Immunity for generic drug manufacturers

Gabriel tells his story

When Gabriel Drapos was a first-year student at Harvard, he was diagnosed with an autoimmune disease that would ultimately take countless drug therapies, several invasive spinal column procedures, and three surgeries to manage.

He later found out that his disease was likely connected to a drug he had taken:

Personal pain becomes a social injustice in the presence of unconscionable ethics. I discovered there was likely a connection between my disease and a drug I had taken in high school. Allegedly, I should say. I’ll never get my day in court to prove it.

Gabriel had taken a generic form of the drug. And because of a recent Supreme Court decision protecting generic drug manufacturers from being sued in court when their labels don't warn consumers of health risks, he'll never get a chance to stand up for his rights in court and hold the drug company responsible.

Gabriel's story is featured in AFJ's latest documentary film,"Unequal Justice: the Relentless Rise of the 1% Court."

“Unequal Justice” explores the growing pro-corporate bias in key Court decisions and their real-world impact on ordinary Americans. The film looks at three cases – Citizens United v. FEC, PLIVA v. Mensing, and Wal-Mart v. Dukes – to show how the law has been distorted to create advantages for corporations within our democratic system, restrict access to the courts, and prevent ordinary people from banding together to fight corporate misbehavior.

For Gabriel, it was PLIVA v. Mensing that ensured he wouldn’t be able to stand up for his rights in court. In PLIVA, the Supreme Court shielded generic drug manufacturers from state tort liability when their labels inadequately warn consumers of health risks. Absurdly, brand name drug manufacturers can be held liable for that very failure. But generic drugs make up 75 percent of the prescription drug market, and millions of Americans take the generic versions of prescription drugs, often because insurance companies require that prescriptions be filled with generics.

Without the risk of legal liability, generic drug manufacturers have little incentive to ensure that their warning labels are accurate. And when people like Gabriel are harmed by a generic drug, they have no legal remedy.

“Unequal Justice” will be released this fall. You can learn more and sign up to host a screening of the film at www.unequaljustice.org.

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First Circuit says PLIVA v. Mensing Does Not Apply to Design Defect Claims

On Wednesday, the Court of Appeals for the First Circuit upheld a $21 million verdict awarded to a woman who suffered grievous injuries as a result of taking a generic pain medication prescribed by her doctor. In its appeal to the First Circuit, the generic drug manufacturer, Mutual Pharmaceutical Company, argued that the design defect claims were preempted by the Hatch-Waxman Amendments to the Federal, Drug, and Cosmestic Act (“FDCA”) under the Supreme Court’s 2011 decision PLIVA v. Mensing.

In its opinion rejecting that argument, the First Circuit noted that the Supreme Court’s reasoning in Wyeth v. Levine (2009) -- in which the Court held that failure-to-warn claims against a brand name drug manufacturer were not preempted by the FDCA -- applies equally to design defect claims. The First Circuit acknowledged that PLIVA carved an exception out of Wyeth for failure-to-warn claims against generic drug manufacturers, but the First Circuit declined to apply that exception to the plaintiff’s design defect claims. The court concluded that while a generic drug manufacturer could not choose to alter the chemical composition of the drug under the FDCA, it could simply decide not to make the drug at all due to the risks involved. Therefore, PLIVA – in which the Supreme Court found that the generic drug manufacturer could not change FDA-approved labels of its own accord and thus could not be held liable under state law for failing to change warning labels -- was not controlling.

The First Circuit concluded that the Supreme Court “adopted a general no-preemption rule in Wyeth and … it is up to the Supreme Court to decide whether PLIVA’s exception is to be enlarged to include design defect claims.” Noting the existence of a circuit split and the widespread use of generic drugs, the First Circuit suggested that the Supreme Court needs to resolve this issue.

