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Thursday, June 23, 2011

Corporate Court Protects Drug Manufacturers That Fail to Warn Consumers of Health Risks

Today the Supreme Court’s conservative majority held in PLIVA v. Mensing that a generic-drug manufacturer cannot be held liable in state court for failing to inform the FDA that its label inadequately warns consumers of health risks. Generic drugs currently make up 75 percent of the prescription drug market.

Gladys Mensing sued PLIVA for failure to warn and misrepresentation in state court after a generic drug that PLIVA manufactured caused her to develop a severe and irreversible neurological movement disorder. Mensing claimed that PLIVA failed to take steps to change the label warnings despite mounting evidence that the drug carried a far greater risk of the disorder than initially indicated.

PLIVA argued that the Hatch-Waxman Amendments, the governing federal law, impliedly preempts Mensing's state claims. PLIVA claimed that simultaneous adherence to state and federal law is impossible because federal law requires generic labels to be identical to labels approved for the name brand. As a result, PLIVA stated that unilaterally strengthening the warning on the generic label to avoid state law liability would violate federal law requiring identical labels.

Mensing responded that state law claims against a generic drug manufacturer should not be preempted because the manufacturer could have proposed a label change for FDA to approve without making a unilateral change. In addition, Mensing argued, the Hatch-Waxman Amendments must be read with other FDA statutes that are meant to ensure that drugs are safe for consumer use.

The Court sided with PLIVA and held that a generic drug manufacturer may escape state tort liability even if the manufacturer refused to contact the FDA about newly discovered health risks. The opinion stated that, because the FDA must first approve a change to a label, the manufacturers “cannot independently satisfy those state duties for preemption purposes” while adhering to federal law. As a result, the Court stated, the Supremacy Clause requires that the Hatch-Waxman Amendments preempt victims of inadequate generic-drug warning labels from seeking compensation for injuries in state court. The Court previously held in Wyeth v. Levine (2009) that lawsuits against manufacturers of brand-name drugs for inadequate warnings were not preempted by federal law and could go forward. The Court held in Wyeth that FDA regulations allowed brand-name drug manufacturers to make unilateral changes to their labels to strengthen safety warnings and satisfy their state tort law duties.

Justice Sotomayor’s dissent stated that the Court “invents new principles of pre-emption law out of thin air to justify its dilution of the impossibility standard.” The dissent also called the majority’s new theory of the Supremacy Clause a “direct assault” on precedent stating that a federal preemption defense requires a “strong showing of a conflict to overcome the presumption that state and local regulation can constitutionally coexist with federal regulation.” The dissent reiterated that generic manufacturers have a duty under federal law to monitor the safety of their products and a mechanism for proposing a label change when such a change is necessary. A generic manufacturer, Justice Sotomayor wrote, should “usually be unable to sustain their burden of showing impossibility if they have not even attempted to employ that mechanism.”

The dissent also identified three “absurd consequences” that will result from the Court’s decision. First, generic drug consumers will have no access to compensation when they are injured by inadequate warnings. This creates an “arbitrary distinction” between brand-name and generic-drug consumers that Congress did not intend to create. As a result of this decision and the 2009 Wyeth decision, the majority concedes that a consumer’s ability to seek compensation for injuries depends on whether a pharmacist fills a prescription with the brand-name or generic version of a drug. Many states allow pharmacists to unilaterally make such substitutions. Second, generic-drug manufacturers will no longer have the same state-law incentives to monitor and disclose safety risks that brand-name manufacturers have. As the dissent observed, “brand-name manufacturers often leave the market once generic versions are available, meaning that there will be no manufacturers subject to failure-to-warn liability.” Third, the decision undercuts the goals of the Hatch-Waxman Amendments to increase the consumption of less expensive generic drugs. Doctors will be more hesitant to prescribe generic drugs and patients will be less likely to take them because generic-drug manufacturers will now face weaker safety incentives.

As a result of this decision, individuals harmed by inadequate warnings on generic-drug labels will be unable to seek compensation for their injuries in state court even if the manufacturer fails to abide by its legal obligation to inform the FDA of newly discovered health risks.

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