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Liability of the Generic Manufacturers
American Association for Justice
AAJ Topamax Teleseminar
April 6, 2011
2:00 pm – 3:30 pm EDT
William B. Curtis
Javier Gonzalez
Curtis Law Group
3100 Monticello Avenue, Suite 500
Dallas, Texas 75205
214.890.1000
214.890.1010 (fax)
Introduction
Late last year the Supreme Court of the United States granted certiorari in two (2) consolidated generic pharmaceutical product liability cases to answer the question of whether state tort personal injury claims by individuals against generic pharmaceutical manufacturers are preempted by federal laws and/or regulations. See Demahy v. Actavis, Inc., certiorari granted No. 09-1501, and Mensing v. Wyeth, Inc., certiorari granted Nos. 09-993 and 09-1039 (the consolidated cases before the Supreme Court are hereinafter referred to as “Mensing”). To understand how we have arrived at the point where the Supreme Court is going to ultimately decide the issue of generic pharmaceutical manufacturer liability, an exploration of past decisions in the context of generic pharmaceutical liability is worthwhile and necessary. Foster v. American Home Products Corp.
The U.S. Fourth Circuit Court of Appeals was the first Federal Appellate Court to discuss the obligations of a generic drug manufacturer regarding the labeling of its products. In addressing the issue, the Foster court expressly held that a generic manufacturer cannot satisfy its obligation by simply copying the label for a brand-name drug without ensuring that the information contained therein is adequate and accurate: We do not accept the assertion that a generic manufacturer is not responsible for negligent misrepresentations on its product’s label if it did not initially formulate the warnings and representations itself… [A]s an expert, a manufacturer of generic products is responsible for the accuracy of labels placed on its products. Although generic manufacturers must include the same labeling information as the equivalent name brand drug, they are also permitted to add or strengthen warnings and delete misleading statements on labels, even without prior FDA approval. 21 C.F.R. §314.70 (1993). The statutory scheme governing pre-marketing approval for drugs simply does not evidence Congressional intent to insulate generic drug manufacturers from liability for misrepresentations made regarding their products, or to otherwise alter state products liability law. Manufacturers of generic drugs, like all other manufacturers, are responsible for the representations they make regarding their products. Subsequent to the ruling in Foster, numerous U.S. District Courts applied the same reasoning to cases in which generic drug companies claimed that they were incapable of providing an accurate warning. It would not be until many years later, however, that another Federal Appeals Court weighed in on the issue. 1 The Mensing and Demahy appeals seek reversal of decisions by the United States Eighth Circuit Court of Appeals in Mensing v. Wyeth, Inc., 588 F.3d 603 (8th Cir. 2009), and the United States Fifth Circuit Court of Appeals in Demahy v. Actavis, Inc., 593 F.3d 428 (5th Cir. 2010). 2 29 F.3d 165 (4th Cir. 1994) Liability of the Generic Manufacturers
Wyeth v. Diana Levine
In what is likely the biggest news in pharmaceutical law in the last few years, on March 4, 2009, the U.S. Supreme Court rendered its opinion in the case of Wyeth v. Diana Levine. Wyeth (a brand name manufacturer generally and in this case) claimed that its drug had an FDA approved label, and thus no suit could be brought for a defective label; the U.S. Supreme Court disagreed. The decision put to rest (at least for the time-being) the full-on assault drug-maker defendants had waged against those they have injured based on federal preemption. The heart of Wyeth’s argument in the case, which was echoed in virtually every other failure-to-warn drug case in the country, was that state-law claims such as Ms. Levine’s make it impossible for drug-makers to comply with both state-law duties underlying those claims and federal labeling duties imposed by the Food and Drug Administration (FDA). This irreconcilable conflict, according to Wyeth, meant that injured parties should be prohibited from filing state-law claims based on FDA-approved warnings. The Supreme Court wholly rejected Wyeth’s argument. Ms. Levine lost her arm because Wyeth’s drug Phenergan was incorrectly administered to her through the IV-push method. Ms. Levine sued Wyeth in Vermont state court, claiming that the label on Wyeth’s drug Phenergan did not contain an adequate warning about the risks associated with IV-push administration of the drug. A Vermont jury agreed and awarded Ms. Levine $7,400,000.00 in damages. The Vermont Supreme Court affirmed, and Wyeth then appealed to the U.S. Supreme Court. Wyeth’s arguments on appeal were essentially two-fold. First, Wyeth argued that it would have been impossible to comply with the court-imposed state-law duty to modify the drug’s label without violating