The First Circuit’s opinion underscores that, through its opinions in Wyeth and PLIVA, the Supreme Court has created an inconsistent and unfair legal regime in which a plaintiff’s ability to recover for injuries depends in large part on whether she was given the generic or brand name version of a drug. In response to this injustice, Sen. Leahy (D-VT) recently introduced legislation that would amend the FDCA to allow generic drug manufacturers to change their labeling to warn consumers of newly discovered risks. AFJ and several of its member organizations submitted a letter in support of the legislation. This issue is of particular importance since generics account for more than 75% of drugs prescribed in the United States.

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The Aftermath of Corporate Court’s Generic Drug Ruling

In PLIVA, Inc. v. Mensing, decided last term, the Supreme Court ruled that a generic-drug manufacturer cannot be held liable in state court for failing to inform the FDA that its label inadequately warns consumers of health risks. As Justice Sotomayor wrote in dissent, the majority’s holding in PLIVA created disparate liability schemes for brand name and generic drugs leading to “absurd consequences.”

AFJ and others noted at the time that the 5-4 ruling was likely to have wide-reaching effects, since generic drugs make up 75-80 percent of the prescription drug market.

Yesterday, the New York Times documented how extensive those effects have been already, including the dismissal of scores of suits by individuals who have suffered grievous physical injury as a result of inadequate warnings. The article also highlights that Congress or the FDA could rectify the Corporate Court’s mistake, but there is little sign that either will do so any time soon.

Now, what once seemed like a trivial detail — whether to take a generic or brand-name drug — has become the deciding factor in whether a patient can seek legal recourse from a drug company. The cases range from that of Ms. Schork, who wasn’t told which type of drug she had been given when she visited the hospital, to people like Camille Baruch, who developed a gastrointestinal disease after taking a generic form of the drug Accutane, as required by her health care plan.

“Your pharmacists aren’t telling you, hey, when we fill this with your generic, you are giving up all of your legal remedies,” said Michael Johnson, a lawyer who represented Gladys Mensing, one of the patients who sued generic drug companies in last year’s Supreme Court case, Pliva v. Mensing. “You have a disparate impact between one class of people and another.”

The Supreme Court ruling affects potentially millions of people: nearly 80 percent of prescriptions in the United States are filled by a generic, and most states permit pharmacists to dispense a generic in place of a brand name. More than 40 judges have dismissed cases against generic manufacturers since the Supreme Court ruled last June, including some who dismissed dozens of cases consolidated under one judge.

Public Citizen, a consumer advocacy group, has petitioned the Food and Drug Administration to give generic companies greater control over their labels, a rule change that could allow users of generic drugs to sue, but the agency said earlier this month that it needed more time to decide. “Congress can make this problem go away, and the F.D.A. could, too,” said Allison Zieve, the director of Public Citizen Litigation Group. “But we haven’t seen signs that either of them is paying much attention.” A spokeswoman for the F.D.A. declined to comment.
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In a statement last week, Representative Henry A. Waxman, Democrat of California, who co-wrote the Hatch-Waxman Act, said he was exploring ways to address the issue, either through legislation or a rule change.

Mr. Waxman argued in a brief opposing the generic companies in the Supreme Court case last year that Congress had never intended for generic companies to be freed of all responsibility. “Congress did not intend for consumers’ rights to be categorically eliminated simply because they purchased a generic rather than a brand-name drug,” he wrote.

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Worst Decisions, #6: PLIVA v. Mensing

AFJ is counting down the 10 worst decisions of the Corporate Court's 2010-11 term. Yesterday, at #7, we talked about Ashcroft v. Al-Kidd, which protected the unfair tactics used to detain an American citizen.

Worst Decisions of the 2010-11 Corporate Court Term: #6 PLIVA v. Mensing
Giving Generic Drug Makers a Free Pass to Withhold Information About Drug Safety

In PLIVA, Inc., the Court’s 5-4 conservative majority immunized generic drug manufacturers, whose drugs comprise 75 percent of the market, from state tort liability when they fail to inform the Federal Drug Administration (FDA) that their labels inadequately warn consumers of health risks.

