel, R. K. & Kratochvil , C. pp. 162. Brussels: Acta

Therapeutica.

THE RESPONSIBILITY OF THE

PHARMACEUTICAL INDUSTRY

B. HERDE

Pharmaceutical Division and Departm ent ofResearch and Development ,

Sandoz Ltd, 4002 Basle, Switzerland

Introduction

It is weil known that there is no such thing as "The University', there are many

academic institutions of different size, level, prest ige and att itude. Consequently,

nobody can claim to speak 'for Academia'. Similarl y, there is no such thing as 'The

Pharmaceutical Industry' - there are man y pharmaceutical companie s of different

size, level, prestige and attitude. Consequently, an indi vidual cannot be expected to

speak 'for the Pharmaceutical Industry' and will express personal opinions, not those

ofan organisation or ofan association.

The original brief for this paper was to discuss the liability of the pharmaceutical

industr y. However, the responsibility of the pharmaceutical industry will be

considered becau se liability is primarily a legal and fmancial term, whereas responsibility also has ethical and social connotations.

Two traditional aspects of responsibility will be briefly dealt with first. The

pharmaceutical manufacturer usuall y, and rightl y, assumes full responsibility for

adverse effects of compounds in clinical trials before marketing approval, that is, of

new substances which may become medic ines, but are not yet approved as such by

the regulatory agency. Also traditionally, the manufacturer does not cons ider himself

responsible for injuries arising from misu se of med icines, if for example, the patient

disregards the doctor's advice or ifthe doctor disregards the recommendations ofthe

manufacturer and /or the regulatory agency.

However, adverse effects may occur with med icines which are licensed for general

use by a regulatory agency (marketed), even though these were properly used by the

physician and the patient. Both classes of adverse effects (those known at the time of

marketing approval and those unknown at that time) will now be considered.

Clearly, there is an important difference between these two.

The duty of care

Every industry toda y has ethical and social responsibility. The days ofreckless 'profit

maximisation' have long since passed, certainly in the pharmaceutical industry. It is

now generally acknowledged that industry must take account of publ ic needs. This

applies to all the acts and act ivities of a company, but especiall y to the products

which it manufactures. In th is connection, what is called the dut y of care of the

THE RESPONSIBILITY OF THE PHARMACEUTICAL INDUSTRY 573

pharmaceutical manufacturer is important; this means that the pharmaceutical

industry should put a product on the market only if due care has been observed in all

aspects:

a) The medicine should have undergone extensive research to protect its users

against every avoidable injury. However, this first duty of care also shows us its

limitations. We all know that no research, however weil planned and extensive it

may have been , can guarantee 100% protection against unpleasant surprises

when the product is on the market. Unforeseen, unforeseeable, hitherto not

observed adverse effects, so-calied 'development defects', which were not known

and could not reasonably have been known at the time of introduction, cannot

be completely excluded even with adequate care in research, because even the

most extensive research is carried out on relatively small sampies of the

population.

b) The medicine should be manufactured according to Good Manufacturing

Practices and its production effectively controlled by a Quality Control and

Assurance Department, independent ofthe Production Department.

c) The medicine should be promoted in a responsible fashion and for valid

indications only. The necessary precautions, warnings and contra-indications

must be communicated to doctors and patients. (Here too the task is not easy and

the dividing lines are not always clear. The establishment of a risk/benefit

relationship between the desired therapeutic effects and the undesired adverse

effects is subjective and it is only a rule ofthumb that the more serious an illness,

the more acceptable are serious adverse effects.)

d) As 'development defects' cannot be ruled out - the unforeseeable cannot, by

definition, be foreseen - the effects of a medicine should be monitored by the

manufacturer after its approval by the authorities and its availability for general

prescribing by means ofsome form of'post-marketing surveillance'.

Liability in negligence or fault

If a pharmaceutical manufacturer does not fulfil his duty of care , he is negligent.

According to the classical concept of liability, negligence renders hirn liable to pay

compensation for injury. This classical concept ofliability has the advantage ofbeing

straightforward and clear: every person who acts with negligence has 10 indemnify

the victims of his negligence Cfor his fault). The pharmaceutical manufacturer

accepts this principle; not only because it is the law, but also because this type of

liability is perceived by hirn asjust and fair.

Nevertheless, there is an element of confrontation here: the manufacturer will be

reluctant to accept the verdict 'negligent' with its implied moral condemnation and

will therefore defend hirnself within the limits of the law. This may lead to lengthy

legal proceedings involving the Courts, and the indemnification of the victim may

become effective only after a long period oftime, sometimes years.

