On June 23, 2011, the Supreme Court issued a ruling that will alter the liability landscape for generic drug manufacturers. In PLIVA, Inc., et al. v. Mensing, the Supreme Court immunized generic manufacturers for defective labeling under the theory that states’ failure-to-warn claims are preempted by federal law. According to the Court, because the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act (FDCA) require generic manufacturers to utilize identical warning labels as their brand-name counterparts, it would be “impossible” for generic manufacturers to comply with both state and federal laws; therefore, state law must accordingly give way to federal law.

The decision was premised on the Supremacy Clause in Article VI of the U.S. Constitution, which has been interpreted to invalidate state laws when compliance with both state and federal law is impossible. Against this backdrop, the Supreme Court had ruled in Wyeth v. Levine, 129 S.Ct. 1187 (2009), that the FDCA did not preempt state failure-to-warn claims against brand-name drug manufacturers. The Court concluded that state-law suits posed no obstacle to federal objectives under the FDCA and that Congress did not enact an express preemption provision at any point during the FDCA’s 70-year history, despite its awareness of the prevalence of state tort litigation.

A different result was reached in Mensing. Writing for the majority, Justice Clarence Thomas found that generic manufacturers, unlike brand-name manufacturers, cannot unilaterally add safety information to their labels through the Food and Drug Administration’s “changes-being-effected” (CBE) process. In deference to the FDA’s interpretation of its own regulations, the Court held that generic manufacturers are prohibited from adding a warning to their label if that warning would make the label of their drug different than the label of their name-brand counterpart.

The Court also rejected the contention that generic manufacturers, like brand-name makers, could have used “Dear Doctor” letters to send additional warnings and supplemental information to healthcare professionals who prescribe their drugs. According to the Court, “Dear Doctor” letters would run afoul of the FDCA and FDA regulations that treat such letters as changes to the labels — actions that generics are prevented from taking.

The Court opted against ruling on the theory advocated by the respondents and the FDA that generic manufacturers could have proposed, and were required to propose, more robust warning labels to the FDA if the generic manufacturers believed such warnings were warranted. The Court deemed the issue unnecessary because it found preemption regardless of whether such a duty existed. Even if the generic manufacturers would have requested FDA assistance, thereby satisfying their federal duty, such action would not have fulfilled their state tort law obligation to provide adequate warnings. “Here, state law imposed a duty on the manufacturers to take a certain action, and federal law barred them from taking that action,” Justice Thomas wrote. “The only action the manufacturers could independently take — asking for the FDA’s help — is not a matter of state-law concern … [The] tort claims are preempted.”

This case has obvious and immediate implications for generic drug manufacturers now subject to state suits for inadequate warnings. However, the decision’s broader significance is more profound as it considerably reduces the litigation exposure of generic drug manufacturers as failure-to-warn claims are often the easiest to prove for plaintiffs. Now, plaintiffs are relegated to the murkier and more perilous waters of proving a design defect, contaminated drug, or manufacturing glitch against generic manufacturers in order to establish liability. As evidenced by the majority opinion, a finding of preemption in Mensing but not in Wyeth “makes little sense.” According to Justice Thomas, “[h]ad plaintiffs taken Reglan, the brand-name drug prescribed by their doctors, Wyeth would control and their lawsuits would not be preempted. But because pharmacists, acting in full accord with state law, substituted [a] generic [drug] instead, federal law pre-empts these lawsuits.” Thus, it bears keeping a close watch on whether Congress acts on this perceived discrepancy by amending the FDCA to create or authorize a remedy against generic manufacturers for defective labeling.