federal law. Second, Wyeth claimed that such state action created an obstacle to the purposes and objectives of Congress because it substituted the expert judgment of the FDA with that of a lay jury. In a 6-3 opinion, the Court held that federal law did not preempt Ms. Levine’s failure to warn claims. Addressing Wyeth’s first point, the majority found that a manufacturer can indeed change its labeling to add or strengthen warnings for safety purposes without running afoul of federal regulation. The Court went on to state that “absent clear evidence that the FDA would not have approved a change to Phenergan’s label, we will not conclude that it was impossible for Wyeth to comply with both federal and state requirements.” Wyeth, 129 S.Ct. at 1199. In rejecting Wyeth’s second argument, the Court first pointed out that state law claims do not obstruct Congressional purposes and objectives as set forth in drug labeling regulation because “all evidence of Congress’ purposes is to the contrary.” Id. In the 70-year history of the FDCA, Congress neither provided a federal remedy for those harmed by unsafe drugs nor expressly preempted state-law suits. Id. The Court further rejected Wyeth’s reliance on the preamble to a 2006 FDA regulation which stated that FDA approval of a drug’s label preempted conflicting or contrary state law. Not only were the statements included in violation of rule-making 3 129 S.Ct. 1187 (2009). 4 Justice Stevens delivered the opinion, joined by Kennedy, Souter, Ginsburg and Breyer. Justice Breyer filed a concurring opinion and Justice Thomas filed an opinion concurring in the judgment. Justices Alito, Roberts and Scalia dissented. Liability of the Generic Manufacturers
procedures, the Court said, but also reversed the FDA’s own long-standing position on the issue without explanation. Therefore, the FDA’s position warranted no deference. In sum, the Court preserved an injured consumer’s right to sue a drug company for failure to adequately warn, indicating that “state law offers an additional, and important, layer of consumer protection that complements FDA regulation.” Id. at 1202. Of course, generic drug companies have continued filing motions based on federal preemption in an attempt to create some type of distinction between themselves and brand name manufacturers and unfortunately their would-be distinction will now be decided the Supreme Court. Mensing, Demahy and Beyond
Mensing and Demahy are both Circuit Court cases involving Reglan/metoclopramide (“MCP”). Both were decided in the last two (2) years regarding generic manufacturers’ claims of federal preemption – efforts by the generic drug companies to seek immunity from liability. In both cases the generic manufacturers argued that at the time of first approval of the generic drug, their drugs’ labels had to follow an FDA requirement that they be identical to the brand name label, therefore, state law failure-to-warn tort claims were preempted. In Mensing and Demahy, the Eighth and Fifth Circuit Courts of Appeal, respectively, rejected that argument. Both courts acknowledged that although Levine concerned a brand name manufacturer, the holding in Levine did carry “important implications” regarding the courts’ consideration of preemption in relation to the duties of generic drug manufacturers. Demahy v. Actavis, Inc., 593 F.3d 428, 433 (5th Cir.2010); Mensing v. Wyeth, Inc., 588 F.3d 603, 607 (8th Cir. 2009). Of course, now the Supreme Court will now review and decide the rulings of the Courts of Appeal in Mensing and Demahy.
A.
Mensing

In Mensing, the 8th Circuit echoed the holding of the Foster Court and held that “[t]he regulatory framework makes clear that a generic manufacturer must take steps to warn its customers when it learns it may be marketing an unsafe drug.” Mensing, 588 F.3d at 608. The Court clearly stated that generic manufacturers are subject to 21 C.F.R. §201.57(e)’s requirement that their labeling “shall be revised as soon as there is reasonable evidence of an association of a serious hazard with a drug[.]” Id. 588 F.3d at 609. The court went on to state that the regulation “does not permit generic manufacturers passively to accept the inadequacy of their drug’s label as they market and profit from it.” Id. Finally, in stating its conclusion the Court said, “[i]n sum, we conclude that Mensing has stated a viable claim against the generic metoclopramide manufacturers. Far from prohibiting 5 In essence, the dissent simply finds that there is an irreconcilable conflict between state tort actions and FDA labeling regulations; that the FDA did weigh the risks of IV-push administration and approved the labeling and warnings about that risk; and that the FDA, rather than a lay jury, should be making these cost-benefit balancing functions. 6 Mensing v. Wyeth, Inc., 588 F.3d 603 (8th Cir. 2009) 7 Demahy v. Actavis, Inc., 593 F.3d 428 (5th Cir.2010) Liability of the Generic Manufacturers
them from taking steps to warn their customers of new safety hazards, federal law requires such action.” Id. 588 F.3d at 614.
