When Is Compliance Necessary?

Because Prop. 65 was passed as part of the initiative process in California, not as a result of legislative action, it has raised numerous concerns for industry. For example, there is no risk/benefit analysis allowed; if a manufacturer or distributor knows of the presence of a chemical that is subject to the regulations, it must provide a warning. Furthermore, Prop. 65 allows for private parties or 'bounty hunters' to file claims against supposed non-compliers, seeking penalties of up to $2500 per day per violation, as well as the payment of attorneys fees.

Responsibility to Comply

Prop. 65 is applicable to pharmaceutical manufacturers. See Cal. Health and Safety Code ' 25249.6. They, likewise, are required to provide a 'clear and reasonable warning' unless they are somehow otherwise exempted from Prop. 65. The California Health and Welfare Agency (CHWA), the agency initially designated to administer Prop. 65, adopted an implementing regulation (the Regulation) stating: 'for prescription drugs, the labeling approved or otherwise provided under federal law and the prescriber's accepted practice of obtaining a patient's informed consent shall be deemed a clear and reasonable warning.' Cal. Code Reg. tit. 22, Section 12601(b)(2.

Because there is an existing comprehensive federal regulatory scheme concerning warnings on drugs promulgated by the FDA, the conflict for drug manufacturers is obvious: FDA regulations require a detailed review and approval process for the information provided in package inserts and on labeling for prescription drugs. The FDA regulations require similar information, particularly relating to safety, on any advertising for prescription drugs. Further, once the FDA approves a label, no changes may be made without its prior approval. Any unapproved changes to the label may render the product 'misbranded' under federal law and subject the manufacturer to substantial fines and penalties. See Cantor v. Warner Lambert Company, 99 Cal.App. 4th 780 (2002).

The OTC Context

Prop. 65 complaints have been filed both by the California Attorney General's Office as well as by private attorneys general in numerous cases involving over-the-counter drugs and other medical products. For example, manufacturers of dental amalgam have fought a long, losing battle with the State of California concerning information provided to dental patients as to the presence of mercury in dental amalgam.

Recently, a private attorney general initiated action against a manufacturer of an OTC nicotine patch for the cessation of smoking. In Dowhal v. SmithKline Beecham Consumer Healthcare, Cal.App.4th 8 (2002), the Court of Appeals overturning the trial court's entry of summary judgment on behalf of the defendants, determined that the Modernization Act of 1997 had a savings clause which explicitly provided that Prop. 65 and federal law were not in direct conflict. This decision has recently been depublished, as the California Supreme Court has granted review. Dowhal v. SmithKline Beecham Consumer Healthcare, No. S109306, (2002 WL 1486578) (October 23, 2002).

Not only is Smith Kline Beecham challenging the Dowhal court's decision, but the FDA likewise is challenging it, arguing that it specifically rejected the proposed Prop. 65 warning as scientifically unreliable and one that might dissuade pregnant women from trying to stop smoking, a result that would not be in the interest of good public health. The FDA argues that it carefully considers the warnings that it requires on products and, based on its expertise, has mandated the precise warning language that it concludes provides all material information relating to safety. The FDA has stressed that strict compliance with Prop. 65 may result in a narrow focus that disregards entirely the product's significance in reducing known health risks, which the FDA takes into consideration when approving warnings and labeling.

Prescription Drugs

The rules to be applied to prescription drugs are more precise than for OTC products. Not only do the enabling regulations to Prop. 65 provide a 'safe harbor,' but recent trial court decisions have determined that to the extent Regulation 12601(b)(2) does not provide for an absolute safe harbor, the imposition of Prop. 65 liability for prescription drugs is preempted by federal law.

In State of California v. Alpharma USPD Inc., Case No. 992915, the San Francisco Superior Court granted summary judgment on behalf of Alpharma against a claim by the Attorney General that Alpharma violated Prop. 65 in the labeling for its Lindane shampoo and lotion. The Attorney General sued defendant Alpharma, claiming that there were chemicals in Lindane shampoo that were 'known to the people of the State of California to cause cancer.' Alpharma moved for summary judgment on the grounds that its Lindane products contained a label approved by the FDA. The trial court agreed with Alpharma, finding that its only obligations under Prop. 65 were satisfied by the FDA-approved label, together with the 'prescriber's accepted practice of obtaining a patient's informed consent.' The court did not reach the issue of implied or express preemption.

