California's highest court on Monday sided with Gilead Sciences, ruling that drugmakers who produce medicines that are not defective do not owe patients a legal duty to pursue development of potentially safer versions of those medicines. The unanimous opinion of the majority, 6-1, ordered dismissal of negligence claims brought by an estimated 24,000 people who took an HIV medication Gilead marketed.
At issue was Gilead’s early-2000s decision to discontinue development of a reformulated tenofovir compound that later emerged with fewer side effects. Justice Joshua Groban, writing for the majority, said recognizing a duty to innovate would amount to imposing sweeping liability on manufacturers for injuries caused by drugs the court conceded were not defective.
"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," Groban wrote. He warned that converting development choices into negligence claims would require juries to revisit complex scientific judgments after the fact, at times when the underlying science remains unsettled.
Groban added that imposing such a duty could place substantial burdens on the drug industry and carry the risk of adverse consequences for pharmaceutical innovation, public health and patient safety - concerns raised repeatedly by supporters of Gilead’s position.
The litigation had the potential to alter product liability law for pharmaceuticals in California. Earlier this year, a state appeals court had concluded manufacturers could be held to a duty to innovate, a decision the Supreme Court has now overturned.
Gilead’s HIV medicines accounted for roughly 70% of the company’s $29.4 billion in revenue last year, a fact underscoring the commercial stakes tied to the dispute. In response to the ruling, Gilead characterized the decision as a victory for those engaged in developing improved therapies and new medicines.
The case centered on drugs containing tenofovir disoproxil fumarate, or TDF, which received approval in the United States in 2001. TDF therapies were associated with possible kidney dysfunction and bone-related side effects. Gilead subsequently tested tenofovir alafenamide fumarate, or TAF, a compound similar to TDF but linked to fewer side effects. Company documents and statements cited in the litigation show that Gilead halted TAF development in 2004 after concluding that its effectiveness and safety did not differ sufficiently to justify further investment at that time.
Patients who sued asserted that TDF’s known adverse effects obligated Gilead to pursue a safer option. They also accused the company of delaying TAF’s eventual commercialization for nearly a decade in order to maximize profits, alleging that TAF’s market timing was linked to the expiration of TDF’s patent exclusivity in 2017. During oral argument in May, the plaintiffs’ attorney, Holly Boyer, told the court that Gilead had been willing to accept significant patient harm to preserve profits, saying the company stood to gain tens of billions more.
Gilead’s defense emphasized the public health benefits the company’s early TDF-based regimen delivered. In court, the company’s attorney, Joshua Rosenkranz, described TDF as achieving what he called the "holy grail" of a once-daily pill that saved millions of lives, framing Gilead’s focus on TDF as a life-preserving public-health decision.
Justice Kelli Evans was the lone dissenter. In a written dissent, she characterized Gilead’s conduct as "morally blameworthy" and argued that the drug industry already receives special legal accommodations, such as patent protection and certain exemptions from strict products liability. Justice Evans urged the California legislature to consider removing immunity from negligence claims for pharmaceutical manufacturers.
Groban responded in the majority opinion that moral blame could not be the basis for recognizing a new cause of action, noting that a wide range of "morally neutral and socially valuable" reasons may motivate companies’ development choices.
The ruling reverses the appeals court’s February 2024 finding and ends negligence claims tied to Gilead’s decision to stop development of TAF in 2004. Market reaction to the decision was muted in the immediate aftermath; shares of Gilead were down 0.2% in afternoon trading on the day of the ruling.
Legal and market implications
The court’s decision preserves a legal standard that declines to impose affirmative innovation duties on manufacturers of nondefective drugs. That outcome was supported by a wide array of pharmaceutical companies and trade groups that warned a duty to innovate could make drug development more costly and could penalize successful products, potentially depriving patients of effective therapies.
At the same time, the dissent highlights the unresolved tension between legal protections afforded to drugmakers and concerns about corporate conduct and timing in bringing safer alternatives to market. Justice Evans’ call for legislative consideration leaves open the possibility of future statutory change rather than judicially created liability.
Note: This account is based exclusively on the court’s written decision, the parties’ arguments in court, and publicly stated financial figures cited in the litigation materials.