Claim based on deceptive drug ads is preempted, Third Circuit holds

Susan Pannell, Associate Editor

In a ruling with potentially broad implications, a divided Third Circuit panel has ruled that the federal Food, Drug, and Cosmetics Act (FDCA) and FDA regulations preempt state consumer fraud laws relating to prescription drug advertising. (Pa. Employees Benefit Trust Fund v. Zeneca, Inc., 2007 WL 2376312 (3d Cir. Aug. 17, 2007).)

The lawsuit, a putative class action, was brought in the U.S. District Court in Delaware against Zeneca, Inc., maker of the acid reflux medications Prilosec and Nexium, by a health plan that reimbursed its beneficiaries for the costs of their prescription medicines. The plaintiffs sought damages based on advertising that they alleged was false and misleading and induced customers to purchase the higher-priced medication in the belief that it was superior.

Prilosec, which had been a $6 billion-a-year gold mine for Zeneca, was set to lose its patent protection when the company began marketing Nexium.

A published clinical study comparing 20 mg and 40 mg doses of Nexium to the approved 20 mg dose of Prilosec found that 40 mg of Nexium had a statistically superior healing rate. This study was among those used to obtain FDA approval of Zeneca’s new drug application for Nexium, and the agency later approved the drug for doses of 20 mg to 40 mg once per day.

The plaintiffs said the promotional campaign for Nexium, which included direct-to-consumer as well as physician-directed marketing, was misleading because it was based on a study that compared different doses of the two medicines. The complaint alleged violations of the consumer protection statutes of all 50 states—and in doing so set the stage for the Third Circuit’s broad ruling.

In the district court, Zeneca filed a motion to dismiss for failure to state a claim. Judge Sue Robinson found that the ads were consistent with the FDA’s approved labeling, held that the state law claims were therefore preempted, and granted the motion with prejudice.

The court of appeals panel affirmed in an opinion by Judge Brooks Smith and joined by Sixth Circuit Judge Eugene Siler, sitting by designation. The majority found that “Congress signaled its intent to give the FDA exclusive authority to regulate prescription drug advertising.” The court concluded that, in light of the “high level of specificity” in federal law and regulations regarding such advertising, allowing “generalized state consumer fraud laws to dictate the parameters of false and misleading advertising” in the prescription drug context would “pose an undue burden” on both Congress’s and the FDA’s objectives.

The fact that the allegedly fraudulent representations were based on FDA-approved labeling made this a particularly strong case for federal preemption, the court noted. The FDCA’s purpose of protecting prescription drug users would be frustrated “if states were allowed to interpose consumer fraud laws that permitted plaintiffs to question the veracity of statements approved by the FDA,” the court said.

Dissenting, Judge Robert Cowen maintained that specificity in federal regulations is an insufficient basis for finding federal preemption, and that giving effect to state consumer protection laws would not impede the FDCA’s and FDA’s objectives. Cowen emphasized that the plaintiffs were not attacking the FDA-approved labeling but instead the particular advertisements drawn from the labeling. The agency had never ruled on the veracity of those ads, Cowen noted.

The plaintiffs filed a petition for rehearing, which was denied. Craig Spiegel of Seattle, who argued on behalf of the plaintiffs, said he was “very surprised” by the holding, saying it went beyond what had been briefed and argued by the parties and that it departed from the Supreme Court’s FDA preemption principles.

The FDA’s role as an advocate of preemption in the Bush administration has drawn heated criticism by plaintiff lawyers and other consumer advocates. In several cases, they note, the FDA has actively sided with the pharmaceutical industry by filing amicus briefs urging the courts to find that state tort claims are preempted.

The agency didn’t file an amicus brief in the Nexium case, but it did in Colacicco v. Apotex, Inc., involving failure to warn of the suicide risk associated with the antidepressant Paxil. (432 F. Supp. 2d 514 (E.D. Pa. 2006).) In that case, District Judge Michael Baylson granted the drug maker’s motion to dismiss, finding he had to defer to the FDA’s position—as stated in its amicus brief and the preamble to its drug-labeling rule—that the FDCA preempted the claim. At press time, the case had been calendared for oral argument on December 10 in the Third Circuit.

AAJ regulatory counsel Gerie Voss noted that Congress recently passed new legislation to clarify its intent regarding the preemptive effect of drug safety regulations. “With the recent passage of the Food and Drug Administration Amendments Act of 2007, Congress stated its intent that FDA regulation should not preempt the field and that drug companies continue to have an independent obligation to promptly update a label to warn consumers of a drug’s risks,” Voss said.

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News & trends November 2007 | Volume 43, Issue 11

Claim based on deceptive drug ads is preempted, Third Circuit holds

Susan Pannell, Associate Editor

News & trends
November 2007 | Volume 43, Issue 11