In just two months, the U.S. Supreme Court is expected to decide a thorny and contentious case concerning generic drug labeling and liability that will determine if generic drugmakers can be sued for alleged flaws in the design of their medications. At issue is whether federal law preempts such claims from proceeding in state courts.

The case has galvanized the entire pharmaceutical industry, both generic and innovative, and even drawn in the White House over concerns that the entire FDA regulatory review process could be undermined if medicines that are deemed to be safe and effective by the agency could later be considered “unreasonably dangerous” by state court juries.

The background to this tempest reads like any product liability lawsuit. It began with a New Hampshire woman named Karen Bartlett. In 2004, she was prescribed sulindac, a generic non-steroidal anti-inflammatory (NSAID) made by Mutual Pharmaceuticals, for shoulder pain. A few months later, she developed Stevens-Johnson Syndrome and toxic epidermal necrolysis.

She suffered burn-like lesions on 65% of her body due to a hypersensitivity reaction and spent 70 days in a hospital, including 50 days in a burn unit, while surviving two septic shock episodes and 12 major eye surgeries. Today, she is nearly blind, unable to read, drive or work, and must use a feeding tube, according to her lawsuit.

Ms. Bartlett subsequently sued Mutual for alleged design defects under New Hampshire state law and was awarded $21 million. Last May, a federal appeals court upheld the award. Mutual, however, continues to argue that federal law preempts this type of claim, because the FDA had already approved sulindac and federal law requires a generic drug to have the same design as the brand-name medication.

To bolster its case, Mutual has been pointing to a Supreme Court ruling in June 2011 that found generic drugmakers are not required to strengthen product labeling if alerted to side effects, when the same change has not been made to the labeling for the branded medicine. This case was known as Pliva vs. Mensing and has since created its own special uproar.

In that case, two women argued that generic drugmakers would create uncertainty about the safety of their medicines if they are not held liable under state laws and update labeling in the face of evidence of serious side effects. They also maintained that generic drugmakers could make such labeling changes without waiting for FDA approval. 

In writing the 5-to-4 majority opinion, Supreme Court Justice Clarence Thomas rejected their argument as impossible for the generic drugmakers. “Where state and federal law directly conflict, state law must give way,” he wrote. “Such a conflict exists where it is ‘impossible for a private party to comply with both state and federal requirements.’ The court finds impossibility here.”

In the dissent, Justice Sonia Sotomayor countered that a generic drugmaker could easily propose a change to the FDA, which could then require brand-name drugmakers to make labeling changes, if warranted. In this way, regulators have an opportunity to make appropriate use of safety evidence and generic drugmakers have fulfilled their burdens. But her opinion was in the minority.

In upholding Ms. Bartlett’s award, the appeals court noted that Mutual could have simply chosen to withdraw its medicine. In that way, the drugmaker could have complied with state law and avoided the dilemma of also trying to comply with federal law. Of course, such voluntary withdrawals are rare, to say the least. Such a move means a loss of revenue and may invite litigation, anyway.

Ms. Bartlett, however, took a different tack. She has been arguing that the FDA should never have approved sulindac in the first place and claimed the medicine was inherently dangerous based on the number of incident reports of severe skin reactions that were filed with the agency. On that basis, she maintains that the design of the drug was “unreasonably dangerous” and defective.

This is also a clever (albeit obvious) way to skirt the Pliva vs. Mensing decision. In a brief supporting Mutual, for instance, the Generic Pharmaceutical Association (GPHA) trade group argued that the appeals court ruling, which effectively endorsed Ms. Bartlett’s argument, “reopens avenues of liability” that the Supreme Court closed with its decision in Pliva vs. Mensing.

And in a subsequent statement, GPHA president Ralph Neas added, “Judgments of safety and efficacy of prescription drugs should rest with the scientific experts at the FDA. This case, if decided incorrectly, threatens to undermine the authority of the FDA, which is the only body that has the scientific knowledge, regulatory experience, and complete data to make these decisions.”

In effect, the entire pharma industry is arguing that another ruling in favor of Ms. Bartlett would rob the FDA of its regulatory authority — and hand a big victory to the attorneys who make a living filing tort lawsuits against drugmakers. If the Supreme Court upholds the award, drugmakers worry they will encounter still more litigation over labeling and side effects.

The White House is similarly concerned. In a brief filed earlier this year in support of Mutual, the US Solicitor General took the unusual position of arguing for preemption. The brief stated:

“Congress has required federal drug safety decisions to be made by an expert federal agency with access to the pertinent safety data on the basis of sound scientific judgments, and FDA’s risk-benefit analysis is rigorous. [. . . ] Congress has also charged FDA with ongoing drug-safety monitoring and requires FDA to withdraw its approval of a drug if it determines that the drug is not safe for the conditions of use in its approved labeling. A state that permitted a pure design-defect claim, however, would require a jury independently to balance the health risks and benefits for an FDA-approved drug to determine if the drug is ‘unreasonably dangerous.’

“Congress’ purpose of ensuring that expert, science-based judgments are made by FDA, and the assurance that FDA approval provides for market participants, would be undermined by ad-hoc reconsiderations on a state-by-state and lawsuit-by-lawsuit basis.”

The Solicitor General issued its final warning, writing, “Tort judgments second-guessing FDA’s expert drug-safety determination would undermine the federal regime to the extent that they forbade or significantly restricted the marketing of an FDA-approved drug.” As we can see, the Solicitor General did not make a distinction between generic and branded medicines. The entire regime would be open to second-guessing, the administration warned.

Not everyone foresees a doomsday scenario, though. Kate Greenwood, a research fellow and lecturer in law at Seton Hall Law School Center for Health & Pharmaceutical Law & Policy, who used to defend drugmakers, believes the Supreme Court will reverse the appeals court decision, which will mean that the design-defect claim will be even harder to pursue going forward.

But even if the Bartlett award was upheld, she points out that the appeals court noted that many state courts refuse to review claims that FDA-approved drugs are defectively designed. “Even where such claims are permitted, manufacturers can defend against them by showing that a drug  ‘was unavoidably unsafe but was highly useful and had an adequate safety warning,’” she opined.

This entire debate would not be necessary, though, if the FDA were to change its regulations to require generic drugmakers to seek to upgrade their product labeling when they become aware of evidence of serious side effects. Consumer advocates have been urging ever since the Pliva vs. Mensing ruling was issued.

In fact, the FDA is working on such a change now, according to a tiny mention in a recent court filing by the U.S. Department of Justice. Of course, it remains unclear if the FDA will complete this effort, how long it will take and what the language will say. But this is probably the best way to handle what is a complicated situation that protects manufacturers at the expense of patients.

Generic drugmakers have every right to turn to the law for protection. But the problem right now is that consumers have no recourse, no matter how many adverse events occur or the extent to which drugmakers become aware of them. This is an inherently unfair scenario and if existing law cannot accommodate the public, then new regulations are required. 

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Ed Silverman is a prize-winning journalist who has covered the pharmaceutical industry for The Star-Ledger of New Jersey, one of the nation’s largest daily newspapers, for more than 12 years. Prior to joining The Star-Ledger, Ed spent six years at New York Newsday and previously worked at Investor’s Business Daily. Ed blogs about the drug industry at Pharmalot. He can be reached at [email protected].