Suits Against Generic Pharm Manufacturers

Among the landmark decisions issued by the U.S. Supreme Court in the final weeks of its last session, one that affects the nation's consumers of generic drugs got less attention than it might have deserved. In Mutual Pharmaceutical Co. Inc. v. Bartlett, 2013 U.S. LEXIS 4702 (U.S. 6/24/13), the court overturned the award of millions of dollars in damages to a woman injured by the use of a generic version of a patented, FDA-approved drug, after finding that the manufacturer could not be held responsible through a state-law claim for defective design, because it was actually a failure-to-warn claim in disguise.

Failure-to-warn claims against generic drug manufacturers, which by federal law are required to use the same warning labels used by manufacturers of their products' brand-name equivalents, have been precluded by the Supreme Court's 2011 decision in PLIVA Inc. v. Mensing, 131 S. Ct. 2567 (2011).

Catastrophic Reaction To Common NSAID

The plaintiff in Bartlett went to her doctor complaining of shoulder pain in 2004 and was prescribed Clinoril, the brand-name version of the nonsteroidal anti-inflammatory drug (NSAID) sulindac. However, she purchased from her pharmacist' a generic form of sulindac manufactured by Mutual Pharmaceutical. It caused her to develop' an acute case of toxic epidermal necrolysis, which has left her blind, disfigured and with other physical disabilities. A year later, sulindac's label was changed, per the Food and Drug Administration's (FDA's) recommendation, to include a warning of the risk of developing' toxic epidermal necrolysis with its use.

The plaintiff brought suit against Mutual Pharmaceutical and was awarded $21 million, despite Mutual's protestation that its hands were tied by federal law that prevented it from changing the labeling. On appeal, the U.S. Court of Appeals for the First Circuit upheld the award, concluding that Pliva did not apply, as this was a design-defect case and not a failure-to-warn case, and that Mutual could have avoided the problem of state/federal law conflict by choosing not to market its generic version of Clinoril at all.

Supreme Court Sees Failure-to-Warn Claim Within Design-Defect Claim

The Supreme Court observed that under New Hampshire state law, a product is dangerous if its risk outweighs its utility. New Hampshire's Supreme Court explained that balance in Vatour v. Body Masters Sports Industries Inc., 147 N.H. 150: Courts must assess “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.”

Thus, the Supreme Court found, New Hampshire law would require Mutual to improve sulindac's usefulness or reduce its risks by changing its formulation (which, as a generic manufacturer, it is not permitted to do without foregoing the “generic route” and instead submitting its product to the full new-drug FDA approval process). Or it could conform to the law by changing its product label to add warnings not approved by the FDA for Clinoril's label (which federal law also prohibited Mutual from doing). “When federal law forbids an action that state law requires, the state law is 'without effect',” the Court stated, citing Maryland v. Louisiana, 451 U.S. 725, 726 (1981). “Because it is impossible for Mutual and other similarly situated manufacturers to comply with both state and federal law, New Hampshire's warning-based design-defect cause of action is pre-empted with respect to FDA-approved drugs sold in interstate commerce.”

The Consequences

Justice Sonya Sottomayor, in a dissenting opinion, pointed out that the “impossibility defense” embraced by the majority was faulty, in that Mutual and other generic drug manufacturers are not required by New Hampshire's (or similar states') laws to break federal law in order to comply with state law. They may choose instead to forgo doing business in New Hampshire, or they may pay damages to their injured New Hampshire consumers as a cost of doing business there.

Conclusion

What the Mutual Pharmaceutical decision does is to effectively immunize pharmaceutical generics manufacturers from state tort liability when they use FDA-approved labels for their products deemed equivalent to brand-name FDA-approved drugs. States may not impose additional safety requirements, and may not make it possible for their citizens to receive compensation when they are injured. This is a boon to drug manufacturers, but leaves consumers in a dangerous position.

As stated by Justice Ruth Bader Ginsberg in her dissenting opinion, “If manufacturers of products that require preapproval are given de facto immunity from design-defect liability, then the public will have to rely exclusively on imperfect federal agencies with limited resources and sometimes limited legal authority to recall approved products. And consumers injured by those products will have no recourse.”

Janice G. Inman is Editor-in-Chief of this newsletter.

