Instruction Errors in Medication: Liability of Contract Manufacturers

In a recent decision, the Austrian Supreme Court (OGH) confirmed the liability of a pharmaceutical company and a manufacturer due to an instruction error involving a codeine-based cough syrup. Unlike construction or manufacturing defects, where the product itself is defective, the error in this case was exclusively related to the defective package insert. The insert failed to adequately warn about the potentially fatal risks of the medication, especially for children, in cases of overdose, interaction with other medications, or pre-existing conditions such as pneumonia.For the German version of this article, kindly refer to the PDF linked below (bottom of this page under "Files").

Liability of the Second Defendant as an Apparent Manufacturer

The second defendant was held liable as an apparent manufacturer under § 3 PHG, despite arguing that it merely acted as a "contract manufacturer" for the first defendant (the marketing authorization holder). The OGH rejected this argument, ruling that the second defendant's identification as the "manufacturer" in the package insert created the impression that it was responsible for the final product. In a pivotal part of its reasoning, the OGH stated:

“Even if the second defendant was not responsible for the content of the package insert and could not amend it via the BASG, it has not claimed that it lacked the ability to influence the first defendant as its contractual partner to ensure the regular updating of the package insert in line with the professional information.”

This passage highlights that the second defendant was liable not only due to its identification as the manufacturer but also because it failed to take adequate measures to ensure the accuracy and currency of the package insert. Even if it could not create the insert itself, it should have exerted influence on the first defendant.

Key Findings of the Supreme Court on Apparent Manufacturer Liability

1. Identification as Manufacturer: The second defendant was listed as the "manufacturer" in the package insert. From the consumer’s perspective, this established responsibility for the entire product.

2. Responsibility for Safety: Even as a contract manufacturer, the second defendant should have ensured that the product was delivered with an accurate package insert.

3. Duty to Influence: The second defendant had the ability to influence the first defendant to correct errors in the package insert. Its failure to do so was a critical factor in the ruling.

Additional Note

The first defendant, as the marketing authorization holder, was also held liable. It argued that the package insert was part of the mandatory approval documentation (§ 9 Abs 1 Z 7 AMG) and thus subject to regulatory authorization. However, the OGH reaffirmed the prevailing view that regulatory approval of a medication does not preclude liability under the PHG.

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Sabadello Legal regularly assists Austrian and international clients with matters of product liability and product safety. We advise and represent renowned brand manufacturers in connection with product recalls as well as in proceedings concerning alleged claims for damages and recourse claims.

Contact & Questions:
Andreas Sabadello, attorney at law
+43 1 9971037
office@sabadello.legal