Supreme Court expands preemption to design defect claims, FDA to release new generic labeling rule

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July 11, 2013

Supreme Court expands preemption to design defect claims, FDA to release new generic labeling rule 

Alyssa E. Lambert

The Supreme Court recently held 5-4 that design defect claims that turn on the adequacy of a generic drug’s warnings are preempted under Mensing, allowing generic drug companies to escape liability. But the FDA is planning to publish a new drug labeling rule in September.

When confronted with the question of whether federal law preempts state products liability claims that allege a generic drug was unreasonably dangerous and defective, the Supreme Court struck another blow to consumers. It held 5-4 that design defect claims that turn on the adequacy of a drug’s warnings are preempted under Pliva, Inc. v. Mensing. This decision allows generic drug companies to escape liability, leading plaintiff lawyers and members of Congress to urge the FDA to amend its generic drug regulations. The agency is planning to publish a new drug labeling rule in September. (Mutual Pharm. Co., Inc. v. Bartlett, 2013 WL 3155230 (U.S. June 24, 2013).)

The case involved Karen Bartlett, a New Hampshire woman who developed Stevens-Johnson syndrome (SJS)—a rare drug reaction and a life-threatening skin condition—when she used the generic anti-inflammatory drug sulindac for shoulder pain. This resulted in burn-like lesions on almost two-thirds of her body and permanent near-blindness.

The Court extended Mensing—which held that FDA regulations bar failure-to-warn suits against generic drugmakers—to design defect claims. Justice Samuel Alito, writing for the majority, ruled that it is impossible for sulindac’s maker, Mutual Pharmaceutical Co., Inc., to comply with its federal law duty not to alter the drug’s label or composition and its state law duty to either strengthen the warning label or change the drug’s design. Currently, generic drugmakers cannot change their labels unless the brand-name equivalent does.

The ruling overturns a $21 million verdict that a federal jury awarded to Bartlett, who had brought several products liability claims against Mutual. In 2012, the First Circuit upheld the verdict, concluding that Bartlett’s design defect claim was not preempted because federal law does not render compliance with state law impossible, and Mutual could have stopped selling sulindac.

Before the Supreme Court in March, Mutual and the U.S. government argued that federal law preempted the New Hampshire statute, as Trial News previously reported.

The Court held that the First Circuit’s “stop-selling” rationale was “no solution” and that adopting it would render impossibility preemption a “dead letter.” The majority also asked Congress to provide an “explicit” resolution of the preemption issues plaguing the drug industry and blamed a combination of factors for Bartlett’s injuries, including the FDA’s decision to approve sulindac’s sale.

Louis Bograd, senior litigation counsel at the Center for Constitutional Litigation in Washington, D.C., said that the Court’s application of impossibility preemption was wrong. “The Court has previously held that true impossibility exists only where one government system requires what the other prohibits,” said Bograd, who wrote an amicus brief for AAJ in Bartlett and also represented the plaintiff before the Court in Mensing. “But you can have one government system require or prohibit something that the other makes permissive, and that is not impossibility preemption. Before Mensing, that was a very well-established doctrine, and the mere fact that state regulation might go beyond federal requirements or vice versa did not result in impossibility preemption.”

Justice Stephen Breyer dissented, with Justice Elena Kagan joining, but it was Justice Sonia Sotomayor’s dissent (with Justice Ruth Bader Ginsburg joining) that was a critical indictment of the majority’s decision. Sotomayor wrote: “The Court appears to justify its revision of respondent Karen Bartlett’s state-law claim through an implicit and undefended assumption that federal law gives pharmaceutical companies a right to sell a federally approved drug free from common-law liability.”

Sotomayor and Ginsburg said that Mensing should not have applied. “The most troubling aspect of the majority’s decision to once again expand the scope of this Court’s traditionally narrow impossibility preemption doctrine is what it implies about the relationship between federal premarket review and the state common law remedies,” Sotomayor wrote.

However, plaintiff attorneys said one potential bright spot is footnote 4. The majority said it was not addressing the issue of state design defect claims that parallel the federal misbranding statute, which requires a manufacturer to pull a drug from the market when it is “dangerous to health.” A drug may be considered misbranded based on new scientific evidence that becomes available only after the FDA cleared the drug for sale.

“Footnote 4 may just be a red herring. . . . But the Court acknowledged that there might not be preemption of state design defect claims where you have new, scientifically valid info that the drug was not safe,” said Bograd. “It certainly provides an avenue for plaintiffs to pursue these claims.”

Houston attorney Collyn Peddie, who handles pharmaceutical litigation, said that Bartlett was not a “knockout punch” and that plaintiffs can still bring claims against generic drugmakers, including claims based on off-label use, delays in implementing label changes, and negligent misrepresentation. She added: “There is also the parallel claim, which the Court seems to want to preserve. So there is a path that you can take, and there is a needle that you can thread.”

There have been renewed calls for the FDA to repair the widening gap between brand-name and generic drug regulation. Last month, the consumer activist group Public Citizen issued a report highlighting the hazards that were discovered years after drugs were placed on the market and the risk to patients. At least 53 drugs the FDA approved more than 10 years ago have required new black-box warnings over the past five years. The report also lists 434 generic drugs for which no brand-name equivalent remains.

After the Bartlett decision, seven congressmen sent a letter to FDA Commissioner Margaret Hamburg urging the agency to amend its rules expeditiously to allow generic drugs to alter their labels through a mechanism similar to the “changes being effected” (CBE) process, which allows brand-name manufacturers to modify their labels.

It appears that the FDA might be ready to consider such a change. Last week, the Office of Management and Budget published a regulatory notice where the FDA announced its intention to issue a proposed new drug labeling rule, which would allow generic drugmakers to change their labels using the CBE process and would “create parity” between the regulatory treatment of brand-name and generic drugs. The FDA did not release any details on the new rule’s language or content, which it is planning to issue in September.

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