Sterling Drug, Inc. v. Yarrow

• Decision Date: 12 March 1969
• Docket Number: No. 18901.,18901.
• Citation: 408 F.2d 978
• Parties: STERLING DRUG, INC., a Corporation, Appellant, v. Irene M. YARROW, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

408 F.2d 978 (1969)

STERLING DRUG, INC., a Corporation, Appellant, v. Irene M. YARROW, Appellee.

No. 18901.

United States Court of Appeals Eighth Circuit.

March 12, 1969.

COPYRIGHT MATERIAL OMITTED

R. J. Leonard, Terence O'Loughlin of Altman, Geraghty, Leonard & Mulally, St. Paul, Minn., for appellant; Woods, Fuller, Shultz & Smith, Sioux Falls, S. D., with him on the brief.

Ellsworth E. Evans, of Davenport, Evans, Hurwitz & Smith, Sioux Falls, S.D., for appellee; Robert C. Heege, Sioux Falls, S. D., with him on the brief.

Robert E. Giles, Gen. Counsel, Rodney R. Munsey, Asst. Gen. Counsel, and Carl T. DeMarco, Atty., Pharmaceutical Manufacturers Assn., Washington, D. C., on brief for Pharmaceutical Manufacturers Assn., amicus curiae.

Before VOGEL and LAY, Circuit Judges, and BECKER, Chief District Judge.

BECKER, Chief District Judge.

This is an appeal by Sterling Drug, Inc. ("Sterling" hereinafter) from a judgment in favor of appellee, a South Dakota housewife and mother of four children, for damages in the sum of $180,000.00 in a civil diversity product liability action. Appellee claimed that her vision had been permanently damaged by use of a prescription drug manufactured and sold by appellant for use in treatment of rheumatoid arthritis and other diseases.

The action was tried without a jury before Chief Judge Fred J. Nichol of the United States District Court for the District of South Dakota whose findings of fact and conclusions of law were stated in a "Memorandum Decision" reported in 263 F.Supp. 159.

Appellee based her claim for damages on specifications of alleged negligence of the defendant in testing, manufacturing and marketing the drug "Aralen" (also known as "Aralen Phosphate") and in failing to warn the public, appellee, her physician and retail drug dispensaries, from which appellee purchased the drug, of the potential danger to "eyesight and vision" from the use of the drug, which "the defendant well knew, or should have known in the exercise of due care."

After a plenary evidentiary trial the trial court found in favor of the appellee because of negligent failure of Sterling to warn appellee's prescribing physician, Dr. Robert G. Olson of Sioux Falls, South Dakota.

Assignments of Error

Appellant Sterling assigns error in the findings and conclusions of the trial court in the following points:

1. "The trial court\'s ultimate determination herein was that appellant did not fulfill its duty to warn appellee\'s doctor of the possible side effects of Aralen. However, said ultimate determination was induced by an erroneous conclusion of law whereby the trial court charged appellant with a duty to warn `by the most effective method.\' As a consequence, the appellate court is free to disregard the trial court\'s erroneous conclusion of law as well as its ultimate determination that appellant did not fulfill its duty to warn.

2. "The trial court\'s finding that detail men `* * * present the most effective method of warning the doctor * * *\' is unsupported by the evidence and is clearly erroneous.

"The overwhelming weight of the evidence indicates that appellant made reasonable effort to warn. (by)

"The warning letter. (and)

"The Physician\'s Desk Reference."

The brief of amicus curiae, Pharmaceutical Manufacturers Association, supports appellant's assignments of error.

Evidence of History, Uses and Side Effects of Accused Drug Early History of Drug —

The accused drug in this case is chloroquine phosphate which was marketed by appellant, under the registered trademark names "Aralen Phosphate" and "Aralen". Its chemical structure is described as follows: "7-chloro-4 (4 diethylamino-1-methylbotylamino) quinoline diphosphate." It is also known as one of the "4-aminoquinolines." In the testimony on the early history of the accused drug by appellant's witness Dr. Justus B. Rice, formerly Director of appellant's Department of Medical Research from 1937 to 1960 (corroborated in part by other oral and documentary evidence) the history of 4-aminoquinoline compounds (of which the accused drug was one) was described substantially as follows: At Elberfeld, Germany, about 1935, chloroquine resorcinate (a 4-aminoquinoline) was synthesized by a researcher. Chloroquine resorcinate, among 4 other aminoquinolines, was superficially tested by Dr. Kikuth in the Canaries and found to be active in malaria. Dr. Kikuth then sent it to Dr. Seolli of Rome who tested it, with other compounds, on five patients. Dr Seolli found chloroquine resorcinate to be too toxic for use in humans. Dr Seolli discarded chloroquine resorcinate in favor of a similar 4-aminoquinoline compound, called "Sontochin". Appellant then had a cross-licensing agreement with I. G. Farben Industry of Germany from which it learned of the synthesis of chloroquine phosphate. I. G. Farben Industry sent appellant the manufacturing "know how" of all compounds which it synthesized. This information "lay fallow" in appellant's files until the onset of World War II. Then, for non-medical reasons, an urgent demand arose for an anti-malarial drug which was better than quinine and atabrine. So the National Research Council of the United States began a "crash program" to get this new anti-malarial drug as quickly as possible, forming a Committee for Anti-Malarial Studies. This committee enlisted the aid of and endowed everyone who knew anything useful about synthesizing or making anti-malarial drugs.