B. Demahy
When the Mensing Court issued its opinion, the Fifth Circuit had pending before it a case which presented the same issues regarding a generic manufacturer’s responsibilities regarding the labeling of its products. In 2010, the Fifth Circuit joined the Fourth and Eighth Circuits in holding that generic manufacturers have a duty to provide an accurate label in the case of Demahy v. Actavis. In its opinion, the Demahy Court initially notes that the fact that currently 7 out of 10 prescriptions are filled with generic drugs argues strongly in favor of holding a generic manufacturer responsible for the information provided in their labeling. Demahy, at 432. In discussing the responsibilities of a generic drug manufacturer, the Court stated: “[M]anufacturers – name brand and generic alike – must act to warn customers when they learn that they may be marketing an unsafe drug. For their part, generic manufacturers are subject to the requirement that their labeling “be revised… as soon as there is reasonable evidence of an association of a serious hazard with a drug.”” Id. at 437 (citing Wyeth v. Levine, 129 S.Ct. at 1197-98; 21 C.F.R. §201.80(e)). The Demahy court also followed Mensing in finding that generic drug manufacturers had the same recordkeeping and reporting requirements as branded manufacturers. Id. at 437-8 (citing Mensing and 57 Fed. Reg. 17950). The Court went even further to acknowledge that the higher risk associated with long-term use of MCP was noted in the medical literature in the 1980s and 1990s, and that there was nothing to indicate that monitoring such literature would result in significant additional expense to a generic drug manufacturer. Id. at 448.
C. Beyond Mensing & Demahy: the Morris cases ( 6th Cir.) & Gaeta (9th Cir.)
In Morris, the U.S. District Court, Western District of Kentucky, ruled that the plaintiffs’ claims against the generic manufacturers of MCP were preempted by the FDCA and FDA regulation. Morris is currently pending before the Sixth Circuit and the Sixth Circuit invited the FDA to file an amicus curiae brief in the case. The FDA in its brief expressed the opinions that, (1) “a generic pharmaceutical manufacturer, like a brand-name manufacturer, can (and indeed, must) inform FDA of new information about risks that may require a change in the labeling of its drug[;]” (2) “defendants could have asked FDA to coordinate appropriate “[Dear Doctor]” letters or take other action with respect to labeling[;]” (3) “holding a generic pharmaceutical manufacturer liable on a failure-to-warn theory would not unacceptably frustrate 8 Currently pending before the 6th Circuit are three (3) cases: Morris v. Wyeth Inc., et al., Civil Action No. 09-5509 (W.D. KY); Smith v. Wyeth Inc., et al., Civil Action No. 09-5460 (W.D. KY); Wilson v. Pliva Inc., et al., Civil Action Number 09-5466, *(W.D.KY); (collectively referred to as “Morris”). 9 Gaeta v. Perrigo Pharmaceuticals Company, et. al, 630 F.3d 1225 (9th Cir. 2011) 10 Brief for Amicus Curiae U.S. Food and Drug Administration in Morris. Liability of the Generic Manufacturers
the purposes of the Hatch-Waxman Amendments.” Brief for Amicus Curiae U.S. Food and Drug Administration in Morris at *13. Since the time that the Supreme Court decided to hear argument in Mensing, the Ninth Circuit in Gaeta considered the issue of whether state tort claims against a generic pharmaceutical manufacturer were preempted by federal law and FDA regulations. The Ninth Circuit, “join[ed] the Fifth and Eighth Circuits in concluding that, while not dispositive, Levine does foreshadow a similar disposition in,” cases against generic pharmaceutical manufacturers. The Gaeta Court reasoned that “the presumption against preemption” dictated that the Ninth Circuit operate under the assumption “that Congress does not cavalierly pre-empt state-law causes of action.”