A very recent California trial court decision, however, specifically determined that Prop. 65, to the extent that it requires additional information other than the FDA-approved label and package insert, is pre-empted. In The Vaccine Cases, JCCP No. 4246 (Los Angeles Superior Court), plaintiffs made claims, inter alia, for violation of Prop. 65. Plaintiffs claimed that they themselves or their children were poisoned with thimerosal-containing vaccines, causing personal injury and violating Prop. 65. They claimed that thimerosal contains mercury, one of the listed chemicals on the Governor's List, and that therefore there was a requirement that users be warned of reproductive toxicity. However, the defendants successfully challenged the plaintiffs' claim. Sustaining a demurrer without leave to amend on the Prop. 65 claim (Master Complaint No. 3), Judge Victoria G. Chaney determined that the manufacturers of thimerosal and thimerosal-containing vaccines were entitled to judgment in their favor on that issue. The court determined that Regulation 12601(b)(2) provided an absolute safe harbor for the manufacturers and distributors of thimersosal-containing vaccines, and thimerosal manufacturers. Further, the court determined that any imposition of Prop. 65 liability in the context of prescription drugs would substantially interfere with and impede the FDA's responsibilities to ensure that safe and efficacious drugs are available to the consuming public. Judge Chaney held that the FDA requirements govern all product information materials relating to prescription drugs, including advertising, brochures and postings, whether physically attached to the product or not. Plaintiffs have recently filed a notice of appeal.

Conclusion

Clearly, Prop. 65 is a trap for the unwary. Substantial penalties and attorneys fees can be collected either by the state Attorney General or by a private litigant acting as a private attorney general under the public benefit portion of Prop. 65. However, recent trends seem to indicate a retrenchment from strict compliance with Prop. 65, especially in the pharmaceutical context. The California Supreme Court's acceptance of Dowhal, and recent trial court decisions in Alpharma and The Vaccine Cases, indicate that state judges are more likely to view Prop. 65 as impeding the FDA's regulatory provisions, and thus pre-empted by federal law.

Frederick J. Ufkes is a partner at the Los Angeles Office of Kirkpatrick & Lockhart, LLP, and has regional and national counsel experience in product liability litigation. His experience includes serving as trial counsel in numerous toxic tort cases representing Fortune 500 companies. Ufkes litigates a wide range of issues affecting the chemical and pharmaceutical industry, including defending claims of violations of Proposition 65. He would like to thank Nicole Lee, an Associate at Kirkpatrick & Lockhart, LLP for her assistance in the preparation of this article.

The pharmaceutical industry has been heavily regulated for many years, starting with the original enactment of the Food and Drug Act in 1906. Over the years, a bewildering array of regulations has been established that affect the sale and consumption of drugs at both the federal and state levels. While many of these past regulations have been subsumed into the FDA's rules and regulations, one of the most difficult and currently pressing questions a pharmaceutical manufacturer must ask itself is whether to comply with California's Proposition 65. The manufacturer's decision to comply may have significant adverse affects on marketing and use of the drug; or conversely, imposition of stiff, costly penalties. This article provides a basic roadmap of the current landscape for compliance with Proposition 65 in the pharmaceutical context.

Background

In 1986, California voters enacted Prop. 65, 'The Safe Drinking Water and Toxic Enforcement Act.' See Cal. Health and Safety Code ' 25249.5 et seq. The purpose of Prop. 65 is to provide individuals in the State of California with information concerning exposures to chemicals that a panel of experts has determined cause cancer, birth defects and/or reproductive harm. Any person or company employing more than ten individuals is subject to Prop. 65, and manufacturers and distributors of products containing listed chemicals are required to 'give a clear and reasonable warning' before exposing anyone to a listed chemical.

Because Prop. 65 was passed as part of the initiative process in California, not as a result of legislative action, it has raised numerous concerns for industry. For example, there is no risk/benefit analysis allowed; if a manufacturer or distributor knows of the presence of a chemical that is subject to the regulations, it must provide a warning. Furthermore, Prop. 65 allows for private parties or 'bounty hunters' to file claims against supposed non-compliers, seeking penalties of up to $2500 per day per violation, as well as the payment of attorneys fees.

Responsibility to Comply

Prop. 65 is applicable to pharmaceutical manufacturers. See Cal. Health and Safety Code ' 25249.6. They, likewise, are required to provide a 'clear and reasonable warning' unless they are somehow otherwise exempted from Prop. 65. The California Health and Welfare Agency (CHWA), the agency initially designated to administer Prop. 65, adopted an implementing regulation (the Regulation) stating: 'for prescription drugs, the labeling approved or otherwise provided under federal law and the prescriber's accepted practice of obtaining a patient's informed consent shall be deemed a clear and reasonable warning.' Cal. Code Reg. tit. 22, Section 12601(b)(2.

Because there is an existing comprehensive federal regulatory scheme concerning warnings on drugs promulgated by the FDA, the conflict for drug manufacturers is obvious: FDA regulations require a detailed review and approval process for the information provided in package inserts and on labeling for prescription drugs. The FDA regulations require similar information, particularly relating to safety, on any advertising for prescription drugs. Further, once the FDA approves a label, no changes may be made without its prior approval. Any unapproved changes to the label may render the product 'misbranded' under federal law and subject the manufacturer to substantial fines and penalties. See Cantor v. Warner Lambert Company , 99 Cal.App. 4th 780 (2002).

The OTC Context

Prop. 65 complaints have been filed both by the California Attorney General's Office as well as by private attorneys general in numerous cases involving over-the-counter drugs and other medical products. For example, manufacturers of dental amalgam have fought a long, losing battle with the State of California concerning information provided to dental patients as to the presence of mercury in dental amalgam.