Brand-name drug manufacturers have the ability and the duty to change label warnings based on newly-discovered risks without consulting the FDA, but generic drug manufacturers need only copy brand-name warnings. To enhance drug safety, the FDA took the position that generic-drug makers must inform the agency when its warning labels, copied from the brand-name label, do not account for newly discovered risks. Often generic manufacturers will know of such risks because more people take generic drugs and because they come on the market later than brand-name drugs, which offers more time to assess side effects. In this case, the risks stemmed from taking Reglan, a drug that caused a severe and irreversible neurological disorder as a side effect in a growing number of patients.

The majority concluded that it was impossible for generic-drug makers to meet both the federal requirement that they copy brand-name labels, and state law duties to provide adequate warnings, and therefore gave no effect to FDA’s position that the generic drug makers should have taken steps to warn the agency of the problems with Reglan. The majority acknowledged that, from the perspective of plaintiffs, its ruling “makes little sense.”

In the dissent’s view, the generic-drug makers should not have been permitted to claim “impossibility” because they never even attempted to warn the FDA that the newly-discovered risks of Reglan were not included in the brand-name or generic warning labels for the drug. It is implausible that the FDA would not have asked the brand-name manufacturer, and by extension the generic makers, to change labels if the defendants had warned the agency of adverse effects. It is equally implausible that Congress intended to protect only consumers of brand-name drugs while leaving users of generic drugs without recourse.

In a cruel twist, the plaintiffs received the generic version of Reglan only because their pharmacist substituted it for the brand-name drug their doctors prescribed. Had they received the brand-name version, they would have at least been able to sue because of the greater duties of brand-name drug manufacturers. Instead, the Corporate Court’s decision leaves them with no remedy.

PLIVA v. Mensing is number six on the Worst Decisions of the 2010-11 Corporate Court term because it gives generic-drug manufacturers a free pass to sit back and do nothing when their warning labels are dangerously inadequate.

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Corporate Court Protects Drug Manufacturers That Fail to Warn Consumers of Health Risks

Today the Supreme Court’s conservative majority held in PLIVA v. Mensing that a generic-drug manufacturer cannot be held liable in state court for failing to inform the FDA that its label inadequately warns consumers of health risks. Generic drugs currently make up 75 percent of the prescription drug market.

Gladys Mensing sued PLIVA for failure to warn and misrepresentation in state court after a generic drug that PLIVA manufactured caused her to develop a severe and irreversible neurological movement disorder. Mensing claimed that PLIVA failed to take steps to change the label warnings despite mounting evidence that the drug carried a far greater risk of the disorder than initially indicated.

PLIVA argued that the Hatch-Waxman Amendments, the governing federal law, impliedly preempts Mensing's state claims. PLIVA claimed that simultaneous adherence to state and federal law is impossible because federal law requires generic labels to be identical to labels approved for the name brand. As a result, PLIVA stated that unilaterally strengthening the warning on the generic label to avoid state law liability would violate federal law requiring identical labels.

Mensing responded that state law claims against a generic drug manufacturer should not be preempted because the manufacturer could have proposed a label change for FDA to approve without making a unilateral change. In addition, Mensing argued, the Hatch-Waxman Amendments must be read with other FDA statutes that are meant to ensure that drugs are safe for consumer use.

The Court sided with PLIVA and held that a generic drug manufacturer may escape state tort liability even if the manufacturer refused to contact the FDA about newly discovered health risks. The opinion stated that, because the FDA must first approve a change to a label, the manufacturers “cannot independently satisfy those state duties for preemption purposes” while adhering to federal law. As a result, the Court stated, the Supremacy Clause requires that the Hatch-Waxman Amendments preempt victims of inadequate generic-drug warning labels from seeking compensation for injuries in state court. The Court previously held in Wyeth v. Levine (2009) that lawsuits against manufacturers of brand-name drugs for inadequate warnings were not preempted by federal law and could go forward. The Court held in Wyeth that FDA regulations allowed brand-name drug manufacturers to make unilateral changes to their labels to strengthen safety warnings and satisfy their state tort law duties.