D. Mensing Before the Supreme Court of the United States
Oral argument in Mensing was on March 30, 2011 before the Supreme Court of the United States and a decision regarding Mensing will likely be forthcoming by the end of June of this year. While considering whether to grant certiorari in Mensing and Demahy, the Supreme Court invited the United States Solicitor General (“SG”) to submit an amicus curiae brief. The SG’s brief was in some measure in step with the plaintiffs’ arguments and the SG ultimately argued against federal preemption. Despite the United States’ position against federal preemption, the Supreme Court ultimately decided to grant certiorari. Since the Supreme Court decided to hear argument in Mensing, fourteen (14) amicus curiae briefs have been filed in support of the Respondents’ (Plaintiffs’) position that federal 11Gaeta, 630 F.3d at 1230 12 Id. (quoting Levine, 129 S.Ct. at 1995 n. 3, quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)) (internal quotation marks omitted). 13 See Argument Calendars, Session Beginning March 21, 2011, Supreme Court of the United State website: 14 See Guide for Counsel at p. 15, U.S. Supreme Court of the United States website: 15 Brief for the United States as Amicus Curiae in Mensing (writ of cert. pending). Please note, the United States Brief submitted to the Supreme Court prior to certiorari being granted in Mensing and Demahy and the FDA Brief in Morris are, in large measure, similar. In fact, certain sections are identical. However, they differ in that, of course, the facts and procedural history of the underlying cases are different. In addition, they differ in that not all counsel listed on one is listed on the other. The SG submitted a second, additional amicus curiae brief to the Supreme Court after certiorari was granted in Mensing and Demahy again and more emphatically coming down squarely against federal preemption. 16 Brief for the United States in Support of Respondents; Brief for the American Association for Justice in Support of Respondent; Brief for the National Conference of State Legislators in Support of Respondent; Brief for Torts Professors Mary J. Davis, Heidi Li Feldman, Thomas C. Galligan, Jr., Mark P. Gergen, and Jon Hanson in Liability of the Generic Manufacturers
laws and regulations do not preempt state law failure to warn claims against generic pharmaceutical manufacturers far outstripping the number of amicus curiae briefs filed in support of the Petitioners (generic drug company defendants). The United States submitted a second amicus curiae brief again against federal preemption and in support of Respondents (Plaintiffs). Also, noteworthy is the disparate array of sources of amicus curiae briefs in support of Respondents’ (Plaintiffs’) argument against federal preemption in Mensing. For example, not only has the American Association of Justice filed an amicus curiae brief in support of the Respondents (Plaintiffs) but so has the American Medical Association, former distinguished editors of the New England Journal of Medicine and the Attorneys General of forty-four (44) states. Moreover, U.S. Representative Henry A. Waxman, the co-author of the law, the Hatch-Waxman amendments, at issue in Mensing submitted an amicus curiae brief in support of Respondents (Plaintiffs). All the amicus curiae briefs in support of the Respondents (Plaintiffs) in Mensing mirror Respondents’ (Plaintiffs’) argument in Mensing as well as the rulings of the Fourth, Fifth, Eighth and Ninth Circuit Courts of Appeals: that nothing in the federal laws or regulations of the FDA preempt state tort personal injury claims against generic pharmaceutical manufacturers when a generic pharmaceutical manufacturer does not fulfill its duty to take the appropriate steps to ensure that its prescription drug products are accompanied by adequate, up to date warnings. Now, in due course the Supreme Court will weigh in and put to rest any questions regarding this issue. Support of Respondent; Brief for Dr. Christy Graves (the prescribing physician in Mensing) in Support of Respondent; Brief for the National Coalition Against Censorship in Support of Respondent; Brief for Marc T. Law, John Abramson, Julie Donohue, Michael Fischer, and Meredith Rosenthal (a coalition of professors in various disciplines with expertise in pharmaceutical issues) in Support of Respondent; Brief for Administrative Law and Civil Procedure Scholars in Support of Respondent; Brief for Rep. Henry A. Waxman in Support of Respondents Urging Affirmance; Brief for Jerome P. Kassirer, M.D., and Paul D. Stolley, M.D., M.P.H., (past editors of the New England Journal of Medicine) in Support of Respondents. Liability of the Generic Manufacturers

Source: http://www.curtis-lawgroup.com/_include/pdfs/topamax_teleseminar.pdf

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