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Product Liability in Thailand – Generics versus Branded Drugs

Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries caused by the use of the products. Generally, there are three major types of product liability claims, namely, (1) manufacturing defect, (2) design defect, and (3) a failure to warn (also known as marketing defects).

Manufacturing defects are those that occur in the manufacturing process and usually involve poor-quality materials or shoddy worksmanship.

Design defects occur where the product design is inherently dangerous or useless (and hence defective) no matter how carefully manufactured.

Failure-to-warn defects arise in products that carry inherent non-obvious dangers which could be mitigated through adequate warnings to the user, and these dangers are present regardless of how well the product is manufactured and designed for its intended purpose.

The law on product liability, in general, requires manufacturers to ensure that their products are of safe quality.

The Product Liability Act of Thailand

In Thailand, concerns and liabilities arising from the poor quality of its products reached alarming levels in 2007. Hence, in late 2007, Thailand’s National Legislative Assembly enacted the Product Liability Act, (“the Act”). Relevant sections of the Act are as follows:

“Section 5: All entrepreneurs shall be jointly liable for damages occurring to the damaged party from an unsafe product sold to the consumer. This shall apply to intentional damages or damages arising from the negligence of the entrepreneurs.

Section 6: For the entrepreneurs to be liable according to section 5, the damaged party or his prosecuting representative, based on section 10, shall prove that the damaged party sustained damages from the product of the entrepreneurs, and the use or storage of the product was done in a normal manner. However, evidence shall not be required to the effect that the damages occurred from the Action of a particular entrepreneur.

Section 7: The entrepreneurs shall not be liable for damages arising from an unsafe product if it can be determined that

1) The product was not unsafe.

2) The damaged party had knowledge that the product was unsafe, or

3) The damages occurred from inappropriate use or storage of the product determined by the instructions for appropriate use and storage, warning, or product information accurately and clearly provided by the entrepreneurs.

Section 8: The party producing products by order of the party authorizing the production shall not be liable if evidence can be provided that the danger was caused by the design of the party authorizing the production or compliance to the instructions provided by the party authorizing the production, whereas the producing party had not expected such danger.

The producer of the product components shall not be liable if it can be proven that the danger of the products was caused by the design, assembly, instructions for usage and storage, and warning or product information by the party producing the product.

Section 9: Agreements entered into between the consumer and the entrepreneurs before the damages and the statement of the entrepreneur to disclaim or place limits on his liability for damages caused by the unsafe product cannot be asserted as a disclaimer or limit the entrepreneur’s liability.

Section 10: The Consumer Protection Committee, associations and foundations certified by the Consumer Protection Committee under consumer laws shall be authorized to file legal proceedings for compensation in place of the damaged party under the stipulations related to filing of legal proceedings and prosecuting representation for legal proceedings, which shall be enforced with exceptions.

All fees shall be exempted for filing of legal proceedings in place of the damaged party under Paragraph One, with the exclusion of the final fee.”

Based on the above, it is clear that a claim for compensation against a company under the Act can only be made when the aggrieved party can prove that he or she has sustained ‘damage’ as a result of using the product of the company.

Generics versus Branded Drugs

It has, therefore, been commented that the position in law in the case of generic drugs has been that, a consumer in Thailand is restricted to claiming only against a manufacturer of a generics drug, as opposed to claiming against the manufacturer of its branded counterpart, should the consumer suffer any unexpected harmful effects as a result of using a generic drug.

If that is so, the position in Thailand with regard to the exposure of generic drug manufacturers to liability, differs from the “innovator theory” of products liability, which was recognized by a California appellate court. Under the ‘innovator theory”, a branded drug manufacturing company is imposed with the duty to warn patients whose doctors allegedly rely on its labeling information when prescribing medication, regardless of whether the patients are ultimately prescribed a branded or generic version of a drug. The said duty of the branded drug manufacturing company is to warn such patients about any adverse effect, whether it is of a branded or a generic drug.