Supreme Court Rules In Favor Of Generic Labeling
23 CommentsBy Ed Silverman // June 23rd, 2011 // 10:16 am
In a closely watched case, the US Supreme Court has ruled that generic drugmakers are not required to strengthen product labeling if alerted to side effects, even when the same change has not been made to the labeling for the branded med. However, the court was divided with a 5-to-4 majority deciding in favor of the argument made by the generic industry.
The decision came in response to a pair of lawsuits by two women who claimed such changes could have been made under state law and without FDA approval for such changes. They argued generic drugmakers would create uncertainty about safety if they are not held liable under state laws and update labeling in the face of evidence of serious side effects.
Generic drugmakers, including Actavis and Pliva, argued they would have been required to provide labeling that is different from what appears on labeling of the brand-name drug. In other words, generic drugmakers won the argument that federal law preempts state law. The two women who sued the generic drugmakers cited the 2009 Supreme Court preemption decision against Wyeth, which is now owed by Pfizer, that FDA regulations do not protect drugmakers from being sued under state law over labeling.
In writing the majority opinion, Supreme Court Justice Clarence Thomas rejected their argument as impossible for the generic drugmakers. “Where state and federal law directly conflict, state law must give way,” he wrote. “Such a conflict exists where it is ‘impossible for a private party to comply with both state and federal requirements. “The court finds impossibility here. If the manufacturers had independently changed their labels to satisfy their state-law duty to attach a safer label to their generic (drug), they would have violated the federal requirement that generic drug labels be the same as the corresponding brand-name drug labels.
“Thus, it was impossible for them to comply with both state and federal law. And even if they had fulfilled their federal duty to ask for FDA help in strengthening the corresponding brand-name label, assuming such a duty exists, they would not have satisfied their state tort-law duty. State law demanded a safer label; it did not require communication with the FDA about the possibility of a safer label…Here, it is enough to hold that when a party cannot satisfy its state duties without the Federal Government’s special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for preemption purposes.”
Generic drugmakers are thrilled. “The High Court has appropriately recognized that current law leaves generic manufacturers with no alternative but to make certain that its products have labeling that is identical to the labeling of the reference brand product,” Bob Billings, who heads the generic industry trade group, says in a statement. “As the Supreme Court recognized in this decision, assessing liability based on label content that is beyond the control of the generic manufacturer places the generic manufacturer in the impossible position of defending the content of a label that they are required by law to use but prevented by law from changing.”
Writing in dissent, Supreme Court Justice Sonia Sotomayor offered these thoughts: “The court today invokes the doctrine of impossibility preemption to hold that federal law immunizes generic drug manufacturers from all state-law failure-to-warn claims because they cannot unilaterally change their labels. I cannot agree. We have traditionally held defendants claiming impossibility to a demanding standard: Until today, the mere possibility of impossibility had not been enough to establish preemption.
“The FDA permits - and, the court assumes, requires - generic drug manufacturers to propose a label change to the FDA when they believe that their labels are inadequate. If it agrees that the labels are inadequate, the FDA can initiate a change to the brand-name label, triggering a corresponding change to the generic labels. Once that occurs, a generic manufacturer is in full compliance with both federal law and a state-law duty to warn.
“Although generic manufacturers may be able to show impossibility in some cases, generic manufacturers…have shown only that they might have been unable to comply with both federal law and their state-law duties to warn respondents Gladys Mensing and Julie Demahy. This, I would hold, is insufficient to sustain their burden. The court strains to reach the opposite conclusion.”
The case began with a lawsuit filed by Gladys Mensing, a Minnesota woman who took a version of Wyeth’s Reglan heartburn med and developed a neurological disorder known as tardive dyskinesia, which causes involuntary muscle movements (read the lawsuit). Similarly, Julie Demahy of Louisiana was prescribed Reglan to treat gastroesophageal reflux, developed the same problem and also filed a lawsuit, claiming long-term use of the generic was the cause.
A federal court and an appeals court both ruled in favor of Demahy (read this), while another federal court ruled against Mensing, although an appeals court later overturned that decision. These losses prompted the generic drugmakers to petition the Supreme Court, which consolidated the cases, to hear their argument.
gavel pic thx to walknboston on flckr
Salient point
The impossibility preemption is a very technical to decide this, but unfortunately the most appropriate one as well. Generic manufacturers were genuinely stuck between state law & an admittedly slow moving, underfunded federal bureaucracy.
