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June 25, 2013

Court Rejects "Take it Off the Market" Design Defect Claims Against Generics

By Susan E. Burnett
Partner, Austin

In a 5-4 decision authored by Justice Alito, the Supreme Court today handed generic drug companies a significant victory by foreclosing the plaintiffs' bar from circumventing Mensing via ill-conceived design defect claims.  The court's decision, in Mutual Pharmaceutical Co. Inc. v. Bartlett, may also help brand drug companies defeat such claims – which can mean defeating liability altogether when the plaintiff cannot establish failure-to-warn for whatever reason.

Strict, Not Absolute, Liability

The Court began by rejecting out-of-hand the argument that New Hampshire's product liability law was merely "compensatory," not "regulatory" and thereby imposed no substantive duties on drug manufacturers except to pay for all injuries caused by their drugs.  The majority correctly identified the flaw in this argument.  Strict liability may not depend on negligence, but it does not constitute absolute liability, whereby the product maker is obligated to compensate anyone hurt by the product.  That is the law not only in New Hampshire, but in most, if not all, states. In a footnote, the Court saved for another day whether a "compensatory" system of absolute liability would survive an impossibility preemption challenge.

Design Defect Devolves into Failure-to-Warn

Recall that in Mensing, the court held that federal law, which requires generic drug companies to provide the same label that accompanies the brand-name drug, preempts state-law failure-to-warn claims that implicitly would require the generic company to provide a different, "better" warning.  But what about claims that the drug was defectively designed, regardless of its warnings?  The plaintiffs' bar seized on this route around Mensing as a means of salvaging some kind of tort claim against generic drug companies, which, of course, supply the majority of drugs prescribed in the United States.

The plaintiff in Bartlett certainly had a sympathetic case to salvage.  She developed a devastating allergic skin reaction – toxic epidermal necrolysis – after using generic sulindac, a non-steroidal anti-inflammatory drug (NSAID) for shoulder pain.  According to her brief in the Supreme Court, 60-65% of Bartlett's body became an open wound, injuries which her primary care physician described as "like a horror movie."  Bartlett was left scarred, disabled and nearly blind.

But these admittedly tragic circumstances did not prevent the majority from reaching the right, and logical result.  The Court began by acknowledging what should be obvious: most drugs are not like ladders or cars, capable of being redesigned to be safer.  "Redesigning" a drug by changing its chemical composition turns it into another drug altogether, requiring a new NDA.  Thus in most drug cases (i.e. those in which the active ingredient is alleged to have caused the harm), it is not possible to "redesign" the drug to avoid that harm. 

Significantly, this conclusion applies equally to brand and generic drugs.  But of course there is a second reason why generic drug companies cannot redesign their products – federal law requires their products to have the same active ingredients, route of administration, dosage form, strength, and labeling as the brand-name drug.

Since redesign was not an option, the Court concluded that the only way the generic drug company could have made its product safer was to strengthen the warnings.  And such a failure-to-warn claim against a generic drug company is flatly barred by Mensing.

The "Stop Selling" Argument Doesn't Defeat Impossibility Preemption

If the drug cannot be redesigned, and the generic company cannot change the drug's warnings without running afoul of federal law, what is left?  The plaintiff argued that the generic company could always take the drug off the market.  But that argument, the majority pointed out, would have applied equally in Mensing: if federal law prohibited the generic drug company from selling its product with a different label, the company could have stopped selling the drug altogether.  An actor facing incompatible duties under federal and state law can always "comply" with both by ceasing acting altogether.  As the majority observed, "if the option of ceasing to act defeated a claim of impossibility, impossibility pre-emption would be 'all but meaningless.'"

Do Any Claims Against Generic Drug Companies Survive?

  • Misbranding

In footnote 4, the Court left open the possibility of a design defect claims "that parallel[s] the federal misbranding statute."  It observed that the parties and the Government agreed that such a claim would have to be premised on "new and scientifically significant information that was not before the FDA."  Misbranding, the Court went on, was "not applicable, " because "the jury was not asked to find whether new evidence concerning sulindac that had not been made available to the FDA rendered sulindac so dangerous as to be misbranded[.]"

This discussion seems to imply that it would be appropriate for the jury to answer such a question, were there some evidence of "new" information "that had not been made available to the FDA."  But that sounds suspiciously akin to the fraud-on-the-FDA claim rejected by the Court in Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001) (claim that medical device company misled the FDA about device's indications for use held preempted).  We can expect further litigation on this point, as plaintiffs scramble to come up with some data they can call "new" and argue was not properly presented by the company to the FDA.

  • Failure to Update Label

Some courts have recognized claims against generic drug companies based on a delay in updating their labels to match changes in the brand-name drug company's label.  See, e.g., Fulgenzi v. Pliva, Inc., No. 1-3504 (6th Cir., March 13, 2013).  Such claims face significant hurdles in terms of proving causation, but would appear to survive post-Bartlett.

We would be happy to answer any questions you have about the Supreme Court's Bartlett decision and its potential impact.