Generic Firms Get Supreme Shield From Product Liability, But Court Hints At Reg Change

In Pliva v. Mensing, the high court said it was impossible for generic manufacturers to comply with both state tort laws and FDA regulations requiring them to have the same labels as those for brand name counterparts.

In a decision that could free generic manufacturers from failure-to-warn claims in product liability litigation, the Supreme Court ruled 5-4 that they cannot be held liable under state tort laws for inadequate label warnings.

In its June 23 opinion in Pliva Inc. v. Mensing, the court said that FDA regulations requiring generic drugs to have the same labels as corresponding brand name drug labels preempts claims the manufacturer violated state laws requiring them to adequately and safely label their products.

In three consolidated cases before the court respondents Gladys Mensing and Julie Demahy claimed that generic manufacturers of Wyeth's heartburn drug Reglan (metoclopramide) did not adequately warn that long-term use of the drug could cause tardive dyskinesia. They argued that even though generic manufacturers must have the same label as their brand counterparts they could have taken steps to have FDA change the label.

An Impossible "Mouse Trap" Game

The court said it was impossible for the generic manufacturers to comply with both federal and state law. "It was not lawful under federal law for the manufacturers to do what state law required of them," Justice Clarence Thomas wrote in the opinion for the court. "And even if they had fulfilled their federal duty to ask for FDA assistance, they would not have satisfied the requirements of state law."

Thomas said that manufacturers acknowledged they could have asked the FDA for help. "If they had done so, and if the FDA decided there was sufficient supporting information, and if the FDA undertook negotiations with the brand-name manufacturer, and if adequate label changes were decided on and implemented, then the manufacturers would have started a Mouse Trap game that eventually led to a better label on generic metoclopramide."

The court also pointed out that Congress and FDA "retain the authority to change the law and regulations if they so desire."

The Solicitor General had advised the court not to take up the cases. But it argued that federal law does not categorically preempt failure-to-warn claims because a generic manufacturer, like a brand-name manufacturer, must inform FDA of new information about risks that may require a label change (Also see "Generic Industry Faces Uphill Battle In Preemption Case Before Supreme Court" - Pink Sheet, 28 Mar, 2011.).

The decision overturns rulings of the U.S. Court of Appeals for the Fifth and Eight Circuits which found the suits could proceed against the generic manufacturers. The companies included Actavis Elizabeth LLC, Actavis Inc., Teva Pharmaceuticals USA Inc. and UDL Laboratories Inc.

Court Distinguishes Case From Wyeth v. Levine

The court made a distinction between the current case and its 2009 ruling in Wyeth v. Levine, in which the court found FDA-approved labeling does not preempt failure-to-warn claims under state law. Thomas said federal regulations applicable to Wyeth allowed the company, of its own volition, to strengthen its label in compliance with state tort law. But he acknowledged that this distinction puts users of generic drugs at a disadvantage.

"We recognize that from the perspective of Mensing and Demahy, finding preemption here but not in Wyeth makes little sense," Thomas wrote. "Had Mensing and Demahy taken Reglan, the brand-name drug prescribed by their doctors, Wyeth would control and their lawsuits would not be preempted."

In a dissent, Justice Sonia Sotomayor, joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan, stated that the court "invents new principles of preemption out of thin air" and "effectively rewrites" the court's decision in Wyeth v. Levine.

"As a result of today's decision, whether a consumer harmed by inadequate warnings can obtain relief turns solely on the happenstance of whether her pharmacist filled her prescription with a brand-name or generic drug," she wrote. "The court gets one thing right: This outcome 'makes little sense.'"

During oral arguments the court indicated there was disagreement on the issue, as many justices suggested generic companies have an obligation to ask FDA to revise labeling (Also see "Generic Liability: Supreme Court Appears Divided On Whether ANDA Sponsors Must Seek Label Change When New Risks Emerge" - Pink Sheet, 30 Mar, 2011.).

The court remanded the cases back to state district court to consider in light of its opinion.

The generic industry applauded the ruling.

"This is a decision that accurately reflects the difficulties generic manufacturers faced in trying to comply with federal and state laws," said Actavis VP and chief legal officer John LaRocca. "It is impossible to comply with both regulatory schemes."

Some 1,000 Cases May Now Be Dismissed

Louis Bogard, who argued in the Supreme Court on behalf of Mensing, said in a press conference call that the decision makes an untenable distinction in the law between brand-name and generic drugs.

"The plaintiff who takes a brand-name product retains a right to sue but 75% of plaintiffs who take generic drugs would appear to be left without any remedy," Bogard, senior litigation counsel at the Center for Constitutional Litigation, said.

He added that about one-third of generic drugs don't have a brand name competitor any more and "the court has now said that for those products nobody has any responsibility to bring information to the agency's attention."

The court noted in a footnote that situations like this case are apparently so rare that FDA has no "formal regulation" establishing a duty for generic manufacturers to initiate a label change. Bogard noted that there are over 1,000 metoclopramide cases in the courts. He said there would be renewed motions by companies to dismiss cases based on the ruling.

Asked if brand name companies can be held responsible in generic cases, Bogard said that the lower courts have been split on the issue but most have held that a brand-name company cannot be sued if the plaintiff did not take its product. But, he said, the Supreme Court's decision "will provide a powerful impetus for courts to revisit and consider the possibility of liability for brand names."

- Brenda Sandburg ([email protected])