The U.S. Supreme Court, in a 5-4 ruling, has determined that state-law design-defect claims that “turn on” the adequacy of a generic drug’s warnings are preempted by federal law under PLIVA, Inc. v. Mensing. Mut. Pharm. Co., Inc. v. Bartlett, No. 12-142 (U.S., decided June 24, 2013. So ruling, the Court reversed a First Circuit decision upholding a $21.06-million jury award to a woman who developed permanently crippling toxic epidermal necrolysis from using the generic version of a nonsteroidal anti-inflammatory drug for shoulder pain. Additional details about the First Circuit’s ruling appear in the May 10, 2012, issue of this Report.

According to the Court’s majority, New Hampshire imposes design-defect liability where “the design of the product created a defective condition unreasonably dangerous to the user.” The state’s courts use a “risk-utility approach” to decide whether a product is “unreasonably dangerous.” Under that approach, “a product is defective as designed if the magnitude of the danger outweighs the utility of the product.” Three factors are considered as part of the risk-utility inquiry: “the usefulness and desirability of the product to the public as a whole, whether the risk of danger could have been reduced without significantly affecting either the product’s effectiveness or manufacturing cost, and the presence and efficacy of a warning to avoid an unreasonable risk of harm from hidden dangers or from foreseeable uses.”

Finding that redesign was not possible, because federal law 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,” and that the jury determined that the drug maker breached its duty to adequately label the generic drug “so as to render the drug not ‘unreasonably dangerous,’” the Court held that the only way for the defendant to avoid liability in New Hampshire would be to strengthen the warning label, something that federal law prohibits.

The Court directly addressed the First Circuit’s reasoning that the defendant “could escape the impossibility of complying with both its federal- and state-law duties by ‘choos[ing] not to make [the drug] at all.” It stated, “We reject this ‘stop-selling’ rationale as incompatible with our pre-emption jurisprudence. Our pre-emption cases presume that an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability. Indeed, if the option of ceasing to act defeated a claim of impossibility, impossibility pre-emption would be ‘all but meaningless.’”

In his dissenting opinion, joined by Justice Elena Kagan, Justice Stephen Breyer opined, “It is not literally impossible here for a company like petitioner to comply with conflicting state and federal law. A company can comply with both either by not doing business in the relevant State or by paying the state penalty, say damages, for failing to comply with, as here, a state-law tort standard.” In her dissenting opinion, joined by Justice Ruth Bader Ginsburg, Justice Sonia Sotomayor said, “Today, the Court unnecessarily and unwisely extends its holding in Mensing to preempt New Hampshire’s law governing design-defects with respect to generic drugs” and did so “by concluding that petitioner Mutual Pharmaceutical was held liable for a failure-to-warn claim in disguise, even though the District Court clearly rejected such a claim and instead allowed liability on a distinct theory.”

In a related development, six U.S. senators and representatives responded to the Bartlett ruling by calling on Food and Drug Administration (FDA) Commissioner Margaret Hamburg “to expedite its consideration of revisions to the FDA’s drug labeling regulations to enable manufacturers of generic drugs to update patient safety labeling in appropriate circumstances. These changes are critically important to ensure that the public is adequately informed of the risks and benefits of prescription drugs, and that consumers who are injured by generic drugs have the same legal rights as those who are injured by the brand-name versions of the same drugs.” The June 24, 2013, letter is signed by Sens. Patrick Leahy (D-Vt.), Tom Harkin (D-Iowa) and Al Franken (D-Minn.), and Reps. Chris Van Hollen (D-Md.), Bruce Braley (D-Iowa) and Henry Waxman (D-Calif.).

Meanwhile, consumer advocacy organization Public Citizen, which petitioned FDA in 2011 to request that the agency amend its regulations to permit generic drug makers to use the same procedures for updating product labels available to brandname manufacturers, released a report on June 24 titled “Generic Drug Labeling: A report on serious warnings added to approved drugs and on generic drugs marketed without a brand-name equivalent.” The report discusses drugs to which black-box warnings were added “calling attention to serious or life-threatening risks … after generic market entry.… The data show that new safety issues commonly arise after generics have entered the market, and underscore the public health imperative of maintaining an incentive for generic manufacturer surveillance of safety concerns.”

Public Citizen also contends that generic competition “frequently leads the brandname manufacturer to cease production of the brand-name drugs. For these drugs, patients and physicians cannot rely on the brand-name manufacturer to monitor reports of adverse effects and update the labeling.” The report characterizes generic companies’ inability “under current regulations to update the labeling of their products a threat to the safety of prescription drugs, creating unnecessary risks to patients.”