Pre-Emption of State-Law Design-Defect Claim Against Generic Drug Company

by Cozen O'Connor

On June 24, 2013, in a 5-4 decision, the U.S. Supreme Court in Mutual Pharmaceutical Co., Inc. v. Bartlett held that state-law design-defect claims based on the inadequacy of a generic drug’s labeled warnings are pre-empted by federal law. This decision reversed the 1st Circuit’s affirmance of a jury verdict awarding Bartlett more than $21 million on her design-defect claim against Mutual Pharmaceutical under New Hampshire law, based on serious physical injuries stemming from a hypersensitivity skin reaction she sustained as a result of taking Mutual’s sulindac product, a generic version of Clinoril, a nonsteroidal anti-inflammatory drug. This decision followed the pre-emption rule set forth in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011) in which the Court held that failure-to-warn claims against generic manufacturers are pre-empted by the Federal Food, Drug, and Cosmetic Act’s (FDCA) prohibition on changes to generic drug labels.

The Supreme Court explained that under the Constitution’s Supremacy Clause, state laws that conflict with federal law are “without effect”; and here, it is impossible for Mutual to comply with both its federal-law duty not to alter sulindac’s label or drug composition and its state-law duty to either strengthen the warnings on sulindac’s label or change sulindac’s composition.

The Court explained that New Hampshire’s design-defect cause of action imposes a duty on manufacturers to design their products reasonably safely for foreseeable uses and to assess whether a product’s design is “unreasonably dangerous to the user.” New Hampshire employs a “risk-utility approach,” which asks whether the danger’s magnitude outweighs the product’s utility. Increasing a drug’s “usefulness” or reducing its “risk of danger” would require redesigning the drug, but redesign is not possible because the FDCA requires a generic drug to have the same active ingredients, route of administration, dosage form, strength and labeling as its brand-name equivalent. Therefore, Mutual could have ameliorated sulindac’s “risk-utility” profile only by strengthening its warnings, but that too is prohibited under federal law.

Justice Alito, writing for the majority, rejected the 1st Circuit’s “stop-selling” rationale – that Mutual should simply have pulled sulindac from the market in order to comply with both state and federal law – explaining that that approach would effectively revoke the Court’s pre-emption doctrine. Justice Alito further explained that adopting the 1st Circuit’s stop-selling rationale would mean that “the vast majority – if not all – of the [pre-emption] cases in which the Court has found impossibility” were decided wrongly. However, Judge Alito acknowledged that “the Court would welcome Congress’ ‘explicit’ resolution of the difficult pre-emption questions that arise in the prescription drug context,” because presently the FDCA includes neither an express pre-emption clause nor a non-pre-emption clause for prescription drugs.

Justice Breyer, in dissent, argued that it “is not literally impossible here … to comply with conflicting state and federal law,” because a company can either not do business or pay the state penalty, e.g., damages, and either action would not “undercut the purposes of the federal statutory scheme”.

Justice Sotomayor, in a separate dissent, argued that the majority ignored the presumption against pre-emption, and that federal drug law and state common-law liability have long operated in tandem to promote consumer safety. Justice Sotomayor concluded that “New Hampshire’s design-defect law did not require Mutual to do anything other than to compensate consumers who were injured by an unreasonably dangerous drug.” Justice Sotomayor cautioned that as a result of the Court’s decision, seriously injured consumers are left without any remedy.

The question now becomes whether Congress will enact legislation to modify the impact of the Mutual decision on consumers who are seriously injured as a result of taking generic medications. For example, Congress could provide that the FDCA does not pre-empt state design-defect law or provide a no-fault federal compensatory program, similar to the National Childhood Vaccine Injury Act, 42 U.S.C. §300aa-1, et seq. (see where an excise tax on vaccines is used to compensate individuals injured or killed by vaccine side effects. Alternatively, the Food and Drug Administration (the FDA) may consider revisions to its labeling regulations to enable generic drug manufacturers to change labels of approved drug products.

On June 24, 2013, the same day that the Court issued its decision in Mutual, Congressmen Chris Van Hollen, Bruce Braley, Henry Waxman and Matt Cartwright, and Senators Patrick Leahy, Tom Harkin and Al Franken wrote to FDA Commissioner Margaret Hamburg urging the FDA “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.”

It remains to be seen what action, if any, will be taken by the FDA and/or Congress. However, for the time being, generic drug companies may take comfort in the Mutual holding, as the scope of the Court’s ruling offers broad protection against a design-defect claim with respect to their generic drugs.



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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