Supreme Court Decides Prescription Drug Preemption Case in Favor of Drug Manufacturer

Morrison & Foerster LLP - Class Dismissed

The United States Supreme Court finally clarified its 11-year-old “clear evidence” standard for pharmaceutical preemption.  In its much-anticipated opinion delivered by Justice Breyer, the Court unanimously reversed the Third Circuit’s holding that questions of pharmaceutical preemption should be decided by juries.  Merck Sharp & Dohme Corp. v. Albrecht et al., No. 17-290, slip op. (U.S. May 20, 2019) (“Albrecht”).  However, those who had criticized the Third Circuit’s opinion were left wanting more—the limited holding does not reach the issue of whether plaintiffs’ claims against the manufacturer were preempted.

Background

Over 500 patients sued Merck alleging they suffered atypical femoral fractures, a rare type of stress fracture affecting the thigh bone, after using Merck’s Fosamax drug.  They claimed that Merck failed to disclose these risks on the drug label.  Merck countered that FDA had rejected or would have rejected its proposed addition to the drug label.  As a result, Merck said it could not comply with both federal drug labeling requirements and its duty to warn under state law.  In these circumstances, Merck argued, the federal law and regulations preempt the patients’ state‑law claims such that Merck should not be held liable for failing to disclose the stress fracture risks to consumers.

Merck based its argument on years of back-and-forth discussions with FDA about whether Fosamax could cause these types of stress fractures.  In 1995, when FDA first approved Fosamax, the label did not include the fracture warning because—at that time—the risk was still theoretical.  After more than a decade of post-market surveillance, Merck sought preapproval to add these risks to its Fosamax label in 2008.  FDA rejected Merck’s proposed change.  Not until 2011 did FDA agree to add language to the Fosamax label disclosing the risks of atypical femoral fractures.

Beginning in 2010, hundreds of patients filed lawsuits that were eventually consolidated in a multidistrict litigation in the District of New Jersey.  The district court granted Merck’s summary judgment motion on the ground that the patients’ state-law failure to warn claims were preempted by federal law.  The Third Circuit reversed, finding that the preemption question involved factual disputes the jury should have resolved and that Merck needed more evidence to meet the “clear evidence” standard set forth in Wyeth v. Levine to establish its preemption defense.

Defining Wyeth’s “Clear Evidence” Standard

In 2009, the Supreme Court issued the first of several important pharmaceutical preemption decisions in Wyeth v. Levine, 555 U.S. 555 (2009).  There, a Vermont jury found that Wyeth failed to provide an adequate warning that direct injection of its Phenergan drug created a significant risk of harm to patients.  The Vermont Supreme Court agreed, finding no preemption.

The U.S. Supreme Court affirmed.  In doing so, the Court explained that unless a drug manufacturer can show “clear evidence” that FDA would not have approved a change to its drug label, a court cannot conclude that it was impossible for the drug manufacturer to comply with both federal drug labeling requirements and state-law duty to warn requirements.  In other words, to succeed on this type of impossibility preemption defense, a drug manufacturer has to provide clear evidence that FDA considered the risk and made an affirmative decision to either (a) not change the label or (b) prohibit the manufacturer from strengthening its warning.

However, what constituted “clear evidence” under Wyeth remained unclear until now.  Post-Wyeth, courts have struggled to apply the undefined clear evidence standard to determine if the FDA would have rejected a proposed warning change that was never submitted.

In Albrecht, Merck had sought preapproval from FDA to strengthen Fosamax’s warnings, but that proposal was rejected.  When Fosamax users brought state-law failure-to-warn claims, Merck argued that the claims were preempted by federal law because the FDA had rejected Merck’s proposed changes to the Fosamax label.

The Court clarified that “clear evidence” means “evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug’s label to include that warning.”  This definition dispels the notion that the “clear evidence” standard is an evidentiary standard, as some district courts had interpreted it to be.

But whether the FDA’s action in Albrecht satisfies the standard is left open.  The Court did not actually reach the preemption question.

Preemption Questions Must Be Decided by the Judge

Next, the Court held that judges, not juries, must decide the question of whether state-law failure-to-warn claims are preempted by the Federal Food, Drug, and Cosmetic Act and related labeling regulations.  This includes whether there is clear evidence that FDA would not have approved the warning that state law requires.  The Court reasoned that resolving questions of agency disapproval often requires legal skills to understand an agency decision within the applicable regulatory framework.  The Court acknowledged that the preemption issue typically involves factual disputes but that these factual questions are “subsumed within an already tightly circumscribed legal analysis.”

Key Takeaways

  • Justice Thomas joined the opinion but wrote separately to say that Merck’s preemption defense failed. Why?  Because Merck relied on FDA response letters as evidence that Merck could not have strengthened its warning.  According to Justice Thomas, an FDA response letter cannot have preemptive effect because it is “not a final agency action with the force of law.”  His concurrence is surprising given that he wrote the majority opinion in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), holding that certain generic pharmaceutical failure-to-warn claims are preempted.
  • Justice Alito, joined by Justices Roberts and Kavanaugh, also wrote separately. He would have found preemption here and suggested that the Third Circuit should find “clear evidence” that the FDA would not have approved Merck’s label.  Justice Alito cited the record showing that FDA was deeply involved in the stress fracture issue for years, and that the agency has a statutory duty to require label changes upon learning new evidence warranting a change.  Under these circumstances, Justices Alito, Roberts, and Kavanaugh would have found preemption.
  • Defendants should welcome this clarity on the “clear evidence” standard, which relieves them of the confusing pseudo-evidentiary burden that some lower courts had applied.
  • Although the opinion may disappoint by not reaching the preemption question, Justice Alito’s concurrence provides drug manufacturers a roadmap for satisfying the “clear evidence” standard.
  • Given the favorable—albeit limited—holding, defendants should feel emboldened to assert a federal preemption defense in other areas beyond pharmaceuticals.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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