The California Supreme Court handed down its long-awaited decision in Gilead Tenofovir Cases yesterday, and as we hoped, the Court held that a drug manufacturer owes no duty of care when deciding whether and when to develop an allegedly safer alternative drug to replace an admittedly non-defective product. The decision is a significant win for the pharmaceutical industry, and it puts an end to the novel “duty to innovate” theory of negligence liability that had been percolating in the lower courts.
And, yes, we can all agree now that prescription medications are not the same as chicken enchiladas, but put a pin in that. We will come back to it later.
We have been covering this litigation in California (here, here, here, and here) and elsewhere (e.g., here) for many years, and to provide the briefest of recaps, the plaintiffs in these cases allege injuries from taking TDF-based HIV antiretroviral medications. They concede, however, that their TDF meds are not defective. They allege instead that the manufacturer unreasonably delayed developing an alternative that plaintiffs allege was safer—TAF-based medications. According to these plaintiffs, the manufacturer owed a duty to bring a different, allegedly safer medicine to market soon than it actually did.
The Court of Appeal bought it and created a newly minted tort—negligence based on a duty to innovate—in an opinion that we roundly criticized and named the worst drug and medical device opinion of 2024. And deservedly so. No court had ever recognized a tort duty to develop an alternative medicine faster, and imposing that duty would both impair innovation and punish a company for selling a non-defective product that saved thousands of lives.
The Supreme Court has now reversed, and its majority opinion acknowledges fully that the Court of Appeal’s new duty departed from existing California law in multiple ways and that the new duty was entirely unworkable. Gilead Tenofovir Cases, No. S283862, 2026 WL 2223748 (Cal. Aug. 3, 2026) (slip op.) (to be published).
The Supreme Court first cast substantial doubt on whether a plaintiff can ever prevail in a product liability lawsuit (negligence or strict liability) without proving a product defect. Generally speaking, the answer should be “no.” The plaintiffs here argued that everyone is subject to a duty to avoid unreasonably causing harm to others. But the Supreme Court explained that in the product liability context, the scope of any duty is limited to selling non-defective products:
In the products liability context, our decisions have generally defined a manufacturer’s duty under [California law] as the duty to design, manufacture, and market products that are free from defects. Recognizing a broader duty under which liability may arise even absent a defect in the injury-producing product would create substantial tension with that body of law.
Id. at p.14-15. That tension is because product liability law provides specific tests to determine whether a product is defective, and those standards both define potential liability and provide meaningful constraints. The plaintiffs’ theory runs against this settled law:
Plaintiffs’ theory risks circumventing these settled principles. If manufacturers owed a broader duty to act reasonably to avoid all product-related injuries, plaintiffs could seek recovery for harms caused by concededly nondefective products merely by alleging the manufacturer acted unreasonably. Questions currently governed by established defect tests would instead be left to a fact finder’s generalized assessment of reasonableness.
This problem is especially acute in the context of prescription drug development.
Id. at p.15. Echoing the defendant and multiple amici, the Supreme Court explained that an unconstrained negligence standard would invite juries to second-guess complex research and development decisions made decades ago under conditions of scientific uncertainty and incomplete information. The contrast with established product liability principles was sharp. “[P]roduct defect claims . . . are evaluated based on contemporaneous and relatively complete scientific evidence available at the time of the product’s distribution.” The claims these plaintiffs asserted, by contrast, “would require retrospective assessment of inherently provisional judgments based on evolving scientific data.” Id. at p.16. In other words, products must be defective at the time of sale, not at some uncertain earlier time when their risks and benefits are still being researched.
The Court of Appeal’s attempt to deal with these factors resulted in an ineffective and unworkable standard. The Court of Appeal pegged its new duty to whether an alternate product had already been “invented or developed,” but those terms were “ambiguous and, for that reason, are unlikely to act as meaningful constraints in practice.” Id. The Supreme Court was particularly critical of the Court of Appeal’s requirement that the manufacturer “know” the alternate medicine to be safer and equally as effective because
that conclusion rests on a flawed premise: namely, that a drug can be sufficiently developed, and its safety and efficacy sufficiently known, before completion of phase III clinical trials and FDA approval. . . . It also underscores the difficulty of imposing negligence liability based on preliminary and evolving safety assessments of an alternative drug still under development, rather than on a defect in the drug currently being sold.
Id. at p.17. The Court of Appeal’s “knowledge requirement” was essentially unattainable. Moreover, in a passage that was particularly satisfying for us, the Supreme Court faulted the Court of Appeal for comparing life-saving medications to a chicken enchilada with a stray chicken bone. (See title of our post on the Court of Appeal’s opinion.) As the Supreme Court held, “That context is far removed from prescription-drug development.” Id. at p.20. We agree.