Furthermore, there remains the problem ofserious adverse effects - which are not

the result of negligence - both those which were known at the time of marketing

approval, and were judged acceptable by the regulatory agency on the basis of a riskl

benefit evaluation, and those which emerged after marketing approval but which

were neither foreseeable nor due to negligence.

lt is to reduce the elements ofconfrontation and moral condemnation and to avoid

the difficulty of proving fault in addition to causation, that the concepts of strict

liability and no-fault liabil ity have been put forward in relation to drugs in recent

years.

574 B. BERDE

Strict liability

The concept of strict liability is based on the princ iple that the injured person does

not have to prove negligence on the part of the manufacturer, but only that his

product was defective. According to the draft EEC direct ive (Commission to the

Council, 1979), a product is 'defective', 'when, being used for the purpose for which it

is apparently intended, it does not provide the safety which a person is entitled to

expect , taking into account all the circumstances including its presentation at the

time at which it was put into circulation'. According to a U.S. defmition (American

Law Institute, 1965), strict liability rneans that a manufacturer may be held liable

even though he ' has exercised all possible care in the preparation and sale of his

product'. This may be an attempt by the legal profession to tackle what the medical

profession calls the risk/benefit relationship.

The reasons for preferring proof of 'defectiveness' to proof of 'negligence' are

twofold :

a) It is c1aimed that it is frequently impossible for a victim to prove negligence on

the part of a manufacturer even where there was negligence, and that often there

is none , (for example, practolol), whereas causation is easier to detect and prove .

b) There are some cases in which a product is 'defective', even though negligence is

not involved. This applies to hitherto unknown and unforeseeable serious

adverse effects - 'development defects' as defmed above - but mayaiso be true of

manufacturing defects, for instance , if defective production apparatus is

involved and quality control could not have detected the defect. (For example, a

tableting machine fills double the correct amount of an active ingredient into

some tablets for aperiod of ten seconds, affecting only 5 out of 10,000 packs of

the drug). Such cases happen rarely, but they do occur, though probably much

more in the engineering and car industries than in the pharmaceutical industry.

Under a system of strict liability the manufacturer is liable, even though there is

nothing with which to reproach hirn. The switch from proof of negligence to strict

liability means abandoning the straightforward fault .... indemnity principle, out of

social considerations. The social argument is that the economically stronger

manufacturer, rather than the victim , should bear this risk. Also he is c1aimed to

have better access to insurance.

The probable attitude ofthe Industry to strict Iiability

It may be postulated that the attitude of pharmaceutical companies to the

controversy between the concept of negligence (fault) and the concept of strict

liability ('defect') is that, although it will be regretted that a straightforward and

transparent concept is being abandoned in the revision ofthe law of product liability,

some will possibly agree to strict liability schemes, provided that such a scheme is not

considered independently of other economic factors and the following rules are

applied:

a) A pharmaceutical manufacturer should not be liable for 'development defects'

-or 'development risks' - at least not exclusively and not without limits . Such

liability would certainly be feit as areal danger to progress in therapeutic

research and could mean that the legitimate, if unspoken, desire of patients to

have the best possible medicine available as soon as possible could not be met.

Should the research-based pharmaceutical companies get the impression that

taking risks - an inevitable prerequisite of innovation and progress - is being

penalized, funds for doing original research may be seriously curtailed - a

deveIopment which would certainly be regretted . (Editorial, 1980).

THE RESPONSIBILITY OF THE PHARMACEUTICAL INDUSTRY 575

As etTective post-marketing surveillance methods develop, it will be possible

to minimize injuries due to unavoidable 'development defects' by means ofearly

detection.

b) As strict liability is a social concept, there should be fmancial limits to liability,

certainly on the producer, if perhaps not on the community. These limits must

be determined according to the possibility of covering the risk adequately by

insurance. Needless to say the premiums would have to be passed on in prices, so

that the costs are spread over all consumers. Governments arbitrarily regulating

the prices ofmedicines should bear this in mind.

c) In a social concept, governments (society) must also bear their share ofresponsibility and liability. It must be acknowledged that by approving the claims

regarding the efficacy and safety of a medicine and by setting guidelines and/or

requirements for such approval, the government is also taking responsibility for

its quality, This was accepted by the Japanese government in the SMON case

and by the German government in the thalidomide case . A big product liability

case could lead to bankruptcy or at least to serious financial difficulties for an

otherwise sound company. Such extreme consequences should be avoided, since

pharmaceutical companies also have social responsibilities towards their

employees, and th is should not be overlooked by the State.

