Preemption Preference: Supreme Court Seems Wary Of Having Jurors Override FDA Safety Decisions

During oral arguments in Mutual Pharmaceutical v. Bartlett, some justices seemed reluctant to close off a pathway for plaintiffs to seek compensation for generic drug injuries, but others indicated that it should be up to FDA rather than juries to make the call on whether a drug’s benefits outweigh its risks.

Generic manufacturers appeared to have an edge in convincing the Supreme Court to bar state tort suits alleging design defects in their products during oral arguments in Mutual Pharmaceutical Co.Inc. v. Bartlett.

Justices Sonia Sotomayor, Elena Kagan and Ruth Bader Ginsburg seemed reluctant to close an avenue for plaintiffs to seek compensation for injuries from use of a generic product. But other justices questioned leaving it to juries rather than FDA to decide that the risks of a drug outweigh its benefits.

Respondent Karen Bartlett developed Stevens-Johnson syndrome, a rare allergic reaction causing necrosis of the skin, after taking Mutual’s generic version of Merck & Co. Inc.’s non-steroidal anti-inflammatory Clinoril (sulindac). She sued Mutual, which is part of Sun Pharmaceutical Industries Ltd., under New Hampshire’s products liability law, which holds a manufacturer of an unreasonably dangerous product – i.e., one whose risks outweigh its benefits – liable for foreseeable injuries.

The Supreme Court addressed generic manufacturer liability two years ago, ruling 5-4 in Pliva Inc. v. Mensing that generic drug makers cannot be sued for failure to adequately warn of their products’ risks since federal law requires their labels to be the same as the corresponding brand name drug (Also see "Generic Firms Get Supreme Shield From Product Liability, But Court Hints At Reg Change" - Pink Sheet, 23 Jun, 2011.).

During March 19 oral arguments, the court considered whether individuals could pursue the design defect theory of liability. The case is crucial for both generic and brand-name drug makers as it could open them to much more litigation.

Does FDA Approval Preclude Tort Liability?

Justice Sotomayor asked Mutual’s attorney, Kirkland & Ellis partner Jay Lefkowitz, if his position was “that any time the FDA approves a product that there can never be a tort liability claim because the FDA’s approval is now the ceiling of what you can do?”

“We are sort of dancing around the argument – which is what happens with a truly dangerous drug, and we can posit one, that has nothing to do with a warning of whether it’s adequate or not, but a drug that on its face no reasonable practitioner … knowing all the benefits and risks, would ever prescribe this drug,” Sotomayor stated.

Justice Ginsburg asked Lefkowitz if he was saying FDA’s approval is a floor to enable you to market and also a ceiling that gives you a right to market. Justice Elena Kagan followed up saying that the federal Food, Drug, and Cosmetic Act authorizes you to sell something but doesn’t say you must sell it and doesn’t give you the right to sell it.

Sotomayor also pressed this point in questioning Anthony Yang, assistant to the Solicitor General, who argued in support of Mutual. “You’re basically saying the minute that the FDA gives you permission to sell, it’s a right to sell. And it can’t be altered by any state police power,” Sotomayor stated.

Yang said the government was not saying this. “What we are trying to do is preserve the FDA’s role here, not have juries second-guess on a case-by-case and state-by-state basis imposing different safety obligations on manufacturers when Congress has established a regime for FDA to control this,” he stated.

A jury found that Mutual’s sulindac was defective in design because it was unreasonably dangerous and awarded Bartlett $21 million in compensatory damages. The U.S. Court of Appeals for the First Circuit upheld the verdict finding that a design defect claim is not preempted by federal law because a manufacturer could simply “choose not to make the drug at all” in order to comply with both federal and state law.

Injury Compensation Program Could Offer A Solution

Justice Samuel Alito Jr. asked Lefkowitz if there would be a problem if New Hampshire had a strict liability regime so that whether or not a drug is unreasonably dangerous or not, if it causes an injury you pay.

Lefkowitz said problems of impossibility preemption – whereby compliance with both federal and state regulation is impossible -- would not be raised if there was an absolute liability scheme and a program in place similar to the vaccine compensation program, whereby individuals injured by vaccines can obtain compensation.

The justices did not discuss this compensation avenue. But in a press call following oral arguments, Lefkowitz raised it again. Asked what the justices will be looking at he said “everyone is looking to figure out what the policy is,” adding that it must be taken up through legislation rather than the courts.

“The National Vaccine Act could possibly be a model for dealing with adverse reactions,” he said. This 1986 statute established the vaccine injury compensation program to limit liability exposure for vaccine manufacturers. He noted that for years leading figures of the brand and generic industry have said a sensible compensation system would be a good step forward.

In the Mensing opinion the justices had cited the unfairness of individuals being able to sue for injuries if they took the brand-name drug but being precluded from doing so if they received the generic. FDA also may act to resolve the issue.

The Solicitor General noted in a footnote in his amicus brief that FDA is considering changing its regulations to allow generic manufacturers to change their labeling “in appropriate circumstances,” which could eliminate preemption of failure-to-warn claims against generic drug manufacturers (Also see "Pre-emption After Supreme Court Ruling May Depend On How FDA Weighs Risk" - Pink Sheet, 9 Mar, 2009.).

FDA Has To Make Call About Risks v. Benefits

Justice Antonin Scalia indicated that he would be against leaving it to juries to decide the risk-benefit analysis of a drug. “That’s wonderful,” he said. “Twelve tried men and true decide for the whole state what the cost-benefit analysis is for a very novel drug that unquestionably has some deleterious effects, but also can save lives.”

Chief Justice Roberts Jr. said the jury in this case did not say that you can market this drug but that you have to compensate the 0.1 percent injured but that the risks outweigh the benefits so you should not market it at all. That “does seem inconsistent with the federal regime,” he stated.

Justice Stephen Breyer, who noted that he dissented in the Mensing opinion, said FDA has to tell us about the risks and benefits of a drug.

“You see, you could in certain horrible cases find a very sympathetic plaintiff who really did suffer terribly,” he stated.”And you are getting 12 people rather than the FDA” to make a call about the drug.

“What I do in my mind is I say, beware, because it’s also true potentially of some of these life-saving drugs and that’s what’s worrying me,” Breyer said.

Bartlett’s attorney David Fredrick, of Kellogg, Huber, Hansen, Todd, Evans & Figel, responded that there are regulations that ensure a life-saving drug is on the market. “But surely in our system we have to trust district judges to be able to grant or deny judgments as a matter of law, where they conclude that the evidence would not be sufficient to show that the risk outweighed the benefit,” he stated.

Justice Kagan posed the first question, noting that the case seemed to be dealing with brand-name drugs as well as generics. As to design, “they’re really in the same boat,” she said. “If they change their design there’s no authority to continue marketing it. They have to go back to square one. And that’s just as true of brand names as it is of generics.”

The pharmaceutical industry also recognized the significance of the court’s ruling for brand-name companies. The Pharmaceutical Research and Manufacturers of America submitted a joint amicus brief with the Chamber of Commerce arguing that FDA’s risk-benefit analysis cannot be overridden by a lay jury (Also see "Generic Preemption Redux: Can Juries Deem A Drug Too Dangerous?" - Pink Sheet, 18 Mar, 2013.).

The generic industry had argued in their briefs that there was no distinction between failure-to-warn claims and defective design claims and some of the justices seemed to agree.

Justice Kagan noted that the adequacy of the warning was litigated throughout this case, which she said suggests that it is within the four corners of Mensing. Frederick asserted that liability would have been found in spite of the warning.