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Who Cares About Congressional Intent: Federal Preemption For Generic Drug
Manufacturers Gets Thrown Out The Window.
Lauren Fajoni Bartlett, Esq.
Leake & Andersson, LLP
New Orleans, LA
The Food, Drug, and Cosmetic Act (“FDCA”) was enacted in 1938 to regulate, among other things, the drug and medical device industry in order to ensure the safe and effective design, manufacture, sale and labeling of such products. Due in large part to the growing cost of health care, in 1984, Congress passed the Drug Price Competition and Patent Term Restoration Act, commonly referred to as the Hatch-Waxman Act, which was instrumental in bringing generic drugs into mainstream production. One of the main goals of the Hatch-Waxman Act is to provide individuals with ready access to more affordable generic drugs. Further, the government’s interest in providing affordable health care to the majority of Americans remains a top priority as evidenced by the Obama Administration’s recent hard push for health care reform. Generic drugs play a key role in accomplishing these important goals. Notably, “seven in ten prescriptions filled in this country are now for generic drugs.” Mensing v. Wyeth, 588 F.3d 603, 607 (8th Cir.2009). So, if the legislative and the executive branches understand the importance of affordable health care, why is the judiciary rendering decisions that appear to ignore these public policy considerations? In light of the regulatory provisions set forth in the FDCA and the Hatch-Waxman Act, and given today’s paramount concern over the rising cost of health care, coupled with the integral role that generic drug manufacturers play in accomplishing that goal, it seems wholly inconsistent that the judiciary would undermine these ideals by finding claims against generic drug manufacturers are not preempted. While such a conclusion seems counterintuitive, the majority view appears to be leaning in the direction of no preemption. More and more courts are holding that generic manufacturers have a duty to avail themselves of the Changes Being Effected (“CBE”) process notwithstanding the “same as” requirement for Abbreviated New Drug Application (“ANDA”) approval set forth in the Code of Federal Regulations (“CFR”), and decisions to the contrary are getting reversed. In Wyeth v. Levine, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009), the United States Supreme Court squarely addressed the issue of federal preemption in the context of FDA approval of a New Drug Application (“NDA”), concluding that state law tort claims are not preempted by the FDA approval process. It makes sense that the Supreme Court would hold that reference listed drug manufacturers are not immune from tort actions because they have an ongoing duty to monitor the effects of their products on human health and disclose known risks through the CBE process. See Wyeth v. Levine, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009). Since Congress places the onus on the manufacturer to monitor the market and not the FDA, the Supreme Court reasoned that state tort actions are one of the best ways to ensure adequate monitoring of the safety and efficacy of prescription medications. However, Levine did not address whether the same would be true of a generic drug manufacturer, nor did it discuss whether the CBE process was open to manufacturers of generic drugs. Among the first courts to address Levine in the context of a generic manufacturer was the United States District Court for the Northern District of Illinois in Stacel v. Teva Pharmaceuticals, USA, et al., 2009 WL 73274 (N.D.Ill. 03/16/09). See also Schrock v. Wyeth, Inc., 601 F.Supp.2d 1262 (W.D.Okla. 2009), which was decided 5 days before Stacel. In that case, the plaintiff, Melanie Stacel, sued Teva when she allegedly developed drug-induced lupus as a result of ingesting minocycline, a generic form of the reference listed drug, Minocin®. Specifically, she alleged that Teva had information showing that minocycline may cause lupus, but did not disclose this in its package insert. Teva filed a motion to dismiss arguing, among other theories, that her state law claims are preempted under the FDCA and the Hatch-Waxman Act. As part of its analysis, the court recognized that there are three forms of federal preemption: (1) explicit preemption, which is stated in the statute itself; (2) implied field preemption, which can be inferred either from a scheme of federal regulation so pervasive as to make reasonable the inference that Congress left no room for state regulation, or where an Act of Congress touches a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject; and (3) implied conflict preemption, where state law is preempted to the extent that it actually conflicts with federal law. Id., quoting English v. Gen. Elec. Co., 496 U.S. 72, 78, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990). In other words, preemption exists where it is impossible for a private party to comply with both state and federal requirements, “. . . or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id., quoting English. In denying Teva’s motion and finding no implied conflict preemption, the court relied on its interpretation of the Code of Federal Regulations and the recent Levine decision, which held that failure-to-warn claims are not preempted as to the manufacturer of a referenced listed drug. The court recognized that Levine is distinguishable because it did not involve a generic manufacturer, yet it nevertheless concluded that the reasoning was analogous with regard to generic manufacturers. The Stacel court found compelling that Teva could not point to any instances where the FDA had withdrawn an Abbreviated New Drug Application (“ANDA”) because a generic drug manufacturer added to or strengthened its warning label. Similarly, the Supreme Court in Levine also noted that it could not imagine that the FDA would bring an enforcement action against a generic manufacturer for strengthening its warning pursuant to the CBE process outlined in the CFR. However, the question is not whether the FDA would bring an enforcement action, but instead, the question is whether Congress and the FDA found some other overriding policy consideration that it deemed to be paramount to the apparently ambiguous CBE regulations. (While there is a colorful