The Supreme Court ruled on June 24, 2013 that, under its 2011 decision in PLIVA, Inc. v. Mensing, state-law “warning-based” design-defect claims against generic drug manufacturers are preempted by federal law. Perhaps most significantly, the Court rejected the First Circuit Court of Appeals’ rationale that, because Mutual could have opted to stop selling the drug, impossibility preemption did not exist. The 5-4 decision in Mutual Pharmaceutical Co., Inc. v. Bartlett, No. 12–142, 2013 WL 3155230 (Jun. 24, 2013) mirrored the same split of justices as in Mensing.

Both Bartlett’s rejection of the First Circuit’s “stop-selling rationale” and its finding that a drug redesign was not possible for Mutual “as a matter of both federal law and basic chemistry” will have implications beyond the generic manufacturer context. 2013 WL 3155230, at *3. At a minimum, Bartlett will further shield generic drug manufacturers from state tort liability and put a stop to one plaintiff’s tactic post-Mensing—that of recharacterizing the failure-to-warn claims foreclosed by Mensing as design-defect claims. In addition, Bartlett appears to confirm that the “duty of sameness” for generic manufacturers applies not only to the generic drug’s labeling, but also to its active composition. See id. at *11.

Bartlett joins Wyeth v. Levine, 555 U.S. 555 (2009), and PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), in defining the framework for state tort liability of brand-name and generic drug manufacturers. In Levine, the Supreme Court held that failure-to-warn claims brought by personal injury plaintiffs against brand-name manufacturers are not preempted by federal law. This was because brand-name manufacturers are able to strengthen their warnings unilaterally through the FDA’s “changes being effected” (CBE) process, enabling them to comply with both state and federal law obligations. By contrast, generic manufacturers cannot utilize the CBE process and are required to match the labeling of the brand-name drug. Thus, the Court came out the opposite way in Mensing two years later, holding that federal law did preempt failure-to-warn claims against generic manufacturers.

Bartlett now extends Mensing to preempt state-law “warning-based” design-defect claims against generic drug manufacturers. But the reasoning that the Court in Bartlett employs to get there has broader implications.

Background

Karen Bartlett developed toxic epidermal necrolysis manufactured by Mutual after taking generic sulindac in December 2004. Toxic epidermal necrolysis is a rare side effect affecting the skin that is common to all nonsteroidal anti-inflammatory drugs (NSAIDs) such as sulindac. In 2005, the FDA recommended changes to the labeling of all NSAIDs to more explicitly warn against the risk of toxic epidermal necrolysis. However, this change came only after Bartlett developed the condition, which left her severely disfigured and permanently disabled.

Bartlett brought suit against Mutual in New Hampshire state court, and the case was subsequently removed to federal court. Although Bartlett initially asserted both failure-towarn and design-defect claims, the district court dismissed the failure-to-warn claim after her doctor admitted to never reading the drug label or insert. The case proceeded to trial on the design-defect claim, where the jury awarded Bartlett a US$21 million jury verdict against Mutual. The Supreme Court reversed the jury verdict.

The Supreme Court’s Holding

Key to the Supreme Court’s finding of impossibility preemption was its determination that New Hampshire’s design-defect cause of action ultimately imposed on Mutual a duty to strengthen sulindac’s label. Thus, the Court viewed the “warning-based” design-defect as analogous to the failure-to-warn claim in Mensing and found Bartlett’s designdefect claim to be preempted.

To reach this conclusion, the Court first undertook an examination of New Hampshire law. First, the Court noted that New Hampshire law imposed a duty on manufacturers to ensure that their products are not “unreasonably dangerous.” The Court then noted that this duty encompassed the further duties of either changing the product’s design or strengthening its warnings. Because Mutual could not change its drug’s design, the Court found that the statelaw duty to ensure that a product is not unreasonably dangerous was, in this instance, essentially a state-law duty to strengthen the warning. And this was the very thing that Mutual, as a generic drug manufacturer, could not do. In finding Bartlett’s claim to be preempted, the Court was clear: a state cannot impose a duty to take steps that federal law prevents.

The Court proceeded to reject the First Circuit’s reasoning that Mutual could escape the impossibility of complying with both its federal and state law duties by withdrawing from the market altogether. For the Court, this was simply inconsistent with its impossibility preemption jurisprudence. The Court noted that in all previous cases in which it found impossibility preemption, including Mensing, the “direct conflict” between federal and state law duties could have been avoided if the regulated actor ceased acting.

Implications

Notably, in reasoning that Bartlett’s design-defect claim necessarily devolved into an adequacy of the warning inquiry, the Court seemingly dismissed drug redesign as an option for Mutual right off-the-bat. The Court recognized that, under FDA regulations, any change in the chemical composition of a drug results in the creation of a new drug that would have to go through its own NDA process. Id. at *8. The Court further recognized that, as a matter of “basic chemistry,” an alternative drug design may simply not be possible.

However, both points—the inability of a manufacturer to unilaterally change the chemical composition of its drug as a legal matter and, in certain cases, as a factual matter— would apply with equal force to brand-name drugs. Bartlett’s reasoning also lends support to the rationale behind comment k to §402A of the Restatement (Second) of Torts, which provides that “unavoidably unsafe” products are not defective if accompanied by proper warnings.

Finally, there is an open question regarding the implications of Bartlett’s rejection of the “stop-selling” rationale. The Court held that a manufacturer’s option of not participating in the market in the first place does not get around preemption. As Justice Sotomayor notes in her dissent, Bartlett’s reasoning in this regard appears to necessitate an automatic conflict with state tort law in all instances involving federal premarket review requirements. See id. at *26. Indeed, she accuses the majority of conferring de facto immunity to such federally regulated companies from design-defect liability. See id.

Conclusion

The Supreme Court’s apparent willingness to dismiss the feasibility of design changes in the prescription drug context will be helpful to those seeking to defend against nonwarning- based design-defect claims or to assert a comment k argument. In addition, defendants should also be mindful of the broader implications of the Supreme Court’s rejection of the “stop-selling” rationale, which extends beyond generic drug manufacturers, and beyond the pharmaceutical industry itself.