Recently, a private attorney general initiated action against a manufacturer of an OTC nicotine patch for the cessation of smoking. In Dowhal v. SmithKline Beecham Consumer Healthcare, Cal.App.4th 8 (2002), the Court of Appeals overturning the trial court's entry of summary judgment on behalf of the defendants, determined that the Modernization Act of 1997 had a savings clause which explicitly provided that Prop. 65 and federal law were not in direct conflict. This decision has recently been depublished, as the California Supreme Court has granted review. Dowhal v. SmithKline Beecham Consumer Healthcare, No. S109306, (2002 WL 1486578) (October 23, 2002).

Not only is Smith Kline Beecham challenging the Dowhal court's decision, but the FDA likewise is challenging it, arguing that it specifically rejected the proposed Prop. 65 warning as scientifically unreliable and one that might dissuade pregnant women from trying to stop smoking, a result that would not be in the interest of good public health. The FDA argues that it carefully considers the warnings that it requires on products and, based on its expertise, has mandated the precise warning language that it concludes provides all material information relating to safety. The FDA has stressed that strict compliance with Prop. 65 may result in a narrow focus that disregards entirely the product's significance in reducing known health risks, which the FDA takes into consideration when approving warnings and labeling.

Prescription Drugs

The rules to be applied to prescription drugs are more precise than for OTC products. Not only do the enabling regulations to Prop. 65 provide a 'safe harbor,' but recent trial court decisions have determined that to the extent Regulation 12601(b)(2) does not provide for an absolute safe harbor, the imposition of Prop. 65 liability for prescription drugs is preempted by federal law.

In State of California v. Alpharma USPD Inc., Case No. 992915, the San Francisco Superior Court granted summary judgment on behalf of Alpharma against a claim by the Attorney General that Alpharma violated Prop. 65 in the labeling for its Lindane shampoo and lotion. The Attorney General sued defendant Alpharma, claiming that there were chemicals in Lindane shampoo that were 'known to the people of the State of California to cause cancer.' Alpharma moved for summary judgment on the grounds that its Lindane products contained a label approved by the FDA. The trial court agreed with Alpharma, finding that its only obligations under Prop. 65 were satisfied by the FDA-approved label, together with the 'prescriber's accepted practice of obtaining a patient's informed consent.' The court did not reach the issue of implied or express preemption.

A very recent California trial court decision, however, specifically determined that Prop. 65, to the extent that it requires additional information other than the FDA-approved label and package insert, is pre-empted. In The Vaccine Cases, JCCP No. 4246 (Los Angeles Superior Court), plaintiffs made claims, inter alia, for violation of Prop. 65. Plaintiffs claimed that they themselves or their children were poisoned with thimerosal-containing vaccines, causing personal injury and violating Prop. 65. They claimed that thimerosal contains mercury, one of the listed chemicals on the Governor's List, and that therefore there was a requirement that users be warned of reproductive toxicity. However, the defendants successfully challenged the plaintiffs' claim. Sustaining a demurrer without leave to amend on the Prop. 65 claim (Master Complaint No. 3), Judge Victoria G. Chaney determined that the manufacturers of thimerosal and thimerosal-containing vaccines were entitled to judgment in their favor on that issue. The court determined that Regulation 12601(b)(2) provided an absolute safe harbor for the manufacturers and distributors of thimersosal-containing vaccines, and thimerosal manufacturers. Further, the court determined that any imposition of Prop. 65 liability in the context of prescription drugs would substantially interfere with and impede the FDA's responsibilities to ensure that safe and efficacious drugs are available to the consuming public. Judge Chaney held that the FDA requirements govern all product information materials relating to prescription drugs, including advertising, brochures and postings, whether physically attached to the product or not. Plaintiffs have recently filed a notice of appeal.

Conclusion

Clearly, Prop. 65 is a trap for the unwary. Substantial penalties and attorneys fees can be collected either by the state Attorney General or by a private litigant acting as a private attorney general under the public benefit portion of Prop. 65. However, recent trends seem to indicate a retrenchment from strict compliance with Prop. 65, especially in the pharmaceutical context. The California Supreme Court's acceptance of Dowhal, and recent trial court decisions in Alpharma and The Vaccine Cases, indicate that state judges are more likely to view Prop. 65 as impeding the FDA's regulatory provisions, and thus pre-empted by federal law.

Frederick J. Ufkes is a partner at the Los Angeles Office of Kirkpatrick & Lockhart, LLP, and has regional and national counsel experience in product liability litigation. His experience includes serving as trial counsel in numerous toxic tort cases representing Fortune 500 companies. Ufkes litigates a wide range of issues affecting the chemical and pharmaceutical industry, including defending claims of violations of Proposition 65. He would like to thank Nicole Lee, an Associate at Kirkpatrick & Lockhart, LLP for her assistance in the preparation of this article.