Among the landmark decisions issued by the U.S. Supreme Court in the final weeks of its last session, one that affects the nation's consumers of generic drugs got less attention than it might have deserved. In Mutual Pharmaceutical Co. Inc. v. Bartlett, 2013 U.S. LEXIS 4702 (U.S. 6/24/13), the court overturned the award of millions of dollars in damages to a woman injured by the use of a generic version of a patented, FDA-approved drug, after finding that the manufacturer could not be held responsible through a state-law claim for defective design, because it was actually a failure-to-warn claim in disguise.

Failure-to-warn claims against generic drug manufacturers, which by federal law are required to use the same warning labels used by manufacturers of their products' brand-name equivalents, have been precluded by the Supreme Court's 2011 decision in PLIVA Inc. v. Mensing , 131 S. Ct. 2567 (2011).

Catastrophic Reaction To Common NSAID

The plaintiff in Bartlett went to her doctor complaining of shoulder pain in 2004 and was prescribed Clinoril, the brand-name version of the nonsteroidal anti-inflammatory drug (NSAID) sulindac. However, she purchased from her pharmacist' a generic form of sulindac manufactured by Mutual Pharmaceutical. It caused her to develop' an acute case of toxic epidermal necrolysis, which has left her blind, disfigured and with other physical disabilities. A year later, sulindac's label was changed, per the Food and Drug Administration's (FDA's) recommendation, to include a warning of the risk of developing' toxic epidermal necrolysis with its use.

The plaintiff brought suit against Mutual Pharmaceutical and was awarded $21 million, despite Mutual's protestation that its hands were tied by federal law that prevented it from changing the labeling. On appeal, the U.S. Court of Appeals for the First Circuit upheld the award, concluding that Pliva did not apply, as this was a design-defect case and not a failure-to-warn case, and that Mutual could have avoided the problem of state/federal law conflict by choosing not to market its generic version of Clinoril at all.

Supreme Court Sees Failure-to-Warn Claim Within Design-Defect Claim

The Supreme Court observed that under New Hampshire state law, a product is dangerous if its risk outweighs its utility. New Hampshire's Supreme Court explained that balance in Vatour v. Body Masters Sports Industries Inc. , 147 N.H. 150: Courts must assess “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.”

Thus, the Supreme Court found, New Hampshire law would require Mutual to improve sulindac's usefulness or reduce its risks by changing its formulation (which, as a generic manufacturer, it is not permitted to do without foregoing the “generic route” and instead submitting its product to the full new-drug FDA approval process). Or it could conform to the law by changing its product label to add warnings not approved by the FDA for Clinoril's label (which federal law also prohibited Mutual from doing). “When federal law forbids an action that state law requires, the state law is 'without effect',” the Court stated, citing Maryland v. Louisiana , 451 U.S. 725, 726 (1981). “Because it is impossible for Mutual and other similarly situated manufacturers to comply with both state and federal law, New Hampshire's warning-based design-defect cause of action is pre-empted with respect to FDA-approved drugs sold in interstate commerce.”

The Consequences

Justice Sonya Sottomayor, in a dissenting opinion, pointed out that the “impossibility defense” embraced by the majority was faulty, in that Mutual and other generic drug manufacturers are not required by New Hampshire's (or similar states') laws to break federal law in order to comply with state law. They may choose instead to forgo doing business in New Hampshire, or they may pay damages to their injured New Hampshire consumers as a cost of doing business there.

Conclusion

What the Mutual Pharmaceutical decision does is to effectively immunize pharmaceutical generics manufacturers from state tort liability when they use FDA-approved labels for their products deemed equivalent to brand-name FDA-approved drugs. States may not impose additional safety requirements, and may not make it possible for their citizens to receive compensation when they are injured. This is a boon to drug manufacturers, but leaves consumers in a dangerous position.

As stated by Justice Ruth Bader Ginsberg in her dissenting opinion, “If manufacturers of products that require preapproval are given de facto immunity from design-defect liability, then the public will have to rely exclusively on imperfect federal agencies with limited resources and sometimes limited legal authority to recall approved products. And consumers injured by those products will have no recourse.”

Janice G. Inman is Editor-in-Chief of this newsletter.