It seems clear, though, that the generic legislation needs to be revisited. It’s been nearly 30 years & the landscape of medicine has changed substantially. This case merely highlights one of the unanticipated gaps.
Salient point
Sorry, technical “way.”
Justice in MI
Agree with the essence of SP’s comment.
Given the increasing proportion of generic rx’s, generic companies will receive an increasingly greater share of Medwatch reports and other indications of potential problems. (Correct me if all Medwatch reports which go to a generic company necessarily also go to brand company.)
As SP suggests, we know that FDA’s own review of safety signals–from Medwatch or elsewhere–almost always lags behind what becomes known or suspected by companies. In this context, Sotomajor’s comment that a generic should at least have a duty to notify FDA of potential problems (and not wait for them to find needle in Medwatch haystack) makes sense. That is different from making a unilateral label change via CBE, but it is not the same as nothing.
xtian
Do generic houses have pharmacoviligence departments? If not who are the adverse events even reported to?
Also, is ther a typo in the first sentence “generic drugmakers are not required to strengthen product labeling if alerted to side effects, even when the same change has not been made to the labeling for the branded …” Is it “even when” or just “when”?
Justice in MI, Inc.
Strongly recommend the Denahy Appeals Ct. decision that Ed links. Pretty much blows the “impossibility preemption” argument out of the water.
Among other things, Ct. argued that the identical label requirement applies to initial approval of an ANDA. There is nothing in the law about labeling requirements post-approval.
It is a reasonable interpretation that Hatch-Waxman intended a generic manufacturer’s ongoing obligations re: CBE to be the _same_ as brand company, not secondary to action by the latter.
Indeed, relevant FDA documents refer directly to the possibility of a generic company making independent label changes.
In the current climate, it seems to me a wise move would be for all of us to become private corporations. Our rights would be far better protected. Thus the change in my moniker, which I will continue–at least for a while.
Justice in MI, Inc.
Re: xtian’s comment, my quick search suggests that generic companies do, indeed, have pharmacovigilance depts (if on a smaller scale) and equivalent reporting responsibilities.
Registered Nurse
I am not an attorney, but agree with Justice in MI, Inc.(love it!)because generic usage will almost always exceed that of the brand when it is available. Having worked for a very large international pharma company manufacturing both brand and generic pharmaceuticals, our medical department, as is the case for most pharma companies I believe, is the first to hear about adverse events related to their products. Therefore, the generic manufacturer might be first to recognize where there is a significant incidence of adverse reaction. In the absence of a requirement to advise the brand manufacturer of excessive adverse incidents, no accountability for the generic maker to initiate an advisory to the consumer via a label change, and no liability under Federal Law, how do we assure the safety of these medications as they come off patent protection?
Tom Lamb
Justice Sotomayor got it right:
“As a result of today’s decision, whether a consumer harmed by inadequate warnings can obtain relief turns solely on the happenstance of whether her pharmacist filled her prescription with a brand-name or generic drug. The Court gets one thing right: this outcome ‘makes little sense.’”
Salient point
As the marketplace stands, generic companies are simply not able to take on the responsibilities for vigilance/liability that the dissenting opinion proposes. Their operating margins are too tight. They’ll either raise prices or drop certain medications (which would effectively raise prices due to a shift in the supply/demand curve). Either approach will run counter to the president’s stated goal of curtailing prices.
Reading more into Hatch-Waxman than is actually there violates separation of powers. The legislature is free to revisit this act. Or not. Either way, they then face the electorate in a year & a half, which is how the system is designed to work.
Justice in MI, Inc.
SP–In this case, I think it was the majority (if anyone) that was “reading more into Hatch Waxman than is actually there.”
As I understand it, there is nothing there at all about a generic company’s labeling obligations post ANDA approval, and thus “impossibility preemption,” always a very high bar, has no clear statutory basis. As you suggest, Congress may choose to change that. But the situation as it stands is that Congress has not changed it.
Given disagreement among lower courts up to the Fed. Circ. level, I don’t think principles like “separation of powers” are of any use here.
Obviously, different courts came up with different readings of the same statute, which we can premise as all sincere, all cognizant of separation of powers, and all complexly determined by factors not inherently necessitated by that statute’s current language.
Bruce Wayne
The major drug companies owning generic drugs have the same pharmacovigilant offices as the major companies as they are one and the same. The Supreme Idiots have now basically said that those who are less fortunate and cannot afford brand name drugs are not entitled to the same rights of consumer protection as those who are of greater economic means. The Supreme Idiots on the Right Wing are just finishing off the lowly Americans and protecting big corporate America. John Roberts and his clan of fools.
