Georgia Governor Seeks Limits on Biotech Lawsuits to Attract Firms

Georgia Governor Sonny Perdue is proposing tort reform legislation intended to protect Georgia-based biotech companies from product liability claims.

The proposed legislation would provide that Federal Drug Administration (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, would not apply if the biotech company has defrauded the FDA or the drug or device was used in an off-label manner.

Perdue says the legislation is intended to encourage 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 manufacture devices or sell pharmaceuticals, have corporate headquarters in Georgia and either employ more than 200 workers in manufacturing or research and development or have their principal place of research and development in Georgia.

“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 Gov. 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.”

“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.”

Georgia’s stake in the biotechnology sector is buoyed by the presence in the state of the Centers for Disease Control and Prevention, the Carter Center, the American Cancer Society and CARE combined with research universities such as Georgia Tech, Emory University and the Medical College of Georgia. In May, Georgia will host the 2009 BIO International Convention for the first time, showcasing the state’s importance in the industry.

Source: Georgia Department of Economic Development
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