Justice Sotomayor’s dissent stated that the Court “invents new principles of pre-emption law out of thin air to justify its dilution of the impossibility standard.” The dissent also called the majority’s new theory of the Supremacy Clause a “direct assault” on precedent stating that a federal preemption defense requires a “strong showing of a conflict to overcome the presumption that state and local regulation can constitutionally coexist with federal regulation.” The dissent reiterated that generic manufacturers have a duty under federal law to monitor the safety of their products and a mechanism for proposing a label change when such a change is necessary. A generic manufacturer, Justice Sotomayor wrote, should “usually be unable to sustain their burden of showing impossibility if they have not even attempted to employ that mechanism.”

The dissent also identified three “absurd consequences” that will result from the Court’s decision. First, generic drug consumers will have no access to compensation when they are injured by inadequate warnings. This creates an “arbitrary distinction” between brand-name and generic-drug consumers that Congress did not intend to create. As a result of this decision and the 2009 Wyeth decision, the majority concedes that a consumer’s ability to seek compensation for injuries depends on whether a pharmacist fills a prescription with the brand-name or generic version of a drug. Many states allow pharmacists to unilaterally make such substitutions. Second, generic-drug manufacturers will no longer have the same state-law incentives to monitor and disclose safety risks that brand-name manufacturers have. As the dissent observed, “brand-name manufacturers often leave the market once generic versions are available, meaning that there will be no manufacturers subject to failure-to-warn liability.” Third, the decision undercuts the goals of the Hatch-Waxman Amendments to increase the consumption of less expensive generic drugs. Doctors will be more hesitant to prescribe generic drugs and patients will be less likely to take them because generic-drug manufacturers will now face weaker safety incentives.

As a result of this decision, individuals harmed by inadequate warnings on generic-drug labels will be unable to seek compensation for their injuries in state court even if the manufacturer fails to abide by its legal obligation to inform the FDA of newly discovered health risks.

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Consumers’ Ability to Hold Drug Companies Accountable for Inadequate Warnings at Stake in Supreme Court

The Supreme Court will hear oral arguments today in the consolidated cases of PLIVA v. Mensing, Actavis Elizabeth, L.L.C. v. Mensing, and Actavis, Inc. v. Demahy. At stake is the ability of consumers to keep pharmaceutical companies honest about the potential danger their drugs pose. The Court must decide whether Hatch-Waxman Amendment provisions governing the labeling of generic prescription drugs preclude state claims against a pharmaceutical company for failing to adequately warn consumers about health risks.

Gladys Mensing sued PLIVA for failure to warn and misrepresentation in state court after a generic drug that PLIVA manufactured caused her to develop a severe and irreversible neurological movement disorder. Mensing claims that PLIVA failed to take steps to change the label warnings despite mounting evidence that the drug carried a far greater risk of the disorder than initially indicated.

PLIVA argues that federal law impliedly preempts Mensing's state claims. PLIVA claims that simultaneous adherence to state and federal law is impossible because federal law requires generic labels to be identical to labels approved for the name brand. As a result, PLIVA states that unilaterally strengthening the warning on the generic label to avoid state law liability would violate federal law. PLIVA also argues that state claims thwart the goal of the federal Hatch-Waxman Amendments to bring low cost generic drugs to market quickly.

Mensing argues that state law claims against a generic drug manufacturer are not preempted because the manufacturer could have proposed a label change for FDA to approve without making a unilateral change. In addition, the Hatch-Waxman Amendments must be read with other FDA statutes that are meant to ensure that drugs are safe for consumer use.

If the Supreme Court sides with drug companies, makers of generic pharmaceuticals will have less of an incentive to produce up-to-date label warnings for consumers.

Update (3/31): The New York Times reports on arguments in the case.

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