Case Notes

First Circuit Affirms Judgment Against Generic Drug Manufacturer on Plaintiff's Design Defect Claim

In Bartlett v. Mutual Pharmaceutical Company, Inc., 678 F.3d 30 (1st Cir. May 2, 2012), the plaintiff suffered toxic epidermal necrolysis (TEN) after taking sulindac, a generic version of the non-steroidal anti-inflammatory drug Clinoril'. The plaintiff sued the drug's manufacturer in New Hampshire state court for breach of warranty, negligence and fraud, based on the drug's allegedly defective manufacture and design and the manufacturer's alleged failure to warn of the drug's dangers. After the defendant removed the case to the United States District Court for the District of New Hampshire, the federal district court dismissed all but the design defect claim, which proceeded to trial. At trial, the plaintiff argued that sulindac's risks outweighed its benefits, thus making it unreasonably dangerous to consumers, notwithstanding the U.S. Food and Drug Administration (FDA)'s having approved the brand-name drug to which sulindac was identical as “safe and effective” and never having withdrawn that approval. The jury found for the plaintiff, awarding over $21 million, and the district court denied the defendant's motion for judgment as a matter of law.

On appeal to the United States Court of Appeals for the First Circuit, the defendant contended that the plaintiff's claim failed as a matter of law because the plaintiff was required to prove a specific “defect” in addition to the drug's unreasonable dangerousness, and no proof of any identifiable defect in sulindac was shown. The defendant also argued the claim was preempted by the federal Food, Drug, and Cosmetic Act (FDCA) because sulindac's design was required by the act to be the “same” as the branded drug's, and that the testimony of the plaintiff's experts based on “adverse event reports” (AERs) to the FDA should have been excluded under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), which requires the proponent of expert testimony to demonstrate that it is reliable based on such factors as objective testing, peer-reviewed publication and the like.

With respect to the requirements for a design defect claim, the First Circuit characterized the defendant as arguing that New Hampshire law required proof of a feasible alternative design to establish such a claim, and held that New Hampshire precedent had already rejected that argument. The defendant's actual argument, however, had been that New Hampshire law, which follows the Restatement (Second) of Torts ' 402A (1965), requires that a design defect plaintiff prove that the product was in a “defective condition,” as well as being “unreasonably dangerous.” Ignoring these conjunctive requirements, the First Circuit held that the district court properly allowed the plaintiff to show that sulindac was in a “defective condition” solely by virtue of its being “unreasonably dangerous” due to its propensity to cause TEN.

On preemption, the court recognized that the Hatch-Waxman amendments to the FDCA ' which permit the marketing of generic drugs that are chemically identical to a previously approved branded drug and carry the same labeling ' were intended to make safe and effective drugs available more cheaply and thus lower health care costs. The court also recognized the Supreme Court's holding in PLIVA v. Mensing, 131 S. Ct. 2567 (2011), that a failure-to-warn claim against a generic manufacturer was impliedly preempted because the generic manufacturer was not free under the FDCA to change the warnings to vary from those of the branded manufacturer, as the plaintiff's claim would require. Nonetheless, the court held that a design defect claim was not preempted because, even though the generic manufacturer could not change the drug's design to vary from that of the branded manufacturer, the manufacturer could decide not to sell the drug at all. The court did not ponder how that squared with the Hatch-Waxman amendments' cost-lowering purposes, which the court had recognized, or how it was logical that a jury could not require a generic drug manufacturer to tweak its labeling but could require the manufacturer to discontinue sale of the drug altogether. The court did note that the preemption question was one of “exceptional importance that the Supreme Court has yet to decide,” and that “[g]iven the widespread use of generic drugs and the developing split in the lower courts, ' this issue needs a decisive answer from the only court that can supply it.”

Finally, the defendant argued that the plaintiff's experts' opinions were inadmissible, primarily because they relied on unreliable AERs as evidence of sulindac's causation of TEN and/or the incidence rate of that adverse effect. While the court acknowledged that many courts do not permit the use of AERs for such purposes, the court noted that both defendant's own expert and the FDA itself had written reports that made some use of AER data. Thus the existence of a significant number of AERs was admissible as “part of the calculus” for an expert who was opining on the risk-benefit ratio of a drug.

Following its decision, the First Circuit issued a stay of its mandate, at defendant's request, to permit the defendant to seek review of the decision by the United States Supreme Court. Mutual filed a petition for a writ of certiorari which presents the following question for the Supreme Court:

Whether the First Circuit erred when it created a circuit split and held ' in clear conflict with this Court's decisions in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011); Riegel v. Medtronic, Inc., 552 U.S. 312 (2008); and Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) ' that federal law does not preempt state law design-defect claims targeting generic pharmaceutical products because the conceded conflict between such claims and the federal laws governing generic pharmaceutical design allegedly can be avoided if the makers of generic pharmaceuticals simply stop making their products.

