Supreme Court Issues Important Preemption Ruling

The Supreme Court last week reversed the First Circuit decision in Mutual Pharmaceutical Co. v. Bartlett, No. 12-142 (U.S., 6/24/13).

Readers will recall that in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), the Supreme Court held that state tort law claims against generic drug manufacturers based on the alleged inadequacy of the drug labeling are preempted; under the Hatch-Waxman Amendments to the Food, Drug and Cosmetic Act, generic drug labeling must be the same as the labeling of the reference-listed drug. Because generic drug manufacturers cannot independently change the labeling, state law failure to warn claims are preempted.

Plaintiffs proceeded to hunt for exceptions, ways around the ruling.  One of the strategies was to resurrect design defect theories, which traditionally were not a major aspect of most drug plaintiff claims. This case was tried on a design defect theory of liability after the plaintiff’s failure to warn claims were dismissed prior to trial and the district court rejected the generic manufacturer’s preemption defense on the design claim.  The jury found for plaintiff, and defendant appealed, arguing that just as the manufacturer cannot alter the label, once a drug—whether generic or brand-name—is approved, the manufacturer is prohibited from making any major changes to the qualitative or quantitative formulation of the drug product, including active ingredients, or in the specifications provided in the approved new drug application.  In Bartlett, the First Circuit held that the plaintiff’s state law theory of liability could nevertheless be reconciled with federal law because, although the generic manufacturer could change neither the design nor the labeling, it could avoid liability if it stopped selling the drug entirely within the state.

The Supreme Court reversed.

New Hampshire imposes design defect liability where the design of the product created a defective condition unreasonably dangerous to the user. To determine whether a product is “unreasonably dangerous,” the New Hampshire Supreme Court employs a risk/utility approach under which a product is defective as designed if the magnitude of the danger outweighs the utility of the product. The New Hampshire Supreme Court has repeatedly identified three factors as germane to the risk-utility inquiry: the usefulness and desirability of the product to the public as a whole, whether the risk of danger could have been reduced without significantly affecting either the product’s effectiveness or manufacturing cost, and the presence and efficacy of a warning to avoid an unreasonable risk of harm from hidden dangers or from foreseeable uses.  

In the drug context, either increasing the “usefulness” of a product or reducing its “risk of danger” would require redesigning the drug: a drug’s usefulness and its risk of danger are both direct results of its chemical design and, most saliently, its active ingredients. Here, said the Supreme Court, redesign was not possible, as the FDCA requires a generic drug to have the same active ingredients, route of administration, dosage form, strength, as the brand-name drug on which it is based. Given the impossibility of redesigning the drug, the only way for the defendant to ameliorate the drug’s “risk-utility” profile—and thus to escape liability—was to strengthen the presence and efficacy of the warning in such a way that the warning avoided an unreasonable risk of harm from hidden dangers or from foreseeable uses.

That was, of course, preempted.  When federal law forbids an action that state law requires, the state law is “without effect.” Because it is impossible for generic manufacturers to comply with both state and federal law, New Hampshire’s warning-infused design defect cause of action was pre-empted with respect to FDA-approved drugs sold in interstate commerce.

The Supreme Court rejected the argument that a defendant could satisfy both laws by paying tort judgments or refraining from selling its product in that particular state. And rejected the “stop-selling” rationale as incompatible with its pre-emption jurisprudence. The Court's pre-emption cases presume that an actor seeking to satisfy both his federal and state law obligations is not required to cease acting altogether in order to avoid liability. Indeed, if the option of ceasing to act defeated a claim of impossibility, impossibility pre-emption would be all but meaningless. The incoherence of the stop-selling theory becomes plain when viewed through the lens of the previous cases. In every instance in which the Court has found impossibility pre-emption, the direct conflict between federal and state law duties could easily have been avoided if the regulated actor had simply ceased acting.

Interestingly, there is nothing in the Court's rejection of “stop-selling” limiting it to generic drugs; the rejection seems applicable to all federally regulated products because it's not based on the FDCA but is an argument “incompatible with our pre-emption jurisprudence.”

 

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Brand Name Drug Maker Not Liable To Plaintiff Who Used Generics

A federal trial court in Texas has held that a plaintiff who admitted using only generic products cannot maintain failure to warn claims against brand-name drug manufacturers. Finnicum v. Wyeth Inc.,  2010 WL 1718204 (E.D. Tex., 4/28/10). 

Finnicum alleged that her doctor prescribed metoclopramide to treat her heartburn sometime in 2003 and that she regularly ingested a generic form of the drug until at least 2007. Finnicum stipulated, however, that she never ingested any form of metoclopramide manufactured or distributed by defendants Wyeth or Schwarz. In mid-2007, Finnicum alleged she began exhibiting symptoms of tardive dyskinesia, a neurological disorder characterized by involuntary movements, especially of the lower face. Finnicum contended that her long-term ingestion of metoclopramide caused her to develop the disease.

She brought suit, asserting causes of action against Wyeth and Schwarz for negligence, strict products liability, breach of warranty, fraud, and violations of the Texas Deceptive Trade Practices Act.

Although plaintiff never ingested any form of metoclopramide that defendants manufactured or distributed, she alleged that manufacturers of generic metoclopramide are required by federal law to use brand name warnings when selling their products. Finnicum further contended that physicians rely on brand-name warnings when prescribing generic drugs. Finnicum maintained that defendants, as manufacturers of the brand name drug (Reglan), failed to provide adequate warnings of the long-term effects of metoclopramide use. And that impacted the warnings she did get.

The court granted summary judgment to the defendants, joining the majority of courts that have considered this question. Texas law applied. The Texas Supreme Court has stated that a manufacturer generally does not have a duty to warn or instruct about another manufacturer's products, even though a third party might use those products in connection with the manufacturer's own products. Thus, Texas law does not permit a plaintiff who ingested another manufacturer's drug to maintain a failure-to-warn claim against a brand-name manufacturer.  This result is in accord with, for example, the Eighth Circuit in Mensing v. Wyeth, Inc., 588 F.3d 603 (8th Cir.2009); see also Foster v. American Home Prods. Corp., 29 F.3d 165 (4th Cir. 1994).

The court expressly rejected the California decision, Conte v. Wyeth, Inc., 85 Cal.Rptr.3d 299 (Cal.Ct.App.2008). In Conte, the court extended a brand name drug manufacturer's duty of care regarding product information to patients who were injured by generic brands. This ruling would impose a duty that would stretch the concept of foreseeability too far.