Gilead Fights ‘Limitless’ Liability at California High Court

Gilead Sciences Inc. is seeking to knock down a groundbreaking theory of product liability advanced by thousands of patients who argue the drugmaker had a legal obligation to keep developing an alternative HIV drug with fewer side effects.

Patients who took Gilead’s tenofovir drug argue the company breached a duty of reasonable care more than two decades ago when it paused development of a less toxic treatment. The California Supreme Court on Wednesday will consider Gilead’s appeal of trial and appellate court rulings that allowed the plaintiffs’ negligence claim to proceed.

The court’s ruling could shift the arena of products liability law not only for drugmakers in California, but for manufacturers nationwide, who are watching to see whether they’ll be held to a new, higher standard around product innovation.

“Even just the threat of such litigation,” wrote the Atlantic Legal Foundation in an amicus curiae brief in support of Gilead, “not only would deprive the public of beneficial new products that a company chooses to research & develop, but also could destabilize the economy, weaken national security, and result in additional detrimental effects.”

Gilead says that mandating the continued development of treatments that might have fewer side effects would chill innovation by opening drugmakers to liability for drugs that they begin to develop but fail to bring to market.

“Patient advocacy groups, legal experts, and innovative companies across industries share our concerns that the lower court’s ruling would upend existing law and stifle innovation,” a spokesperson for Gilead said in a statement to Bloomberg Law.

The Drugs

Gilead released tenofovir disoproxil fumarate, or TDF, in 2001. It treats HIV and chronic hepatitis B but can have harmful effects on kidney function and bone density.

Not long after its release, the drugmaker began testing tenofovir alafenamide fumarate, or TAF, a similar drug which carries a lower risk of adverse effects. Gilead discontinued development of TAF in 2004, saying the differences between the two drugs were insufficient to justify further investment.

Patients who experienced TDF’s side effects argue Gilead’s decision to discontinue development of a potentially safer alternative was motivated by a desire to increase the sales of TDF. Releasing TAF later would grant the company “market exclusivity” and also extend its patent coverage to coincide with the expiration of TDF’s patent in 2017, they allege in their answering brief.

Robert K. Jenner, a personal injury and mass torts attorney who represents plaintiffs, said this case is about whether a drug company can sit on a safer product to “squeeze more profit” out of a drug it knew was causing damage.

“This is not a boardroom decision that deserves immunity,” Jenner said. “This is exactly the type of conduct that the tort system exists to deter.”

Boundless and Limitless

Gilead says that after it halted development on TAF, it devoted resources to creating a single-tablet TDF medicine that revolutionized that treatment, which previously required taking “multiple medicines on different schedules” daily, according to its petition to the California Supreme Court.

Allowing this litigation under the theory that it was obligated to develop TAF would apply a “boundless” duty to manufacturers, Gilead argues. Such a “limitless” liability would cause manufacturers to have to behave in ways that are “highly detrimental to consumer welfare and safety.”

Experiments that may “yield too much knowledge” could be vetoed by companies, Gilead said in its petition. Businesses may “think twice” before bringing a safer product to market.

A victory for patients in this litigation could force manufacturers to “immediately commercialize any product that is arguably safer than an existing product,” associations representing manufacturers, which include National Association of Manufacturers, the Consumer Technology Association, and the American Chemistry Council, said in an amicus brief in support of Gilead, warning it would upend long-settled products liability law.

The Sky Isn’t Falling

The patients’ attorneys say California law on negligence liability is on their side.

“The other side doesn’t seem to be arguing with the law,” said Jonathan Eisenberg, in-house attorney for AIDS Healthcare Foundation. “They seem to be arguing with like this ‘the sky is falling’ implications with the decision.”

The theory of liability is rooted in California’s civil code presuming a duty of reasonable care in circumstances where harm is foreseeable. This has been codified in state law for over 100 years, said Elizabeth Graham, a principal at Grant & Eisenhofer PA, who has also represented some of the plaintiffs since 2018.

Siding with the patients shows that “negligence is still negligence” in California, Graham said. She called the concerns expressed by the drugmaker and its various amicus supporters more than “a little bit of a red herring,” but rather “a lot a bit of a red herring.”

“The world hasn’t ended in those 100 years,” Graham said. “The statute has always been the same and it dictates that everyone, including corporations, is responsible for any injuries caused by their failure to exercise reasonable case.”

Orrick, Herrington & Sutcliffe LLP represents Gilead.

The case is Gilead Tenofovir Cases, Cal., No. S283862, 5/6/26.