The fact that the State takes its share of responsibility should, of course, not

lead to an even more hesitant attitude in the approval of new medicines. This

would be a very short-sighted policy: what might possibly be saved at one end of

the 'health bill', would be more than outweighed by further holding back

improvements in therapy and prophylaxis.

d) Another more general approach would be to acknowledge that, since the concept

of liability is now a social one , Social Security should step in, for example, by

accepting responsibility for whatever is above the insurable limit. In strict

liability, a company is liable even without having committed a fault ; the victim

may be injured without fault on his part. The analogies with cases of 'force

majeure', (diseases, accidents or catastrophes leading to invalidity), are obvious

and it is only logical that Social Security, which is certainly one of the major

advances ofthis century, should contribute to help such victims .

No-faultIiability

In no-fault liability schemes, neither proof0/fault nor 0/ defect are conditions for

compensation. It is sufficient that a link 0/causality between the medicine and the

damage should be established. A law making the manufacturer liable even in such

cases, would c1early be based exclusively on social considerations. Pharmaceutical

companies most probably would deny exclusive responsibility. Such a law could only

be considered if a large insurance pool were established jointly by the whole industry

and the State. Admittedly, this could lead to bureaucracy, high costs and high

premiums, which would be reflected in the prices of med icines and in a further

decline ofinnovation in therapeutic research.

In discussing such ascheme, both its scope and its workings need careful study.

a) Should the scope be wide, even 'universal', that is, should it cover 'development

defects' as weil as known side etTects? Should it include all of the latter, that is,

common side efTects of anticancer medicines as weil as rare but severe adverse

efTects of some anti-inflammatory cornpounds? On e definition (First World

Congress on Product Liability, 1977) includes even misuse: 'A true no-fault

compensation scheme would be designed to provide a recovery for all persons

who are injured by a product (unless they injured themselves intentionally).

They would be able to recover regardless of their own fault or whether they

576 B. BERDE

misused the product. They also would be able to recover even so the product was

not defective . Thus a person injured by an unavoidably unsafe pharmaceutical

would recover under a no-fault system'. Or should it be restricted, based on risk/

benefit considerations? And, if so, who is to decide what should be included and

what not?

b) Concerning the operation ofsuch a scheme, the first important question is who

should decide the causality between medicine and side efTect in a given case?

Courts of law? Would this satisfy those who are aiming at speedy settlements?

Should a tribunal be considered instead? What should its composition be?

Ifthe scheme is to be 'liberal', 'rapid', nearly 'automatic', would it not open

the door to abu se - and thereby push prices even higher?

Many difficult questions are still wide open. This, of course, is no reason for

not thinking about them.

Conclusions

The traditional attitude of the pharmaceutical manufacturer is to accept responsibility for injuries occurring during pre-marketing clinical trials of new compounds.

With regard to medicines on the market, after regulatory approval, no responsibility is assumed by the manufacturer for misuse by the doctor or the patient. The

industry traditionally accepts responsibility for 'negligencc' or 'fault'; not only

because it is the law, but also because this type ofliability is regarded by it as just and

fair.

Many pharmaceutical manufacturers would agree that they have to contribute to

an efTective post-marketing surveillance system in order to minimize the

consequences of so-calied 'developrnent defects', as defined above . Probably, some

could be persuaded to accept some sort ofstrict liability scheme - with in limits and

not considered independently ofother economic factors .

The attitude the pharmaceutical industry would adopt towards a no-fault liability

scheme is unclear, particularly as it is difficult to visualise what the purpose and the

contours ofsuch a proposal are likely to be.

References

American Law Institute (1965). Restatement (second) ofTorts (drafted and promulgated by the

American LawInstitute) §402A.

Commission to the Council (1979). Article 4 ofthe Amendment ofthe Proposal for a Council

Directive relating to the Approximation of the laws, regulations and administrative

provisions of the member states concerning liability for defective products. Presented by

the Commission to the Council pursuant to the second paragraph of article 149 ofthe EEC

Treaty. Com (79) 415 final.

Editorial (1980). Drug lag bad: drug lack worse. Brit. med. J., 280, 670.

First World Congress on Product Liabilit y (1977). Briefing Report: Interagency Task Force

on Product Liabili ty; Executive summary. In First World Congress on Product Liab ility.

London: Program Materia