argument that the CBE regulations do in fact apply to generic drug manufacturers, the courts have not found persuasive conduct by the FDA and the United States government indicating that the CBE regulations were not intended to apply to generic manufacturers. The reasons for their disregard of this expression of intent is unclear.) As part of the ANDA process, the law requires that the manufacturer of a generic drug show that the labeling is “the same as” (or identical to) that of the reference listed drug; however, Stacel and the line of similarly situated cases hold that a generic manufacturer does in fact have an independent duty to strengthen its labeling through the CBE process, although it acknowledges that this can be done only after the approval process. The court states that its reasoning conforms with the legislative intent behind these regulatory laws because the purpose of Hatch-Waxman was to provide a conduit by which manufacturers could produce more affordable pharmaceuticals, not to permit them to engage in negligent activities. More particularly, courts seem to take considerable issue with the fact that a contrary holding would in effect leave an injured plaintiff without any substantive remedy. Notwithstanding the court’s reasoning, one overriding consideration that seems to have been overlooked is the fact that professionals in the health care industry rely heavily on the consistency of labeling between manufacturers of reference listed drugs and generics. For instance, in the context of prescription pharma, much of the information relied upon by health care professionals comes from the Physicians Desk Reference (“PDR”). While the PDR is a commercial publication, it is widely used and often relied upon by physicians when rendering medical treatment. Some courts have even gone so far as to say that the PDR is a learned treatise and can be relied upon as such for evidentiary purposes at trial. See Kahanek v. Rogers, 12 S.W.3d 501 (Tex.App. San Antonio 1999). The PDR is a compilation of package inserts for reference listed drugs, and often times a number (although typically not all) of commonly prescribed generic equivalents are cross-referenced; however, the package inserts for generic drugs are rarely if ever included in the PDR. Prescribing physicians typically are less familiar with a generic and write prescriptions based on their knowledge of the reference listed drug, although they typically authorize the administration of a less expensive generic if available. Of course, the physician’s decision to authorize the use of a generic is premised on the generally accepted notion that the generic is “the same as” the reference listed drug. If a physician was no longer able to rely on the “same as” presumption, he may be less inclined to authorize the use of a generic, which in turn results in an increased health care cost. The same reasoning holds true for pharmacists who offer their clients a generic alternative. Thus, the practical effect of Stacel and other similarly situated decisions on health care reform may be significant. Surely Congress contemplated this when the legislation was passed, yet this public concern seems to have escaped the judiciary for the time being. While Stacel may have been among the first to apply Levine to generic drug manufacturers, it certainly isn’t the last. Recently, both the Fifth and Eighth Circuits have found that state failure-to-warn claims brought against generic drug manufacturers are not preempted by federal law. See Mensing v. Wyeth, 588 F.3d 603 (8th Cir.2009); and Demahy v. Actavis, Inc., --- F.3d ----, 2010 WL 46513 (5th Cir. 2010). In Mensing, the court would not say that the Code of Federal Regulations expressly permits a generic manufacturer to avail itself of the CBE process, finding instead that, in that case, it should have at least tried. Seven weeks later, the Fifth circuit followed suit when it issued its decision in Demahy. Notwithstanding this line of cases, not all courts have gone so far as to extend Levine to generic manufacturers. District courts are divided on this issue both across the country in some cases within the same state. For instance, to date, among the post-Levine courts to address this issue, the Northern District of California, Western District of Kentucky and Southern District of Florida are among those in favor of preemption, see Gaeta v. Perrigo Pharm. Co., --- F.Supp.2d ----, 2009 WL 4250690 (N.D.Cal. Nov.24, 2009); Smith v. Wyeth, 2009 WL 425032 (W.D.Ky. Feb.20, 2009); Morris v. Wyeth, 642 F.Supp.2d 677 (W.D.Ky.2009); Wilson v. Pliva, 640 F.Supp.2d 879 (W.D.Ky.2009); and Masterson v. Apotex Corp., 2008 WL 3262690 (S.D.Fla. Aug.7, 2008), while the Northern District of Florida, New Hampshire and the Northern District of Illinois are against it, see Munroe v. Barr Labs., Inc., --- F.Supp. ---, 2009 WL 4047949 (N.D.Fla. 2009); Bartlett v. Mutual Pharm. Co., ---F.Supp. ---, 2009 WL 3126305 (D.N.H. 2009); and Stacel v. Teva Pharm., 620 F.Supp.2d 899 (N.D.Ill.2009). Note, however, that the Kentucky decisions are currently on appeal to the Sixth Circuit, so this decision will be an important one to watch. While both the United States and the FDA have expressed a contrary intent to this kind of broad-based application (see, for example, the FDA’s preamble to the proposed rule change relating to CBE submissions that was published in January 2008; see also Brief of the United States in support of Wyeth in Levine, 2008 WL 2308907), the prevailing trend is to find that tort actions against a generic drug manufacturer based on a failure-to-warn theory of liability are not preempted. In the absence of a United States Supreme Court ruling or Congressional act directly aimed and correcting this inequity in the law, the majority rule will allow such claims to survive. Lauren Fajoni Bartlett is a senior associate in the New Orleans, Louisiana, firm of Leake & Andersson, LLP. She specializes in the areas of products liability, commercial litigation, insurance law, construction law and appellate advocacy. She currently serves as the newsletter editor for the DRI Technology Committee, she is the vice-chair for the Technology Subcommittee for the Young Lawyer’s Section of DRI, and she also serves as the Young Lawyer representative to the DRI Insurance Law Committee.



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