' David R. Geiger, Foley Hoag

First Circuit Affirms Judgment Against Generic Drug Manufacturer on Plaintiff's Design Defect Claim

In Bartlett v. Mutual Pharmaceutical Company, Inc. , 678 F.3d 30 (1st Cir. May 2, 2012), the plaintiff suffered toxic epidermal necrolysis (TEN) after taking sulindac, a generic version of the non-steroidal anti-inflammatory drug Clinoril'. The plaintiff sued the drug's manufacturer in New Hampshire state court for breach of warranty, negligence and fraud, based on the drug's allegedly defective manufacture and design and the manufacturer's alleged failure to warn of the drug's dangers. After the defendant removed the case to the United States District Court for the District of New Hampshire, the federal district court dismissed all but the design defect claim, which proceeded to trial. At trial, the plaintiff argued that sulindac's risks outweighed its benefits, thus making it unreasonably dangerous to consumers, notwithstanding the U.S. Food and Drug Administration (FDA)'s having approved the brand-name drug to which sulindac was identical as “safe and effective” and never having withdrawn that approval. The jury found for the plaintiff, awarding over $21 million, and the district court denied the defendant's motion for judgment as a matter of law.

On appeal to the United States Court of Appeals for the First Circuit, the defendant contended that the plaintiff's claim failed as a matter of law because the plaintiff was required to prove a specific “defect” in addition to the drug's unreasonable dangerousness, and no proof of any identifiable defect in sulindac was shown. The defendant also argued the claim was preempted by the federal Food, Drug, and Cosmetic Act (FDCA) because sulindac's design was required by the act to be the “same” as the branded drug's, and that the testimony of the plaintiff's experts based on “adverse event reports” (AERs) to the FDA should have been excluded under Daubert v. Merrell Dow Pharmaceuticals , 509 U.S. 579 (1993), which requires the proponent of expert testimony to demonstrate that it is reliable based on such factors as objective testing, peer-reviewed publication and the like.

With respect to the requirements for a design defect claim, the First Circuit characterized the defendant as arguing that New Hampshire law required proof of a feasible alternative design to establish such a claim, and held that New Hampshire precedent had already rejected that argument. The defendant's actual argument, however, had been that New Hampshire law, which follows the Restatement (Second) of Torts ' 402A (1965), requires that a design defect plaintiff prove that the product was in a “defective condition,” as well as being “unreasonably dangerous.” Ignoring these conjunctive requirements, the First Circuit held that the district court properly allowed the plaintiff to show that sulindac was in a “defective condition” solely by virtue of its being “unreasonably dangerous” due to its propensity to cause TEN.

On preemption, the court recognized that the Hatch-Waxman amendments to the FDCA ' which permit the marketing of generic drugs that are chemically identical to a previously approved branded drug and carry the same labeling ' were intended to make safe and effective drugs available more cheaply and thus lower health care costs. The court also recognized the Supreme Court's holding in PLIVA v. Mensing , 131 S. Ct. 2567 (2011), that a failure-to-warn claim against a generic manufacturer was impliedly preempted because the generic manufacturer was not free under the FDCA to change the warnings to vary from those of the branded manufacturer, as the plaintiff's claim would require. Nonetheless, the court held that a design defect claim was not preempted because, even though the generic manufacturer could not change the drug's design to vary from that of the branded manufacturer, the manufacturer could decide not to sell the drug at all. The court did not ponder how that squared with the Hatch-Waxman amendments' cost-lowering purposes, which the court had recognized, or how it was logical that a jury could not require a generic drug manufacturer to tweak its labeling but could require the manufacturer to discontinue sale of the drug altogether. The court did note that the preemption question was one of “exceptional importance that the Supreme Court has yet to decide,” and that “[g]iven the widespread use of generic drugs and the developing split in the lower courts, ' this issue needs a decisive answer from the only court that can supply it.”

Finally, the defendant argued that the plaintiff's experts' opinions were inadmissible, primarily because they relied on unreliable AERs as evidence of sulindac's causation of TEN and/or the incidence rate of that adverse effect. While the court acknowledged that many courts do not permit the use of AERs for such purposes, the court noted that both defendant's own expert and the FDA itself had written reports that made some use of AER data. Thus the existence of a significant number of AERs was admissible as “part of the calculus” for an expert who was opining on the risk-benefit ratio of a drug.

Following its decision, the First Circuit issued a stay of its mandate, at defendant's request, to permit the defendant to seek review of the decision by the United States Supreme Court. Mutual filed a petition for a writ of certiorari which presents the following question for the Supreme Court:

Whether the First Circuit erred when it created a circuit split and held ' in clear conflict with this Court's decisions in PLIVA, Inc. v. Mensing , 131 S. Ct. 2567 (2011); Riegel v. Medtronic, Inc. , 552 U.S. 312 (2008); and Cipollone v. Liggett Group, Inc. , 505 U.S. 504 (1992) ' that federal law does not preempt state law design-defect claims targeting generic pharmaceutical products because the conceded conflict between such claims and the federal laws governing generic pharmaceutical design allegedly can be avoided if the makers of generic pharmaceuticals simply stop making their products.

' David R. Geiger, Foley Hoag