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June 2011

Supreme Court rules makers of generic drugs cannot be sued for failure to warn

Generic drug makers not liable for warnings

Today, in a 5-4 decision split along ideological lines, the Supreme Court reversed the 5th and 8th Circuits, and held that federal law pre-empts failure-to-warn claims against generic manufacturers. The Court held that the federal statutes and regulations that require generic manufacturers to use the same labeling as the brand-name drug counterparts make it impossible for generic manufacturers to simultaneously comply both with federal law and a state tort law duty to use a different label.

The majority and the dissent agreed that the Changes Being Effected ("CBE") process by which a manufacturer can unilaterally strengthen a warning subject to later review by the FDA is not available to generic manufacturers. (The majority distinguished Wyeth v. Levine because a brand manufacturer can use the CBE process.) It further agreed that a generic manufacturer cannot unilaterally issue "Dear Doctor" letters with new warnings. Where the majority and dissent parted company was over what was termed at oral argument the "take steps" theory - i.e., to prove impossibility, must the generic manufacturer show that the FDA would have said "no" had the manufacturer taken steps to ask for a label change? The majority assumed, without deciding, that federal law imposes a duty on generic manufacturers to ask for label change if they become aware of new safety information that should be in the label. Even so, it held that this duty did not change the conflict preemption analysis. According to the majority, the proper inquiry is whether "a private party could independently do under federal law what state law requires of it." If the mere possibility that the federal government might do something that would allow a party to comply both with state and federal law were enough to defeat conflict preemption, there effectively would be no conflict preemption, as one always can ask for such action.

The dissent, authored by Justice Sotomayor, asserted that the majority has changed the conflict preemption analysis by inserting the word "independently" in the test, without precedential support. According to the dissent, because avenues existed by which the generic manufacturers could have tried to change their labels, even though they required consent and agreement by the brand manufacturers and the FDA, impossibility did not exist. The dissent accused the majority of stripping consumers of their ability to pursue legal redress when injured by a generic version of a drug, while leaving intact that ability for those who use a branded version.

Obviously, this decision will have a huge impact on drug litigation; the dissent claims that it will impact 75% of all prescription drugs dispensed in this country. Plaintiffs may still try to bring design defect claims against generic manufacturers, especially if a drug is no longer on the market, but those claims are not viable in all states and are difficult to prove. It is possible that today's decision will prompt action by Congress to restore plaintiffs' ability to sue generic manufacturers for failure to warn.