March 13, 2013

High Court to Hear Argument on Whether Injured Patients Can Hold Generic Drug Makers Accountable for Their Defective Drugs

By Jason Enzler

Next Tuesday the Supreme Court is scheduled to hear oral argument on Mutual Pharmaceutical’s appeal of a $21 million jury award for serious injuries caused by one of its generic drugs.  Much more is at stake than the money, however, with many expecting the Justices to set out a broad rule on whether any patient can sue a generic drug maker for defects in the design of its drug.

The underlying facts of the case are horrific.  Karen Bartlett, a healthy 45-year old, visited her doctor in 2004 to treat a pain in her shoulder.  Her doctor prescribed the anti-inflammatory drug Clinoril, made by Merck.  As so many of us do to cut ever-rising medical costs, Ms. Bartlett  bought a generic version of the drug, sulindac, made by Mutual.  Within two weeks, red spots began appearing on her face and her eyes became irritated.  Soon after, Ms. Bartlett was admitted to a hospital and she was diagnosed with Stevens-Johnson Syndrome and Toxic Epideral Necrolysis, potentially fatal skin diseases.  The rash rapidly grew worse until it ended up burning off roughly two-thirds of her skin.  She spent months in the hospital, including a burn unit, as well as several months in a coma.  Ms. Bartlett has endured 13 eye operations, yet remains legally blind.  Her internal organs are permanently damaged since the rash did not spare them either, burning her throat, stomach, and lungs.

In 2010, a jury awarded Ms. Bartlett $21 million in her lawsuit against Mutual, finding the drug defective.  The award was upheld in a decision issued by the First Circuit Court of Appeals in 2012.  Among other things, the Court of Appeals rejected Mutual’s argument that state law claims of a drug’s design defect are preempted by federal law, here the Federal Food, Drug, and Cosmetic Act (FDCA).  In doing so, the Court of Appeals distinguished  a Supreme Court case decided two years ago, PLIVA, Inc. v. Mensing, and on which Mutual principally relied.  The Supreme Court there held that generic drug manufacturers could not be held liable for claims based on failures to warn of drugs’ dangers.  It reasoned that such claims are preempted by federal law because under the FDCA, generic drug manufacturers are not permitted to unilaterally alter the warnings on the packaging inserts and labels of their drugs.  That is up to the brand-name manufactures of the drugs which the generics are copying.

The Supreme Court in PLIVA consequently diagnosed the case as an example of “impossibility” preemption because otherwise, state law would require generic manufacturers to beef-up warnings even though federal law prohibits such alternations.  Mutual argued that this rationale applied equally to its case since, like drug labels, the compositions of generic drugs must also match the compositions of their brand-name versions under federal law.  They may not alter their designs.  The Court of Appeals recognized this argument had “some force,” but rejected it, relying on a general rule against finding implied preemption and the fact that generic drug makers could “choose not to make the drug at all.”  Significantly, the Court of Appeals noted the tension of its decision with the rationale of PLIVA and called on the Supreme Court to weigh in, writing that “this issue needs a decisive answer from the only court that can supply it.”

Last November, the Supreme Court agreed to take the appeal.  Since then, others have chimed in on the issue.  The United States, several pharmaceutical companies and associations, the U.S. Chamber of Commerce, and policy-driven think tanks have filed briefs supporting a finding of preemption.  Patients harmed by other drugs, Senator Tom Harkin (D-IA) and Representative Henry Waxman (D-CA), former FDA Commissioners, the Council of State Governments, policy-driven interest groups, and law professors have filed briefs supporting claims by injured drug patients.

As expected, the arguments tend to center around the applicability of PLIVA.  They have also argued whether the purposes of the FDCA would be undermined depending on the Court’s decision.  The pro-pharma camp contends that the policies underlying the requirements that generics match brand-name drugs in both composition and in labeling would be in danger if the Court upheld the First Circuit.  Those requirements were added to the FDCA by what is known as the Hatch-Waxman Amendments of 1984, which were intended to streamline the process of approving generics for sale, thereby increasing their availability and significantly cutting overall healthcare costs.  But if the decision is upheld, many fear that manufacturers will stop making generic drugs – a serious concern given that consumers clearly have come to enjoy their benefits (when Hatch-Waxman was enacted, about  19% of the country’s drugs were generic; roughly 75% of all prescriptions currently are filled with generics).  The pro-patient group counters that the FDCA was intended to protect consumers, and that the Hatch-Waxman Amendments were passed to allow for consumers to enjoy cheap but safe drugs.  Finding that patients could not hold generic drug makers accountable thus would essentially eviscerate the very purposes of the FDCA and the Hatch-Waxman Amendments.

Oddly enough, the pro-pharma group’s use of PLIVA may backfire even if they are successful next Tuesday.  The Alabama Supreme Court recently allowed injured patients to sue Pfizer, owner of the brand-name acid-reflux drug Reglan, for inadequate warnings accompanying the generic versions made by other pharmaceutical companies.  The Alabama Supreme Court’s ruling made much hay out of PLIVA, reasoning that it is the brand-name drug maker that drafts the warnings and that such manufacturers should reasonably foresee that healthcare providers would rely on those warnings, even in cases involving generic drug consumption.  It is not too much of a stretch to imagine that, should Mutual get off, then plaintiffs would go after Merck, the designer of Clinoril, arguing that the drug designer should have known that patients would rely on the design as exactly replicated in generic versions.

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