Generic Liability Battle Shifts With FDA’s Labeling Rule Even As Some Court Issues Remain Unresolved

Teva attorney says forthcoming proposed rule to allow ANDA holders to change their labels raises host of questions; generic manufacturers have lost some cases alleging failure to update their label, which may lead to another Supreme Court review.

While generic drug manufacturers won a Supreme Court decision that shields them from product liability suits, they are wary of a forthcoming FDA proposed rule that could eliminate that protection.

“I can’t believe that the FDA wants a regime where generics can lead the way and make label changes and different generic companies can make different label changes from each other,” said Jay Lefkowitz, a partner at Kirkland & Ellis who represented Mutual Pharmaceutical Co. Inc. before the Supreme Court.

“I also think fundamentally this will run into a serious statutory problem,” Lefkowitz said during an American Conference Institute meeting on generic drugs, held in New York July 17-18.

The proposed rule would amend FDA regulations to enable an ANDA holder to change the labeling of an approved drug to reflect certain types of newly acquired information before FDA’s review of the change. Currently, only NDA holders are able to make such “changes being effected” (CBE) labeling supplements. FDA is slated to issue a notice of proposed rulemaking in September. The agency submitted a notice to the Office of Management and Budget of its intention to do so, which OMB announced on July 3 (Also see "GPhA Makes Spreadsheet Case For Patent Settlements After Legal Loss" - Pink Sheet, 15 Jul, 2013.).

FDA’s action follows two Supreme Court decisions that found federal law preempts state law tort claims against generic manufacturers. In 2011, the court ruled in Pliva Inc. v. Mensing that claims that a company failed to adequately warn of a product’s risks cannot be brought against generic manufacturers since FDA regulations require generic drugs to have the same labels as the corresponding brand name products. And in June, the court held in Mutual Pharmaceutical v. Bartlett that they cannot be sued for design-defect claims that turn on the adequacy of a drug’s warnings (Also see "Supreme Court Strengthens Generic Liability Shield; FDA Reg Change Could Create Opening" - Pink Sheet, 24 Jun, 2013.).

Will Generic Liability Claims Be Revived?

Brian Rubenstein, executive counsel, legal affairs at Teva Pharmaceutical Industries Ltd., said the proposed rule raises numerous questions, such as whether FDA will allow ANDA holders to make a label change through a “changes being effected” supplement or a prior approval supplemental and whether the proposed rule will be consistent with the Hatch-Waxman law.

“Is this rule really about patient safety or is it just about protecting the right to sue?” Rubenstein asked at the ACI meeting. As for its potential impact on litigation, he questioned whether the rule will result in the revival of pre-Mensing claims, such as negligent pharmacovigilance or failure to test.

He said other questions include whether the rule will provide an adjustment period to adapt to the new regulatory regime and whether it will set forth specifically how much time companies have to make a label change if an NDA or ANDA holder makes a change.

Failure To Update Label Cases Progressing

As FDA moves forward with this regulatory change, generic companies remain entangled in product liability suits. Lefkowitz noted that in the wake of the Mensing decision, plaintiffs have been pursuing different theories of liability, including failure to effectively communicate; failure to timely update the drug label to match the brand’s updated label; and failure to report, or inadequate reporting of, post-market surveillance.

Lefkowitz said that federal appellate courts have shot down these claims with the exception of the failure to update claim, where there is a split of authority. Generic companies have won more cases than they have lost, but the split in the courts could lead to Supreme Court review. In Morris v. Wyeth, the U.S. Court of Appeals for the Fifth Circuit ruled against the plaintiffs, finding that only the federal government can bring such a claim. The deadline for plaintiffs to file a petition for Supreme Court review is Aug. 15.

In a loss for the generic industry, however, the California Court of Appeal, Fourth Appellate District Division Three ruled June 13 in Teva Pharmaceuticals USA Inc. v. The Superior Court of Orange County (Pikerie) that the plaintiff’s claims that generic drug makers failed to update their labels for generic Fosamax (alendronate) after Merck & Co. Inc.’s brand-name label was updated are not preempted by federal law. The U.S. Court of Appeals for the Sixth Circuit issued a similar ruling in March in Fulgenzi v. Pliva that failure to update claims against a generic manufacturer are permissible. That case involved Pliva labeling for generic Reglan (metoclopramide).

Some Design-Defect Claims May Still Be Possible

Lefkowitz also discussed a footnote in the Bartlett decision that the plaintiffs’ bar is using to try to get around preemption. The court said it was not addressing state design-defect claims that parallel the federal misbranding statute, which requires a manufacturer to pull a drug from the market when it is “dangerous to health” even if “used in the dosage or manner, or with the frequency or duration prescribed, recommended, or suggested in the labeling thereof.”

“The parties and the government appear to agree that a drug is misbranded under federal law only when liability is based on new and scientifically significant information that was not before the FDA,” the footnote states. The court noted that in the Bartlett case, since the jury was not asked to find whether new evidence concerning sulindac that had not been made available to the FDA rendered sulindac so dangerous as to be misbranded under the federal misbranding statute, the misbranding provision was not applicable.

In an amicus brief in support of Mutual, the Solicitor General had asserted that state tort law claims that parallel the Food, Drug, and Cosmetic Act’s prohibition against drug misbranding would not be preempted (Also see "FDA May Drop Generic Liability Shield, Allow ANDA Manufacturers To Change Labels" - Pink Sheet, 28 Jan, 2013.). Lefkowitz questioned how such a case would be litigated.

“How are you going to figure out what was before the FDA or not? Are you going to depose their scientists? Are you going to get an FOIA request and look at every document that the FDA looked at?” he asked. “It’s functionally impossible to litigate the kind of parallel claim misbranding case that the FDA has suggested might be available in a hypothetical way.” Moreover, Lefkowitz noted, the misbranding provision on its terms relates to how a drug is labeled, which the court has already held triggers preemption.

However, following the Bartlett decision, half a dozen plaintiffs have filed supplemental briefs with judges saying their claims are indeed parallel claims to a misbranding claim. Lefkowitz said he expects the courts to reject this claim but noted that the issue may end up having to be taken up by an appellate court before there is clarity on this.

Learned Intermediary Doctrine On The Line In Tennessee

Lefkowitz noted other legal challenges currently confronting the drug industry. In one case involving a brand company, Jones v. Abbott Laboratories Inc., the learned intermediary doctrine is being threatened. The doctrine holds that a drug manufacturer does not need to warn each patient about the risks of a drug if it provides proper warning to the prescribing physician. The U.S. District Court for the Western District of Tennessee has sent two certified questions to the Tennessee Supreme Court asking if the doctrine is applicable when there is direct-to-consumer advertising for a product or when doctors are getting compensation for clinical trials.

The district court is hearing a case in which the plaintiff claims she developed lymphoma after being prescribed Abbott’s Humira (adalimumab) for treatment of severe rheumatoid arthritis. The Washington Legal Foundation filed an amicus brief urging the Tennessee Supreme Court to reject the plaintiffs’ request that the court abolish the learned intermediary doctrine. WLF noted that only West Virginia has rejected the doctrine and only New Jersey has created a DTC advertising exception.