Alabama Immunizes Pharmaceutical Companies From Tort Claims Over Generic Versions of Their Drugs

On May 4, 2015, Alabama Governor Robert Bentley signed into law senate bill SB80, a bill that immunizes innovator pharmaceutical companies from tort claims over generic versions of their drugs.

The law overturns a 2013 ruling by the state Supreme Court that found Wyeth liable for injuries allegedly caused by a generic version of its drug Reglan.  See Wyeth, Inc. v. Weeks, 2013 WL 135753 (Ala. Jan. 11, 2013), withdrawn and superseded, 2014 WL 4055813.  In Weeks, the plaintiff sued five pharmaceutical companies -- including 3 brand-name defendants -- for fraudulent misrepresentation and failure to warn of the risks of long-term use of metoclopramide, the generic version of Reglan.  Despite conceding that that plaintiff never used brand-name Reglan, the Court held that "a brand-name-drug company may be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture of a brand-name prescription drug, by a plaintiff claiming physical injury caused by a generic drug manufactured by a different company."  The Court reasoned that its holding was "not fundamentally unfair" because the "alleged misrepresentations were drafted by the brand-name manufacturer and merely repeated, as allowed by the FDA, by the generic manufacturer."

Under the new law, however, "designers, manufacturers, sellers, or lessors of products not identified as having been used, ingested, or encountered by the claimant may not be held liable for the claimant's alleged injury." SB80 brings Alabama in line with most other states, which traditionally allow only manufacturers that actually made the product used by the plaintiff to be held liable.  The law takes effect six months after signature and is not retroactive.

Food Industry Groups Challenge First-in-the-Nation GMO Statute

A federal judge recently ruled that the genetically modified organism (GMO)-labeling requirements of Vermont's controversial Act 120 will go into effect while it is being challenged in court. The case is Grocery Manufacturers Association v. William H. Sorrell, case number 5:14-cv-00117, in the US District Court for the District of Vermont.

The case was filed in June 2014 by several food industry groups lead by the Grocery Manufacturers' Association (GMA) on grounds that requiring labeling of genetically modified food ingredients violates the Commerce Clause and the First Amendment.  GMA also sought a preliminary injunction blocking the law, claiming it will be difficult, if not impossible, for food companies to comply with these requirements for Vermont and not for the entire country.  In its complaint, GMA argued that Act 120 "compels manufacturers to use their labels to convey an opinion with which they disagree, namely, that consumers should assign significance to the fact that a product contains an ingredient derived from a genetically engineered plant."

US District Court Judge Christina Reiss partially granted Vermont's motion to dismiss, finding that Act 120 does not violate the Commerce Clause, nor had GMA shown it was likely to succeed on certain First Amendment arguments. Judge Reiss did, however, find that GMA had made a plausible claim that Act 120's restriction on the use of the word "natural" on products with GMOs was likely to be invalid under the First Amendment, and so she enjoined that portion of the statute.

This decision comes on the heels of Vermont's attorney general adopting regulations to implement Act 120, effective July 1, 2016, which would provide guidance to manufacturers and sellers about how to comply with Act 120 (including setting forth specific lanugage in labels for food with GMOs, and exempting certain products, including meats and food bearing a USDA label).

The court's ruling, however, does not mean that Act 120 ultimately will survive GMA's challenges or that the regulations will become effective as scheduled.  GMA appealed the decision on the preliminary injunction to the Second Circuit, and meanwhile the trial court will proceed to consider the merits of the suit -- Plaintiffs filed an amended complaint for declaratory and injunctive relief on June 1, 2015.  Congress is also considering legislation that would preempt state regulation of GMO-labeling, while consumer class actions over the use of the term "natural" on foods containing GMO ingredients continue in California and other jurisdictions.

First Circuit Holds That Federal Law Preempts State-Law Claims Involving Brand-Name Drugs

On February 23, 2015, the First Circuit ruled that state-law claims asserting a brand-name drug label is false or misleading are preempted by the Federal Food, Drug, and Cosmetic Act (FDCA) when the branded company could not have changed the label without prior FDA approval. See In re Celexa and Lexapro Marketing & Sales Practices Litigation (Marcus v. Forest Laboratories, Inc.), 779 F.3d 34, 43 (1st Cir. 2015).

In In re Celexa and Lexapro, plaintiffs filed a putative class action against the branded manufacturer of  Lexapro, alleging that the FDA-approved drug label misleads consumers by omitting material efficacy information in violation of California law.  The district court held that these claims were barred by California's "safe harbor" doctrine, which exempts from liability conduct that is authorized by state or federal law.  Based on its application of the safe harbor doctrine, the district court dismissed these claims and did not address the defendants' preemption arguments.

The First Circuit unanimously affirmed the district court's judgment on other grounds: federal preemption.  In conducting its analysis, the Court explained that recent Supreme Court cases draw a line "between [labeling] changes that can be independently made using the CBE regulation and changes that require prior FDA approval."  Id.  The CBE regulation permits manufacturers to implement certain labeling changes without FDA pre-approval when new safety information becomes available.  Because the plaintiffs argued that the label is misleading based on information that was already known to the FDA prior to the label's approval, the Court determined that the manufacturer could not use the CBE procedure to alter the FDA label in the way that the plaintiffs alleged was necessary to avoid misleading consumers.  Accordingly, the Court held that the plaintiffs' state-law claims were preempted because the manufacturer could not independently change the label to comply with state law.

In re Celexa and Lexapro reinforces that branded companies need to continue to vigorously pursue preemption defenses in the post-Wyeth v. Levine world.  The rationale of more recent Supreme Court cases, which find preemption against generic companies, can also extend to brand drug manufacturers in situations where the branded company cannot unilaterally change labeling.

DC Circuit Affirms FTC's Substantiation Ruling, but Rejects Two-Study Requirement

In a highly anticipated and publicized ruling, the DC Circuit in Pom Wonderful, LLC v. FTC, 777 F.3d 478 (D.C. Cir. 2015), largely upheld the Federal Trade Commission's ruling that Pom Wonderful, LLC cannot claim that its products treat or prevent diseases without adequate scientific evidence.

In advertisements from 2003 to 2010, Pom claimed that its products treat or prevent various ailments.  The Federal Trade Commission filed an administrative complaint, alleging that Pom made false, misleading, and unsubstantiated representations.  The full Commission held Pom liable and ordered Pom to stop making misleading and unsubstantiated claims about the health benefits of its products.  The Commission also barred Pom from asserting that its products treated or prevented any disease in future advertisements unless supported by two randomized and controlled human clinical trials.

The DC Circuit largely affirmed the Commission's order, upholding its finding that many of Pom's  advertisements were not properly substantiated and that experts in the field required randomized and controlled trials to support claims regarding the disease-related benefits of Pom's products.  The Court explained that the need for such trials was driven by the specific type of claims Pom made.  But the Court rejected the FTC's categorical requirement that Pom have at least two such studies before making a disease- related claim.  In doing so, the Court accepted Pom's First Amendment argument and determined that the FTC did not establish a reasonable fit between the two-study requirement and the government's interest in ensuring the accuracy of companies' representations.  A more in-depth analysis of the DC Circuit's decision and its implications for FTC and FDA substantiation is available here.

Pom Wonderful sheds light on the required substantiation for disease-related claims and will help shape advertisers' disclosures going forward.  It is clear that companies making specific disease-related claims must have at least one randomized and controlled human trial.  Advertisers should also carefully evaluate the nature of the claims they are making, which will affect the level of substantiation required.