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Preemption at issue in generic drug manufacturer case

1st Circuit lawsuit heard by SCOTUS

Deciding where the preemptive effect of federal rules governing drug manufacturing ends and states’ ability to impose liability on drug makers begins has never been an easy task — not even for the justices of the U.S. Supreme Court.

In March, the justices wrangled once again over the preemptive reach of the federal Food, Drug and Cosmetic Act in an effort to decide whether the law prevents design defect claims against generic drug manufacturers.

The 1st U.S. Circuit of Appeals decided in Mutual Pharmaceutical Co. v. Bartlett that the plaintiff could recover a $21 million jury verdict she won in New Hampshire, but suggested in its ruling that the Supreme Court consider the defendant’s argument that her claims were preempted.

The case gives the Supreme Court justices a chance to draw a line between two previous rulings: the 2009 holding in Wyeth v. Levine that state-law failure-to-warn claims are not automatically preempted by federal law; and the 2011 ruling in PLIVA Inc. v. Mensing that federal regulations governing generic drugs directly conflict with, and thus preempt, those claims.

Joseph J. Leghorn, a partner at Nixon Peabody, which has offices in Boston and Providence, R.I., has tried similar cases in the 1st Circuit. He said he expects the justices to reaffirm the Mensing decision.

“I think this is a rather easy question for the Supreme Court. It’s not a case they would have taken if they were going to uphold [Bartlett],” Leghorn said. “If [generic drug makers] are going to be held liable that way, it’s an imposition on the federal scheme.”

Tort defense attorneys agree that design defect claims against generic drug makers, which have been on the rise since the court handed down Mensing, should be preempted just as failure-to-warn cases are. It is up to the Food and Drug Administration, not members of juries, to decide whether a drug is safe to market, they say. As cases like Bartlett demonstrate, they argue, it is impossible to comply with both, so federal law trumps.

But Keith M. Jensen, a lawyer from Fortworth, Texas, who has represented plaintiff Karen L. Bartlett since the trial level, said that design defect suits play an important role in regulating drug manufacturers to ensure that products are safe and that victims are compensated when drugs are dangerous.

“Drug suits are complementary to the FDA’s mission in making drugs safe and effective,” Jensen said.

Plaintiffs may be a tougher sell this time around, though. Unlike in Mensing, when the U.S. Department of Justice backed the patient as amicus, in Bartlett it is backing the drug company.

“The FDA commissioner last week said that the FDA cannot ensure safety,” Jensen said, referring to a speech Commissioner Margaret Hamburg gave in Boston warning of the effect of the federal budget sequester on the agency. “This week they are arguing they are the sole arbiter of that.”

Identical drug, competing standards?

Federal law requires that the design and labeling of generic drugs be materially identical to that of their brand name counterparts.

Bartlett, who developed a degenerative skin disease after being given the generic version of the pain reliever Clinoril called sulindac, argues that she should be able to bring drug design defect claims.

Preemption does not apply, her attorneys argue, because it is not impossible to comply with both federal regulations and state tort law: Drug makers can either pay tort judgments for defective products or choose not to sell the drug. The 1st Circuit agreed with her and affirmed the judgment.

Nixon Peabody’s Leghorn said he takes issue with the suggestion that generic drug companies should cease selling a drug.

“That’s inconsistent with the basic enabling portion of the FDCA, which says that it’s to be carried out to promote the public health and the development of drugs,” Leghorn said. “To say that generic drugs should get out of the market doesn’t make sense.”

When it comes to generic drugs, the federal regulatory agency should control oversight, Leghorn said.

“It’s not because of the individual jury, but because of this crazy quilt of state laws dealing with what gives rise to liability,” he said, adding that the FDCA is in place to ensure that the same medications are available to all Americans.

Mutual Pharmaceutical also argues that the stop-selling argument fails, because the same argument would have applied in Mensing, but the Supreme Court still found preemption there.

“There is no principled basis for treating design defect claims any differently than failure-to-warn claims,” Jay Lefkowtiz, a senior litigation partner in the New York office of Kirkland & Ellis, arguing on the drug company’s behalf, told the justices in oral arguments.

“Suppose that New Hampshire had a real strict liability regime, so that if you sell a drug, whether it’s unreasonably dangerous or not, if it causes an injury, you pay?” asked Justice Samuel A. Alito Jr.

Lefkowitz acknowledged that such a law probably would not rise to the level of impossibility preemption, but stressed that is not what New Hampshire did in Bartlett.

“States are free to do lots of different things,” Lefkowitz said. “They only are not free to do things when they conflict directly with federal obligations.”

Anthony A. Yang, assistant to the U.S. solicitor general arguing as amicus in support of the appellant, said that states cannot impose duties on manufacturers that conflict with the federal regime.

“When you … make an obligation to pay tort liability [contingent upon] meeting a standard under state law, that is a duty that could conflict with a federal duty,” Yang said.

Chief Justice John G. Roberts Jr. asked whether it would be impossible to meet both standards.

“If you follow the same federal standard and market this in [the] state, you’re going to pay the compensation for the reason of spreading the costs,” Roberts said.

David C. Frederick, a partner in the Washington office of Kellogg, Huber, Hansen, Todd, Evans & Figel, argued on the patient’s behalf that the state is simply trying “to impose liability where there is proof of an unreasonably dangerous product.”

“The jury decides all of this, right?” Justice Antonin G. Scalia asked.

“That’s correct,” Frederick said.

“That’s wonderful,” Scalia said sarcastically. “Twelve [jurors] 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.”

A ruling is expected later this term.

Reporter Julie McMahon contributed to this story.

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