In the spring of 1945, just before the end of the war in Europe, the United States Army sent Dr. Rice, as a member of the Combined Intelligence Subcommittee (G-2) to Europe to question German scientists on work or information which might be useful in the war against Japan. In that duty Dr. Rice heard of chloroquine phosphate.

By the United States Government, the drug was then given the most comprehensive and painstaking study theretofore ever given a drug before it was put on the market. In this study every compound which anyone suggested to be possibly useful in malaria was sent in, screened and tested. About 16,000 compounds were given preliminary screening. Most of them were inactive, but there were about 80 compounds thought to be active. These 80 compounds were tested in several species of animals for activity in animal malaria, and toxicity studies were made in several species of animals. For one or more reasons all except 14 of the 80 compounds were eliminated. These 14 compounds were then tested on humans who were prisoners in Statesville Prison in Illinois and in the Atlanta Penitentiary in Georgia. Of the 14 compounds, all except chloroquine phosphate were eliminated. Then with approval of the Food and Drug Administration of the United States ("FDA" hereinafter) the drug was put on the market.

Dr. Rice and Dr. Foley¹ in their testimony on the history of the accused drug stated in substance the following: In August 1946 appellant secured approval of the FDA for sale of chloroquine phosphate for use in malaria on prescription of an authorized practitioner. Thereafter reports began to appear in medical literature of successful uses of chloroquine phosphate in the treatment of amebiasis, skin diseases including lupus erythematosus, and rheumatoid arthritis. In 1951 Dr. Hadu read a paper in Spain about the beneficial use of chloroquine phosphate in rheumatoid arthritis, but the paper was not published until 1953, when it came to the attention of the appellant's staff.

Beginning in 1953 at the suggestion of interested independent investigators, appellant supplied materials, grants and services for studies of the drug, in the treatment of rheumatoid arthritis, by Dr. Bagnell of the University of British Columbia and others.

From the reports of the investigators the drug seemed to be active and the results seemed to be good in the treatment of rheumatoid arthritis. So in July 1957 appellant made application to FDA for approval of use of chloroquine phosphate in rheumatoid arthritis and lupus erythematosus. Within two months, approval of this application was received. At some unspecified time prior to July 1959 the drug was also approved for use in extraintestinal amebiasis.

At all times relevant, the drug was supplied in tablets of 250 milligrams each, and the dosage for adults in the treatment of rheumatoid arthritis recommended by appellant was 250 mg. daily.

Evidence of History of Treatment and Use of the Drug by Appellee

Appellee was a patient of a clinic in Sioux Falls, South Dakota, since 1949 at least. On August 1, 1953, Dr. Robert G. Olson, a physician engaged in the general practice of medicine, began practice in Sioux Falls as an associate of this clinic. Appellee first consulted Dr. Olson as a patient April 7, 1954, for influenza.

Appellee had been treated by a former associate at the clinic for inflammatory rheumatoid arthritis in December 1950. Later in January 1951, she was admitted to the Sioux Valley Hospital for four days for treatment of arthritis, as a result of which she began receiving injections of a medication, known as "Cortone", a trade name. She continued to receive these injections, at intervals, until January 31, 1951.

At other times from 1950 to 1958, appellee had suffered from arthritis which she had controlled reasonably well with salicylates.

In January 1958, appellee complained to Dr. Olson of increased arthritic activity and increased discomfort. Dr. Olson, who had been introduced to the accused drug by appellant's "detail man", William Wilka, prescribed the accused drug for treatment of appellee's arthritis. For this, Dr. Olson, whose clinic did not stock drugs, prescribed the dosage of 250 mg. daily recommended by appellant as a standard moderate dosage. The prescription was ordered by Dr. Olson to be refillable on order of the patient without further prescription, with the intention that the patient should continue its use daily for an indefinite period of time. At this time appellant had given no...