The Supreme Court’s 5-4 ruling in Mutual Pharmaceutical Co. v. Bartlett, ___ U.S. ____ (June 24, 2013), offers welcome clarity to generic drug manufacturers: reaffirming that state tort claims against those manufacturers are preempted by the Hatch-Waxman Amendments to the Food, Drug and Cosmetic Act (“FDCA”), and by the Court’s landmark decision in Pliva v. Mensing, 113 S.Ct. 2567 (2011). In so doing, the Court decisively rejects the argument that a generic manufacturer may avoid conflict and comply with both state and federal law by simply “choosing not to make the drug at all.”

I. The Mensing Regime

In Mensing, the Supreme Court held that the Hatch-Waxman Amendments prevent plaintiffs from bringing state tort claims against generic drug manufacturers. Because Hatch-Waxman compels generic manufacturers to use – and prevents them from varying – the FDA-approved label used on branded versions of the drug, the Court found it “impossible” for a generic manufacturer to comply with state tort duties that would require a stronger warning label. To the extent state law required a generic manufacturer to include such warnings, the Court held, the state law was preempted by Hatch-Waxman, and could not constitutionally be applied.

Plaintiffs greeted Mensing with dismay. Almost immediately, they began looking for ways to reverse it or narrow its reach. A few weeks after Mensing was decided, plaintiffs asked the Supreme Court for rehearing, arguing that the Court in Mensing had "overlook[ed] the fact that the ... generic drug companies could have 'independently' complied with both state and federal law by simply suspending sales of general metoclopramide with warnings that they knew or should have known were inadequate." This argument was not wholly correct. In fact, the “stop-selling” theory had been fully briefed and discussed in the Eighth Circuit’s Mensing decision, which the Court reviewed and reversed. Thus, the Supreme Court in Mensing had not “overlooked” plaintiffs’ “stop-selling” theory, but had ignored it. In any case, the Court summarily denied plaintiffs' rehearing petition, and remanded to the Eighth Circuit, which dismissed Mensing’s claims.

However, Plaintiffs didn’t give up. Over the past several years, in a number of lower federal courts, they have continued to press the argument the Mensing plaintiffs made in their unsuccessful rehearing petition. Among other things, they have suggested that a generic manufacturer, even if barred from changing the label or strengthening the warnings on a product it knew to be dangerous, could always recall the drug or suspend its distribution, and could be held liable in tort for failing to do so.

Most lower courts rejected these arguments. But last summer, in Bartlett, the First Circuit diverged from this authority: finding a generic manufacturer, Mutual Pharmaceutical, could be held liable under New Hampshire law to a seriously injured plaintiff, Karen Bartlett, for complications from sulindac, a generic anti-inflammatory drug.

Bartlett’s "failure to warn" claims had been dismissed by the trial court, based on her prescribing doctor’s admission that that he never read the box label or insert. Nonetheless, the district court allowed her claims to go to trial on a theory of "design defect," i.e., a theory that "sulindac's risks outweighed its benefits making it unreasonably dangerous to consumers." A New Hampshire jury held against Mutual, and awarded Bartlett $21.06 million in compensatory damages. The First Circuit upheld the verdict, finding Bartlett's "design defect" claim was not preempted by Mensing. Although it acknowledged that Mutual could not be held liable for failure to warn, it found that Mutual nonetheless could have chosen "not to make the drug at all ... if risk-benefit analysis weighs against [continued distribution]." It construed Mensing narrowly, limiting its scope to “failure-to-warn claims against generic drug manufacturers," and said, in the absence of definitive guidance, it should be "up to the Supreme Court to decide” whether the exception “is to be enlarged to include design defect claims." Mutual sought review, and the Supreme Court agreed to hear the case.

II. The Bartlett Decision

Justice Alito’s decision in Bartlett amounts to a sweeping reaffirmation of Mensing. It confirms that plaintiffs are precluded from bringing state-law failure-to-warn suits against a generic pharmaceutical manufacturer that manufactures a drug “chemically equivalent to the approved brand-name drug” – in compliance with the requirements of Hatch-Waxman – and utilizes the warning label used by a name-brand manufacturer, as Hatch-Waxman prescribes. In such cases, the Court held, “it is impossible for [the generic manufacturer] to comply with both its state-law duty to strengthen the warnings on [the drug’s] label and its federal-law duty not to alter [that] label,” and any state-law claim for “failure to warn” is preempted.

In addition, the Court rejected the First Circuit’s argument that “design defect” claims might survive Mensing’s reach. New Hampshire law, as construed in Bartlett, requires manufacturers to “ensure that the products they design, manufacture and sell are not ‘unreasonably dangerous.’” This duty can be satisfied either by changing the drug's label, or by changing its design. However, in the case of sulindac and other generic drugs, no design change was possible: sulindac was a single-molecule drug that was “chemically incapable of being redesigned,” and, in any event, the FDCA “requires a generic drug to have the same active ingredients, route of administration, dosage form, strength, and labeling as the brand-name drug on which it is based.”

Finally – and most important of all – the Supreme Court rejected the First Circuit’s argument that Mutual could have avoided liability for design defect under New Hampshire law by “choos[ing] not to make [sulindac] at all.” The Court held that this “stop-selling rationale” was inconsistent with the Court’s previous cases, including Mensing: because it is almost always possible for a regulated actor to withdraw from the market, “the First Circuit’s ‘stop-selling’ rationale would mean that … the vast majority – if not all – of the cases in which the Court has found impossibility preemption were wrongly decided.” As a general rule, the Court held, “an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability.”

Justice Alito concluded the Bartlett decision – as had Justice Thomas in Mensing – by saying the Court would welcome Congressional clarification of “the difficult pre-emption questions that arise in the prescription drug context.” The obvious next step for plaintiffs may be to seek Congressional clarification. It is an open question, however, whether the effort will be successful, particularly in the current divided Congress. In the meantime, thanks to Bartlett, generic manufacturers will remain immune from most “failure to warn” and “design defect” claims under state tort law.