Georgia Biotech-Friendly Tort Reform

25 Feb, 2009

Georgia Governor Sonny Perdue announced this week he is proposing tort reform legislation that will protect Georgia-based biotech companies from product liability claims.

“With this proposed legislation, we will cement our position as a leader in the biotech industry by enacting laws that respect the role of the federal Food and Drug Administration as the regulator of the safety of drugs and medical devices,” said Governor Perdue at the Georgia Chamber of Commerce’s Eggs and Issues breakfast. “The FDA approval should mean something. It certainly should imply protection from tort lawsuits. The legislation will make Georgia an even more attractive environment for biotechnology companies.”

The legislation is intended to entice biotech companies to locate in Georgia and support the companies that are currently located in the state. In order to qualify for the protection, companies would have to meet the following requirements:

  • manufacture devices or sell pharmaceuticals

  • base its corporate headquarters in Georgia

    • either employ over 200 workers in manufacturing or research and development

    • or have its principal place of research and development in Georgia.

The proposed legislation will provide that FDA approval is sufficient to protect against design defect and failure to warn lawsuits. Design defect lawsuits are based on the premise that a drug or device is faulty and caused injury, while failure to warn lawsuits maintain that health risks were not sufficiently communicated to doctors and patients.

The tort reform legislation, as proposed, will not apply if the biotech company has defrauded the FDA or the drug or device was used in an off-label manner.

“Georgia’s stature in the biotech industry is growing, and this legislation will be a key tool in helping us recruit top-flight companies to the state,” said Ken Stewart, commissioner of the Georgia Department of Economic Development. “Biotech is one of Georgia’s strategic industries and provides the high-quality jobs we are focused on growing.”