Product liability is a legal term used to describe a special duty the law imposes on all manufacturers, including pharmaceutical companies. A person injured by some hidden defect in a product while using the product for its intended purposes does not have to prove the manufacturer was negligent in order to receive financial compensation. In fact, even with proof that the manufacturer was not negligent and could not have foreseen the product defect that caused the injury, a legal claim for compensation may still remain valid.

This rule (sometimes called “strict liability” or “absolute liability,”) has more to do with social policy than with purely legal matters. The idea behind it is to avoid placing the risk of catastrophic loss on an individual consumer. The manufacturer can purchase insurance to cover such claims, increasing the price of the manufactured product to cover the cost of insurance. In this way, the risk of catastrophic loss is divided among all purchasers of the product.