Pharma Outside the Fray As Obama Re-Evaluates Bush’s Pre-emption Policy

The good news for drug firms about President Obama's memo curtailing federal pre-emption state laws: It will not have any real impact on industry. The bad news: It will not matter because pre-emption in the drug arena already took a body blow in the Supreme Court's Wyeth v. Levine ruling.

The president sent a May 20 ¹ memorandum to the heads of executive departments and agencies stating that they should undertake pre-emption of state law only after thorough consideration of legitimate state authority and with a sound legal argument favoring pre-emption.

He specified that they should not include pre-emption statements in regulatory preambles "except where pre-emption provisions are also included in the codified regulation." And, he said, they should not include pre-emption provisions in codified regulations unless they are "justified under legal principles governing pre-emption," including a 1999 Executive Order.

The Obama administration signaled it was moving away from the Bush pre-emption doctrine in April when it withdrew the government's amicus brief in Colacicco v. Apotex.

In that case, the Solicitor General filed briefs supporting antidepressant drug manufacturers that argued that state tort claims alleging failure to warn of suicide risk were pre-empted by FDA-approved labeling (² (Also see "On Pre-emption, OTC Rule Among Signs Tipping Obama Administration’s Hand" - Pink Sheet, 11 May, 2009.), p. 7).

Medical Device Suits On Pre-emption Radar

While the memorandum does not specifically refer to federal pre-emption for medical device suits, it suggests that if pending legislation to remove protections from state lawsuits for manufacturers of devices that receive pre-market approval passes Congress, there is a good chance the president will sign it into law.

"The purpose of this memorandum is to state the general policy of my administration that pre-emption of state law by executive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the states and with a sufficient legal basis for pre-emption," the president writes.

"The federal government's role in promoting the general welfare and guarding the individual liberties is critical, but state law and national law often operate concurrently to provide independent safeguards for the public."

The Medical Device Safety Act, introduced in the House and Senate in March, would add language to the Medical Device Amendments stating that FDA device approvals do not preclude a state court's right to hear a personal injury lawsuit against a product manufacturer.

The legislation would reverse a 2008 Supreme Court finding that the statute as it currently stands supports such pre-emption for PMA devices (³ (Also see "Supreme Court Ties On FDA Pre-Emption; Congress Seeks To Resolve Issue" - Pink Sheet, 10 Mar, 2008.), p. 8).

10 Years Of Preambles Under Review

Obama also told department and agency heads to review regulations issued in the last 10 years that contain statements in regulatory preambles or codified provisions that are intended to pre-empt state law to determine if they are justified.

The announcement marks a sharp shift from the Bush administration, which promoted pre-emption of state laws. FDA advocated the policy under the leadership of Daniel Troy, who was appointed by Bush to FDA chief counsel in 2001 and is now GlaxoSmithKline's general counsel. The agency made pre-emption its official policy in the preamble to the 2006 physician labeling rule, which stated that FDA approval of labeling pre-empts conflicting state law.

Companies routinely cited the preamble as a defense against personal injury suits. But in Wyeth v. Levine, the Supreme Court rejected industry's argument that FDA-approved labeling pre-empts state tort claims. It also denounced the 2006 FDA preamble as "inherently suspect" since it reversed FDA's long-standing position that state law complements drug regulation (⁴ (Also see "High Court’s Wyeth v. Levine Ruling Returns Pre-Emption Status Quo" - Pink Sheet, 9 Mar, 2009.), p. 14).

For pharmaceutical product liability cases, the Obama memo "doesn't make any difference in light of Wyeth," said Brian Wolfman, director of Public Citizen Litigation Group and one of Levine's attorneys. FDA's "regulatory pre-emption was trashed by the Supreme Court so in that sense you don't really need this [memo] with respect to prescription drugs."

Mark Herrmann, a partner at Jones Day and co-author of the Drug and Device Law Blog, agreed that Obama's memo would have little impact in the pharmaceutical area.

"The Supreme Court already addressed [the drug labeling rule preamble] so it's off the table," he said.

Pre-emption Touches Many Rules

FDA inserted pre-emption language in several other proposed rules, including a proposed rule on pregnancy and lactation labeling and labeling on OTC drugs. But the preamble to the 2006 labeling rule is the agency's primary statement on pre-emption.

Obama's memo could lead to the revocation of pre-emption language in rules governing other industries.

Wolfman noted the National Highway Traffic Safety Administration included pre-emption language in a preamble to a proposed rule on vehicle roof crush standards.

The Consumer Product Safety Commission has a similar preamble to a final rule on mattress flammability that purports to pre-empt state tort law. And the Federal Railroad Administration included such language in a preamble to a proposed rule on front-end strength of cab cars and multiple-unit locomotives.

Wolfman said Obama's reevaluation of these rules is gratifying.

"This administration is likely to view state tort law as serving a role complementary to the role of the federal regulatory agency," he said.

- Brenda Sandburg ([email protected]) and Ingrid Mezo ([email protected])