Supreme Court Once Again Rules in Favor of Generic Drugmakers

By Patricia L. Zlaket, CaseyGerry – Published 7/19/13 in the Daily Journal

Unfortunately for millions of consumers, the legal battles related to labeling for generic drugs rage on.

In 2011, the U.S. Supreme Court decision in [PLIVA, Inc., et al. v. Mensing] gave more power to drug companies — ruling that generic makers cannot be held responsible for failure to warn about a drug’s side-effects, since the generic maker is only making a “copy” of the brand drug and must follow the brand name’s label.

Despite the fact that generics increasingly dominate the drug market, this decision largely took those manufacturers off the hook when it comes to warnings, and may prevent a consumer from bringing a lawsuit against a generic manufacturer.

In an equally controversial ruling last month, [Mutual Pharmaceutical v. Bartlett], the U.S. Supreme Court once again gave generic drug companies an edge — further shielding generic drug manufacturers from liability for design-defect claims.

In [Mutual Pharmaceutical], the Supreme Court ruled that the state consumer-protection law under which Bartlett sued was invalid because it conflicted with federal law. Since generic drug manufacturers legally must use the same ingredients and warning labels as name-brand manufacturers, design-defect claims which hinge on the adequacy of a warning label are preempted by federal law.

The 5-4 decision reversed a $21 million jury verdict in favor of Karen Bartlett, who suffers from Stevens-Johnson syndrome as the result of taking the generic Sulindac, an anti-inflammatory medication she used to treat shoulder pain. The rare and life-threatening skin condition has rendered Bartlett legally blind and caused over 60 percent of her skin to burn off. Now severely disfigured, she spent months in a coma, a year being tube fed, had 12 eye surgeries, numerous cornea implants, and now has trouble walking as far as out to her own mailbox.

Bartlett sued Sulindac’s manufacturer, Mutual Pharmaceutical, in New Hampshire Superior Court, asserting both design-defect and failure-to-warn claims. Her failure-to-warn claim was dismissed at the trial court level, but the jury awarded her $21 million in damages on her design defect claim.

Mutual appealed the verdict, maintaining that it was in conflict with federal law.

The Supreme Court agreed — determining that federal law pre-empts state law — and overturned the original ruling. The court majority said the Food and Drug Administration had approved this drug, and that federal approval supersedes state laws.

According to the majority decision, “because it is impossible for Mutual and other similarly situated manufacturers to comply with both state and federal law, New Hampshire’s warning-based design-defect cause of action is pre-empted with respect to FDA-approved drugs sold in interstate commerce.”

Though Bartlett’s claim was based on a design-defect theory, the court focused on the adequacy of the warning label. The reasoning for the decision mirrored the reasoning used in [PLIVA]—leavingBartlett with not only permanent injuries, but ultimately no recourse.

The implications of both the [PLIVA] and [Mutual Pharmaceutical] rulings for consumers are huge, as generics now represent nearly 80 percent of all filled prescriptions. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies — billions more are saved when hospitals use generics.

Not surprisingly, the ruling has evoked a backlash of criticism. “It has been two years since the Supreme Court granted generic drug companies immunity for their drugs’ warning labels in [PLIVA v. Mensing], and the Supreme Court has expanded that immunity,” said American Association for Justice President Mary Alice McLarty in a press release. “It is time for the FDA to address the huge disparity between generic and brand drug makers’ responsibility.”

Members of Congress have gotten involved, too. Sens Patrick Leahy and Mary Landrieu have sent letters to the FDA, calling on the agency to address generic drug accountability. “Like the [PLIVA v. Mensing]case, this decision creates a troubling inconsistency in the law that penalizes the millions of Americans who take generic medications,” said Leahy in a press release. “A consumer should not have her rights foreclosed simply because she takes the generic version of a prescription drug.”

Added McLarty, “I know of no other industry where the maker of a product has such limited responsibility for the safety of the product they make. Over eighty percent of drugs dispensed are generic; the manufacturers must be held responsible for their drugs’ harmful effects.”

Interestingly, the justices’ expressed sympathy for Bartlett, whose injuries are detailed in the court’s majority and minority opinions. “The dreadful injuries from which products liabilities cases arise often engender passionate responses,” Justice Samuel Alito wrote. “Today is no exception, as Justice Sotomayor’s dissent illustrates.”

The “situation is tragic and evokes deep sympathy, but a straightforward application of preemption law requires that the judgment be reversed,” Alito wrote.  Dissenter Justice Sonia Sotomayor said that “the court has left a seriously injured consumer without any remedy despite Congress’ explicit efforts to preserve state common-law liability.”

Ironically, if Bartlett had been taking Sulindac’s brand name counterpart — Clinoril — she could have sued and won.

A manufacturer seeking federal approval to market a new drug must prove it is safe and effective, and the proposed label must be accurate and adequate. But the rules for generic drugs differ. In 1984, Congress enacted the Hatch-Waxman Amendments, which allow a generic drug manufacturer to gain FDA approval simply by showing that its drug is equivalent to an already-approved brand-name drug, and that the safety and efficacy labeling proposed for its drug is the same as that approved for the brand-name drug.

The Supreme Court ruled in 2009 that people injured by a brand-name drug can sue the drug maker for damages. But now — thanks to the [PLIVA] and [Mutual Pharmaceutical]rulings — the same is not true for those who take a generic drug.

Many potential hazards are not discovered until years after drugs have been on the market, yet currently generic drug manufacturers can do little to warn doctors and patients about newly discovered information, putting patients at risk.

In a positive move, the FDA recently announced a plan to issue a proposed rule to revise FDA regulations about prescription drug labeling. Yet until the FDA actually changes the rules and regulations surrounding generic drug manufacturers’ responsibilities — and their liability — consumers will continue to pay a steep price.

Karen Bartlett, and others like her, will be left with lifelong permanent injuries, and even though a jury or court may validate the claim, federal law will forever have the final word. The time has come for the laws to be more consistent with reality and fairness.

Patricia L. Zlaket is an associate attorney with San Diego-based Casey Gerry Schenk Francavilla Blatt & Penfield LLP and a member of its pharmaceutical and medical device litigation practice team.