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From Products Liability Law Daily, May 14, 2013

Maker of Cancer Treatment Drug Challenges Punitive Damage Award as Unconstitutional

By Pamela C. Maloney, J.D.

A manufacturer of two bisphosphonate drugs commonly used to treat patients with breast cancer that had metastasized to the bone has asked the U.S. Supreme Court to review an award of punitive damages entered against it in a products liability action brought on behalf of a woman who developed osteonecrosis of the jaw (ONJ) allegedly as a result of taking the drugs (Novartis Pharmaceutical Corp. v. Fussman, May 9, 2013). In addition to compensatory damages in the amount of $287,000, a North Carolina jury awarded the patient and her spouse $12,600,000 in punitive damages. The trial court reduced the punitive damages award to $861,000. The award of punitive damages was upheld on appeal by the U.S. Court of Appeals for the Fourth Circuit in an unpublished decision (Fussman v. Novartis Pharmaceutical Corp., February 8, 2013, Per curiam).

Constitutional challenge. The drug manufacturer, Novartis Pharmaceutical Corp., stated in its petition for certiorari that allowing a jury to punish it though an award of punitive damages for its alleged misconduct in the marketing and labeling of two FDA-approved prescription drugs (Aredia and Zometa®) presented two issues under the Supremacy Clause of the U.S. Constitution: (1) whether a private plaintiff could use punitive damages to enforce legal standards of conduct in the marketing of a federally-approved prescription drug, notwithstanding the exclusive grant of enforcement authority to the FDA under federal law, and (2) whether a state could penalize a pharmaceutical manufacturer through the imposition of punitive damages for its exercise of a right granted to it under federal law to market a brand name prescription medication.

According to the manufacturer, the 4th Circuit’s holding that the punitive damages award did not conflict with federal law was based on an erroneous reading of the U.S. Supreme Court’s decision in Wyeth v. Levine, 555 U.S. 555. The manufacturer argued that the Wyeth case involved only compensatory damages which serve a different purpose than punitive damages. Punitive damages are not aimed at compensating injuries but are intended to penalize and deter conduct deemed "repugnant to society." Thus, the drug manufacturer argued, states could not, consistent with the Supremacy Clause and federal law, grant individuals the private power to enforce federal drug marketing standards or to punish perceived violations of those standards. To do so would impermissibly conflict with the federal drug regulation scheme and would allow individual plaintiffs to do exactly what federal law states they cannot do—privately enforce FDA labeling requirements for prescription drugs by subjecting "noncompliant" drug manufacturers to financial penalties.

Questions presented. In light of the FDA’s exclusive power to enforce the detailed federal regulatory scheme by which drug companies obtain the exclusive right to market a prescription drug in the United States, the manufacturer presented the following three questions for review:

  1. Did the FDA’s exclusive authority to punish violations of federal law governing the lawful marketing of prescription drugs preempt state tort law which allowed the imposition of punitive damages to punish the same activity?
  2. Did a punitive damages award imposed in connection with the marketing of an FDA-approved drug impermissibly penalize a drug maker under state law for the exercise of its federal right to market the prescription drug? and
  3. Did the Fourth Circuit err in basing its holding in this case solely on Wyeth, which did not address punitive damages?

The case number is: 12-1339.

Attorneys: Joe G. Hollingsworth (Hollingsworth LLP ) for Novartis Pharmacueticals Corp.

Companies: Novartis Pharmacueticals Corp.

MainStory: TopStory DamagesNews DrugsNews

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