The Federal Preemption Defense for Generic Drug Manufacturers May Be Short Lived

April 03, 2012

The U.S. Supreme Court Holds That State Law Failure To Warn Claims Against Generic Drug Manufacturers are Preempted by Federal Law

In a 5 — 4 decision last year, the United States Supreme Court held in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) that the Hatch-Waxman Amendments to the federal Food, Drug and Cosmetic Act preempt state law failure to warn claims brought against manufactures of generic drugs. The majority opinion concluded that federal law prohibits manufacturers of generic drugs from unilaterally changing the safety warnings contained in a product’s labeling‚ making it impossible for generic manufacturers to comply with both their state law duty to update the label as new risks are discovered and their federal duty to keep the label the same as the brand label.

A manufacturer seeking federal approval to market a new drug must prove that it is safe and effective and that the proposed label is accurate and adequate. Although the same rules originally applied to all drugs, the 1984 law commonly called the Hatch-Waxman Amendments allows a generic drug manufacturer to gain FDA approval by showing that its drug is bioequivalent to an already-approved brand-name drug and that the product labeling proposed for its drug is the same as that approved for the brand-name drug.

The Supreme Court’s opinion, which effectively insulates generic manufacturers from state law failure to warn claims, is based largely upon its deference to the FDA’s interpretation of its own regulations. In its amicus brief to the Court, the FDA explained that generic manufacturers may only use the CBE process, a process by which brand manufacturers may change their labels without pre-approval from the FDA, when the generic changes its label to match an updated brand-name label or to follow FDA’s instruction. The Supreme Court, in deferring to FDA’s interpretations regarding the CBE provisions, concluded that the CBE process was not available to generic drug manufacturers‚ and, hence, generic manufacturers could not avail themselves of the process in order to comply with state law. Thus, state law claims against generic manufacturers are preempted.

Calls for Pliva v. Mensing to be Overturned

On March 20, 2012, the New York Times published an article entitled “Generic Drugs Proving Resistant to Damage Suits,” which states that more than 40 judges have dismissed state law failure to warn cases against generic manufacturers since the Supreme Court’s decision last year.

The article also purports to simplify the issue of whether generic manufactures should be entitled to preemption by suggesting two patients who suffer the same harm from the same drug now have vastly different legal rights depending upon whether the drug each of them took is a brand drug or a generic drug. While it may be true that the one who took a brand drug can make a state law failure to warn claim against the supplier while the one who took the generic drug cannot, the article also acknowledges the policy decisions underpinning Hatch-Waxman Amendments, including more affordable drugs for all Americans as a result of not having to engage in the lengthy and expensive approval process that brand drugs must go through.

A plaintiff’s lawyer group and a consumer advocacy group recently petitioned the FDA to allow generic-drug makers to change their labels more quickly to disclose previously unknown safety risks when they arise. In other words, these groups have petitioned the FDA to re-interpret its regulations in a way that would make generic manufacturers once again liable under state law failure to warn claims. These groups argue in their petition that 70 percent of prescriptions filled in the U.S. now are for generic drugs and that “increased responsibilities” come with that growth.

On Monday, Senator Patrick Leahy, D-Vt., joined with the above-referenced interest groups in criticizing the PLIVA v. Mensing decision and promised legislation to effectively overturn the decision. It has been reported that the interest groups are not optimistic that any legislation to overturn the decision will be passed in an election year, but they are more optimistic that this growing criticism of the decision may compel the FDA to change its regulations on its own.

Pharmaceutical companies with generic drug businesses should monitor the progress of the petition to the FDA and any legislative efforts by Senator Leahy and others to overturn PLIVA.

This article was originally published by Bingham McCutchen LLP.