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From Products Liability Law Daily, May 1, 2014

Generic drug manufacturers may not unilaterally change ingredients; thus, preemption of design defect claims affirmed

By Harold M. Bishop, J.D.

The Third Circuit has affirmed a district court decision to preempt the strict-liability design-defect claims brought by many individuals from numerous states against the generic manufacturers of the osteoporosis drug, alendronate sodium. The district court ruled that the claims were preempted because the generic manufacturers could not, under federal law, lawfully change either their labeling or the active ingredient design of their generic formulations, and could not be expected to stop selling their drugs. The court of appeals found that the U.S. Supreme Court has stated that generic manufacturers have no control over the active ingredient design or labeling of their drugs and cannot be expected to exit the marketplace as a remedial action. For this reason, and because the injured individuals failed to identify anything the generic manufacturers could do to reconcile their conflicting duties under state and federal law, the Third Circuit affirmed the district court’s dismissal based on preemption (In re Fosamax (Alendromate Sodium) Products Liability Litigation (No. II), April 30, 2014, Jordan, K).

Background. This case involved products liability claims by 91 individuals from 28 states (Plaintiffs) who allegedly suffered long-bone fractures because they took Fosamax® or the generic equivalent of that drug, alendronate sodium. The Food and Drug Administration (FDA) approved Merck Sharp & Dohme, Corp.’s (Merck) New Drug Application (NDA) for Fosamax® in September 1995. Teva Pharmaceuticals USA, Inc., one of the Generic Defendants, then developed alendronate sodium—a generic form of the branded drug—and obtained FDA approval on its Abbreviated NDA in February 2008. The other Generic Defendants subsequently obtained approval for their alendronate sodium formulations as well.

District court action. The Plaintiffs sued Merck, as well the other Generic Defendants, in Missouri state court. The Plaintiffs alleged the "concealment of risks associated with [Fosamax® and/or alendronate sodium]," "gross exaggeration of the purported fracture reduction benefits conferred by the drugs," and "over-promotion of the drugs for non-approved, or ‘off-label,’ indications." Specifically, the Plaintiffs brought state products liability claims under theories of design defect, failure-to-warn, negligence, breach of express warranty, breach of implied warranty, fraudulent misrepresentation, and negligent misrepresentation.

Merck removed the action to the U.S. District Court for the Eastern District of Missouri. The U.S. Judicial Panel on Multidistrict Litigation later centralized the action with several other Fosamax®-related lawsuits in a multi-district litigation (MDL) in the U.S. District Court for the District of New Jersey.

The U.S. District Court for the District of New Jersey granted judgment on the pleadings in favor of the Generic Defendants because it determined that the state-law claims against them were preempted by federal law. The district court held that claims against the Generic Defendants related to duties under state tort law that directly conflicted with duties under federal regulations. As such, the district court concluded that the claims against the Generic Defendants were preempted because, just as the Generic Defendants could not lawfully change drug labeling for alendronate sodium, they could not lawfully change the active ingredient design of the drug either. A number of the Plaintiffs appealed, challenging only the preemption of their design defect claims.

Relevant Supreme Court decisions. The Supreme Court’s recent opinions in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013), hold that certain state-law claims against manufacturers of generic drugs conflict directly with federal law and are without effect because of impossibility preemption. The Plaintiffs, recognizing the importance of Mensing and Bartlett, argued on appeal that their strict liability design defect claims were materially distinguishable from the claims at issue in those cases.

Mensing decision. The Mensing case involved a failure-to-warn claim brought against a generic manufacturer for failure to change its labeling to conform to known risks. Because it was impossible for the generic drug manufacturers in Mensing to "independently do under federal law what state law requires of [them]"—to change the drug label—the Supreme Court held that the state law failure-to-warn claims against the manufacturers were preempted.

Bartlett decision. While the current case was pending in the Third Circuit, the Supreme Court decided Bartlett, which considered whether design defect claims under New Hampshire law were preempted. The Supreme Court held that manufacturers do not have the option of redesigning a generic drug because, under the FDC Act’s requirements, "were [a manufacturer] to change the composition of its [generic drug], the altered chemical would be a new drug that would require its own NDA to be marketed in interstate commerce." Therefore, the Supreme Court observed that "New Hampshire law ultimately required [the defendant manufacturer] to change [the drug’s] labeling." However, under the court’s Mensing decision, federal law prevents generic drug manufacturers from changing their labels. As such, the Supreme Court held in Bartlett that because federal law prohibited the generic drug manufacturer from taking the remedial action required to avoid liability under New Hampshire law, the rule of impossibility preemption applied.

Third Circuit ruling. According to the Third Circuit, Mensing and Bartlett taken together establish that a generic drug manufacturer may not unilaterally change its labeling or change its design or formulation, and cannot be required to exit the marketplace. In sum, the Third Circuit concluded that Mensing andBartlett recognize that manufacturers have no control over the design or labeling of their generic drugs. In addition, short of exiting the marketplace, whichBartlett rejected, the Third Circuit found that the Plaintiffs failed to identify anything the Generic Defendants could have done to reconcile their conflicting duties under state and federal law. Therefore, the Third Circuit affirmed the district court’s preemption of the Plaintiffs’ strict liability design defect claims.

The case number is 12-2250.

Attorneys: Brandon L. Bogle (Levin, Papantonio, Thomas, Mitchell, Rafferty & Proctor) for Patrick Welch. Dan H. Ball (Bryan Cave) and Karen A. Confoy (Fox Rothschild) for Merck Sharp & Dohme Corp. John K. Crisham (Kirkland & Ellis) and Glenn S. Kerner (Goodwin Procter) for Barr Pharmaceuticals Inc. and Teva Pharmaceuticals USA Inc. Terry M. Henry (Blank Rome) for Watson Laboratory. Kelly E. Jones (Harris Beach) for Mylan Inc.

Companies: Merck Sharp & Dohme Corp.; Barr Pharmaceuticals Inc.; Teva Pharmaceuticals USA Inc.; Watson Laboratory; Mylan Inc.

MainStory: TopStory PreemptionNews WarningsNews DesignManufacturingNews DrugsNews DelawareNews NewJerseyNews PennsylvaniaNews VirginIslandsNews

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