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From Health Law Daily, June 24, 2013

Design-defect lawsuits against generic drug manufacturers preempted by federal law

By Anthony H. Nguyen, JD

The U.S. Supreme Court ruled that generic drug manufacturers are not liable for injuries arising from design-defect claims in the context of competing federal and state laws, because the manufacturers are not permitted to make unilateral changes to drug labels (Mutual Pharmaceutical Company, Inc. v Bartlett, June, 24, 2013, Alito, S). In the 5-4 decision, the Court held that state-law design-defect claims that rely on the adequacy of a drug’s warning labels are preempted by federal law as previously interpreted in Pliva, Inc. v. Mensing.

Background. Karen Bartlett (Bartlett) had sued Mutual Pharmaceutical (Mutual), the manufacturer of a generic nonsteroidal anti-inflammatory drug known as sulindac, for injuries. In Pliva, the Supreme Court had severely limited the conditions under which consumers of generic drugs could sue the generic drug manufacturers, ruling that generics did not have control over what warning labels said and, therefore, could not be sued for not alerting patients to the risks of taking their drugs. Under federal law and FDA regulations, generic companies are not allowed to deviate from the brand-name drug they are copying.

Bartlett argued, contrary to the Pliva decision, that sulindac itself was defective, not that its warning label was inadequate. However, the New Hampshire state law that Bartlett relied upon stated that if the design of the product made a warning necessary to avoid risk of harm, the lack of warning or an inadequate warning classified the drug product as defective. Mutual Pharmaceutical argued that similar to a drug label, it had no control over the drug’s design.

The U.S. Court of Appeals for the First Circuit had distinguished the Court’s holding in Pliva, ruling that Mutual failed to adequately warn of dangers of sulindac usage and was responsible for injuries suffered by Bartlett after taking sulindac.

Affirmative duty. New Hampshire’s strict liability system created an affirmative duty for drug manufacturers to design their products in a foreseeably safe manner; in turn, a duty to strengthen warnings was imposed. Under the Supremacy Clause, from which the Court derived its preemption doctrine, any state law which is contrary to federal law must yield. Even without express preemption, the Court found state law to be impliedly preempted in circumstances where it would be “impossible” for the affected party to comply with both federal and state requirements.

“Stop-selling” rationale. The First Circuit had distinguished Pliva by noting that generic manufacturers facing design-defect claims could “choose not to make the drug at all” and thus comply with both federal and state law. The Court rejected this line of reasoning, the “stop-selling” rationale, as incompatible with its previous preemption jurisprudence. The Court noted that its preemption cases presumed that a drug manufacturer seeking to satisfy both federal and state law obligations was not required to cease all actions in order to avoid liability. Permitting such rationale would mean that the vast majority of cases were incorrectly decided by the Court in which it found impossibility preemption present.

Under 21 U.S.C. secs. 355(j)(2)(A)(ii)-(v) and (8)(B), a generic drug must have the same active ingredients, route of administration, dosage form, strength, and labeling as the brand-name drug on which it was based. Mutual could not make sulindac in another composition; redesign was not possible and to change sulindac would require that Mutual file a new drug application with the FDA. Thus, the only way that Mutual could escape liability under New Hampshire state law was to strengthen the warning label, in direct conflict with 21 CFR secs. 314.94(a)(8)(iii) and 314.150(b)(10), which do not allow generic drug manufactures to change their labels.

In the absence of any sort of explicit expression of congressional intent to resolve preemption issues in the prescription drug context, the Court found that it was impossible for Mutual to comply with both its state law duty to strengthen warnings for sulindac and its federal law duty not to alter sulindac’s label. Federal law required a specific label for sulindac, and the state law forbade use of that label. Accordingly, the Court held that New Hampshire’s requirements were preempted and reversed the First Circuit’s decision.

Sotomayor dissent. Justice Sotomayor dissented from the majority opinion, noting that federal law did not pose a barrier to Bartlett’s recovery. Justice Sotomayor discussed the role that state common law undertook as complementary to federal drug regulations. She noted that New Hampshire’s law on design-defect claims did not impose a legal obligation that Mutual had to violate federal law to satisfy. The warning label was just one factor in a nonexclusive list for evaluating whether a drug was unreasonably dangerous; an adequate label was neither necessary nor sufficient condition for avoiding design-defect liability in New Hampshire.

Rather, the state law was an incentive for drug manufacturers to make changes to avoid liability. The jury verdict was an “event” that motivated an optional decision on Mutual’s part, and did not rise to the level of a federal requirement. As a result, Justice Sotomayor wrote that Mutual’s impossibility defense was inapplicable and that the majority’s opinion ignored congressional intent to preserve state common law liability.

Breyer dissent. Justice Breyer dissented, noting that the FDA’s view on the matter could not be given special weight; the agency had held no hearing or solicited opinions. Additionally, unlike the medical device arena, Justice Breyer wrote that federal law contained no general preemption clause in the context of prescription drugs. He also noted that the FDA had conflicting views of labeling and design requirements between brand-name and generic drugs.

Breakdown of votes. Justice Alito wrote the 5-4 decision, joined by Chief Justice Roberts, and Justices Scalia, Kennedy, and Thomas. Justice Breyer dissented, joined by Justice Kagan. Justice Sotomayor also separately dissented, joined by Justice Ginsburg.

The case number is 12-142.

Attorneys: Jay P. Lefkowitz (Kirkland & Ellis LLP) for Mutual Pharmaceutical Company, Inc.

Companies: Mutual Pharmaceutical Company, Inc.

MainStory: TopStory PLDrugNews LabelingNews DrugBiologicalNews SupCtNews

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