Here is the quote you will want to come back to:
For these reasons, we have substantial doubt that California law recognizes a general negligence duty requiring drug manufacturers to act reasonably in making drug development and commercialization decisions apart from their established duty to design, manufacture, and market products free from defects. Products liability law has long tied a manufacturer’s duty of care to defects in the product placed into the stream of commerce, and plaintiffs identify no clear limiting principle for imposing liability absent proof of a product defect.
Id. at p. 20. Expressing “substantial doubt” may not be a definitive holding, but this is the California Supreme Court. Lower courts and federal courts making Erie predictions should pay heed.
In the end, the Supreme Court held that regardless of whether manufacturers could owe some duty beyond selling non-defective products, California tort law did not support creating the Court of Appeal’s duty to innovate in any event. That the product was an FDA-approved prescription medicine was key. Applying the factors enumerated in Rowland v. Christian, 69 Cal.2d 108 (1968), the Supreme Court held that the defendant owed no duty to develop and commercialize the alternate products—TAF-based medications—earlier than it actually did.
In Rowland, the Supreme Court identified considerations governing duties of care—grouped into foreseeability factors and public policy factors. The foreseeability factors weighed heavily against the plaintiffs’ proposed duty. Almost any harm can be described as “foreseeable” in hindsight. The question is whether the harm was reasonably foreseeable to the manufacturer at the time it was developing the alternate product. As the Court already explained, the nature of drug development and the regulatory process make it difficult to establish what a manufacturer “knew,” let alone what it foresaw or should have foreseen:
Because a manufacturer cannot truly know of a drug’s safety and efficacy before phase III testing and FDA approval, it cannot reasonably foresee early in the development process that any delay in commercializing an alternative drug will harm users of an existing one.
Gilead, slip op. at p.26. The Supreme Court also found that any connection between the alleged delay and the alleged injuries was “highly attenuated.” Any such injury would depend on speculation regarding multiple independent third parties, including healthcare providers and regulators. The connection would also depend on medical causation and uncertain outcomes of additional clinical trials.
The public policy factors likewise weighed against creating the new duty. Here, we will emphasize two points. First, while the Court of Appeal was quick to find the defendant “morally blameworthy” for allegedly delaying development of TAF-based drugs in order to increase profits, the Supreme Court took a more balanced view. In deciding whether to continue developing an alternative medicine, a pharma manufacturer might consider profits, but that may be only one of several factors. Plus, equating profit motive to moral blameworthiness would apply to “virtually every negligence action brought against a business,” which is not California law. Id. at p.35.
Second, the Court of Appeal’s duty to innovate would not prevent future harm, and might even contribute to harm by discouraging innovation. As the Supreme Court explained:
Perhaps more importantly, such a duty risks creating perverse incentives that may undermine, rather than advance the goal of preventing future harm. Decisions regarding whether to continue developing a promising drug, how quickly to advance it through clinical trials, and how to allocate finite research and development resources are inherently complex. . . . [A] duty to develop and commercialize, without undue delay, a potentially safer alternative to a nondefective drug could distort those decisions . . . .
Id. at p.37-38. A manufacturer could conclude, for example, that investing in development of alternative drugs is necessary to reduce litigation risk, while research into entirely new therapies carries no comparable incentive. Early clinical studies could be curtailed for fear that study results could create a new class of tort plaintiffs. The Supreme Court previously held in Brown v. Superior Court that tort law should encourage research into potentially beneficial medications, not discourage it. The plaintiffs argued that these concerns are overblown and that juries can figure out whether these kinds of development decisions are reasonable or not. But “[n]either the plaintiffs nor the dissent have identified a single case wherein a fact finder has been tasked with making such determinations.” Id. at p.40-41.
Much of the debate leading up to oral argument was around whether the Court of Appeal’s new duty would adversely impact innovation. The Supreme Court recognized that risk, and not necessarily only in the pharmaceutical industry. As the Court held,
For the reasons explained above, the duty threatens to skew innovation priorities in a manner that does not advance—and may ultimately undermine—public health and safety. [¶] Moreover, plaintiffs provide no legal basis for confining their theory of liability to the pharmaceutical industry.
Id. at p.44. The Supreme Court reversed the Court of Appeal and remanded for entry of summary judgment for the defendant on all causes of action.
The Supreme Court’s opinion effectively shuts the door on the “duty to innovate” theory in California, and that is the correct outcome. There was a dissenting opinion, from the one justice who clearly signaled alignment with plaintiffs during oral argument. That justice broadly accused the Court of providing “sweeping immunity” for pharmaceutical manufacturers, but nothing could be further from the truth. As we have said all along, the Court of Appeal’s new duty was completely gratuitous. Patients taking TDF-based medicines have tort remedies against the product manufacturer—provided they can prove the elements of a product liability claim under California law, including the presence of a product defect.
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