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Drug Lawsuits Under Scrutiny

Supreme Court considers limits on patients’ ability to file liability claims against generics manufacturers

by Glenn Hess
June 3, 2013 | A version of this story appeared in Volume 91, Issue 22

Credit: Shutterstock
The “design defect” legal theory could be the next big area of product liability facing drugmakers.
Photo shows prescription pills, drug bottles, instructions, and warnings.
Credit: Shutterstock
The “design defect” legal theory could be the next big area of product liability facing drugmakers.

The Supreme Court is expected to issue a ruling soon in a controversial case involving generic versions of Food & Drug Administration-approved medications. The case, Mutual Pharmaceutical Co. v. Bartlett, will likely determine the extent to which individuals can hold generic drug companies accountable for injuries allegedly caused by such medications.

At issue is whether generic drug manufacturers can be held liable in state courts for alleged defects in their product designs. Under federal law, these firms are required to provide identical ingredients and warning labels as their brand-name counterparts. The firms say that because they meet the federal regulatory standard for generic drugs, they should be protected from most product liability claims. Furthermore, this compliance trumps state consumer safety laws related to the drug’s safety profile.

If the drug industry wins the case, personal injury lawyers say, patients will likely be barred from arguing in court that a generic drug is too dangerous to be prescribed.

According to the law firm Bernstein Liebhard, the importance of this case cannot be understated. “A decision in favor of generic drug makers will close off the last remaining legal avenue open to victims of defective generic medications,” the New York City-based firm says.

On the other hand, allowing plaintiffs to sue manufacturers over a design defect “could send tort lawyers into every state court to second-guess just about any new drug and FDA’s decision to approve it,” says Scott Gottlieb, resident fellow at the think tank American Enterprise Institute.

The justices are reviewing a bid by Mutual Pharmaceutical to overturn a multi-million-dollar jury award to Karen L. Bartlett, a New Hampshire woman who in 2004 took Mutual’s generic drug sulindac after her doctor prescribed it for shoulder pain.

Sulindac is a nonsteroidal, anti-inflammatory drug that was developed by Merck & Co. and first sold under the brand name Clinoril. Although it is in the same class as aspirin and ibuprofen, sulindac has a rare but known side effect called toxic epidermal necrolysis, a potentially life-threatening skin disorder. This fact was disclosed on the drug’s label as required by federal law.

Within weeks of taking the drug, Bartlett developed a severe allergic reaction and suffered burnlike lesions over two-thirds of her body. She spent months in a medically induced coma, endured numerous eye surgeries, and is now legally blind.

Bartlett sued Mutual in U.S. District Court for the District of New Hampshire for alleged design defects. After a two-week trial in 2009, she was awarded $21 million in damages. The U.S. Court of Appeals for the 1st Circuit in Boston affirmed the lower court’s decision last year, saying Mutual could have simply decided not to make the drug at all because of the risks involved.

In asking the Supreme Court to overturn the award, Mutual argues that the Food, Drug & Cosmetic Act of 1938 prohibits Bartlett’s design defect claim because the federal statute explicitly grants FDA the authority to oversee the safety of prescription drugs. FDA approved Clinoril in 1978 and Mutual’s equivalent generic version in 1991. Mutual is now part of India’s Sun Pharmaceutical Industries.

The generic drug industry contends that FDA’s approval of sulindac as safe and effective and the restrictions on Mutual’s ability to change the formulation and the labeling should trump a state-level jury finding that the drug is unreasonably dangerous.

“This case, if decided incorrectly, threatens to undermine the authority of FDA, which is the only body that has the scientific knowledge, regulatory experience, and complete data to make these decisions,” says Ralph G. Neas, chief executive officer of the Generic Pharmaceutical Association, an industry trade group.

“Relying on untrained jurors and judges to make medical and clinical decisions about which prescription drugs are safe is not the right choice,” Neas remarks. “Doing so has the potential to disrupt and possibly stop the flow of medicines to millions of patients who need them most.”

The Supreme Court considered a similar lawsuit two years ago in Pliva Inc. v. Mensing. In a 5-4 decision, the justices ruled that generic drug makers cannot be held liable in state courts for failing to properly warn patients about potentially harmful side effects.

The court concluded in Mensing that failure-to-warn lawsuits are preempted by the labeling provisions of the 1984 Hatch-Waxman Act, which require generic drugs to carry the exact same warnings that FDA approves for brand-name drugs. Congress, not the judicial system, can change the law if it chooses to do so, Justice Clarence Thomas wrote in the court’s majority opinion.

The 2011 ruling means that a generics manufacturer has no responsibility to update its warning label when significant new risks are discovered, says Mary Alice McLarty, president of the American Association for Justice, the trial lawyers lobby.

But generics now account for about 80% of all prescription drugs, she notes. “All manufacturers should be held responsible for the design and safety warnings of their drugs,” McLarty asserts. “Accountability should not be a matter of brand or generic.”

She points out that not all health risks are identified before FDA approval, and many adverse effects don’t emerge until years after doctors begin prescribing a drug. Often this results in new warning labels, and even drugs getting pulled off the market. “FDA approves drugs and devices based on the manufacturer’s testing. This does not mean that the product is safe,” McLarty says.

To get around the precedent set by the Mensing decision, Bartlett’s lawyers are claiming that sulindac was inherently dangerous and had a faulty design to begin with, not that the labeling was insufficient.

During oral arguments before the high court in March, Mutual’s lawyer, Jay P. Lefkowitz, said the reasoning of Mensing should also apply to design defect claims because, as with warning labels, generic drug companies cannot choose to alter the chemical composition of their drugs.

“Federal law required generic sulindac to have the same ingredients, the same warning, and the same safety profile as the branded version,” Lefkowitz told the justices. “But a New Hampshire jury imposed liability because sulindac didn’t have a different safety profile, meaning a different ingredient or a different warning.”

Nevertheless, Bartlett’s attorney, David C. Frederick, said the jury didn’t order Mutual to redesign sulindac. “All New Hampshire is imposing here is a duty to pay compensation if your unreasonably dangerous product harms a patient,” he remarked.

Justice Elena Kagan, along with other traditionally liberal members of the Court, appeared to agree that FDA’s approval of a drug did not necessarily prevent a jury from finding that it was unreasonably dangerous under state-based product liability suits.

“What we have in the Food, Drug & Cosmetic Act is a statute that authorizes, that says, ‘You can sell this,’ ” Kagan said. “But it doesn’t say you must sell it, and it doesn’t give you a right to sell it.”

Several other justices, however, questioned whether nonexpert juries should be allowed to second-guess the judgments of FDA scientists and determine whether a drug’s risks outweigh its benefits.

“Twelve men tried and true decide for the whole state what the cost-benefit analysis is for a very novel drug that unquestionably has some deleterious effects, but also can save some lives,” said Justice Antonin Scalia. “That’s wonderful,” he quipped.

The Supreme Court is expected to issue its decision in Mutual Pharmaceutical Co. v. Bartlett by the end of June.


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