If this court went any more right, it would tilt full over.
I am glad I can see through this…why can’t others see the flaw in their reasoning? The Minority was “right” while the RIGHT WING was wrong.
Salient point
How can a state hold the manufacturer of a product liable for failure to give notice when the documentation of notice for the product is under the control of another company & a federal institution? You can try holding the other company liable, but they didn’t manufacture the product.
It’s a gap in this legislation–which is about a quarter-century old, mind you–that Congress has failed to address. That’s not the Supreme Court’s fault. And it doesn’t seem fair that the shareholders of Teva–which includes a fair amount of state & industrial pension funds & 401(k) holders, one would assume–should be thrown under the bus because our legislators don’t want to do the job our taxes pay them to do.
gia
Tony Lamb wrote:
Justice Sotomayor got it right:
“As a result of today’s decision, whether a consumer harmed by inadequate warnings can obtain relief turns solely on the happenstance of whether her pharmacist filled her prescription with a brand-name or generic drug. The Court gets one thing right: this outcome ‘makes little sense.’”
I’m missing something — I thought the ruling means that the brand-name and the generic drug will continue to have the same label and the same warnings. And if label changes are mandated in the future, then the labels of the brand-name and the generics will all be changed in the same way. If that’s the case, then Justice Sotomayor’s statement makes no sense to me.
harpy
it seems to me by that logic if someone wins a negligence case against a branded drug, then all those who were hurt by the generic would automatically be in a position to claim compensation, no?
Justice in MI
I have disincorporated for the moment….
Re: Gia’s post, one must distinguish between label changes that are “mandated” by FDA and those that are initiated by the manufacturer. As emphasized in the Levine majority, companies bear final responsibility for the label, and there are mechanisms through which they can and do add warnings without waiting for FDA’s blessing. FDA eventually needs to agree, and the added warning can be removed. As far as I know, there is no instance where that has happened and certainly no penality when a company has added warnings, whatever FDA’s final take.
The point, of course, is not to inhibit companies from taking warranted action on the basis of significant risk information which they will almost always have, and understand, before FDA.
Indeed, it’s been fairly recently (since FDAAA in 2007) that FDA could unilaterally mandate label changes at all. Thus the famous 14 months of negotiations between Merck and FDA over the Vioxx label.
I am not sure (but am very interested in) what SP means when writing, “the documentation of notice for the product is under the control of another company & a federal institution.” What does “documentation of notice” mean in this context?
harpy’s logic makes sense to me. Of course, one would assume that generic’s lawyers would argue that it isn’t their fault if branded company messed up. They were “innocent,” if interested, bystanders.
xtian
@ SP post of 23 June 4:44
I agree, but there is a consequence of “safer” drugs - higher prices. This is something I don’t think our curent president understands. The more regulation we put into place to protect the public (which is a good thing), the more it will cost drug companies (both generic and branded) to provide the public with those drugs.
Jaynesday
FDA Preemption and the courts continue to stand proudly and squarely in the way of common sense.
I could give a flip how difficult it is for the Generics to have to live with a messed up system. Should the consumers have to live with that? I don’t think so.
Salient point
JiM-Documentation of notice is the label. The PI functions to put doctors & patients on notice about potential effects. It doesn’t inoculate the company from liability, of course, & no one’s arguing that it should. (Well, some people are, but not me.) But it plays a legal role.
The trap that generic companies are in is that they have no control over this document. So they’re essentially being held responsible for failure to give notice when they don’t possess a mechanism for doing so.
Justice in MI
re: xtain’s point, there are no good studies which show that more regulation necessarily costs more than less regulation. At some point, there is a cost in less regulation insofar as it impacts liability (civil or criminal), a company’s reputation, and so on.
SP–I hear you. Where we seem to disagree, and where Circuits also disagreed, is whether generic companies do or do not have any control over this document post ANDA approval.
BTW, if you see this, wondering how you see harpy’s reflection–that if a brand company is successfully sued for inadequate warning a la Levine case, would the generics also be liable? I’m assuming you’d say “no,” since they had “no choice” regardless of whatever evidence they had or what they did or didn’t do about about it.
Let’s assume there is evidence that generic company suppressed data they had (they do have reporting obligations) that brand may or may not have had. Still immunity from potential liaility (aside from potential criminal sanctions via DOJ)?
Justice in MI
This interesting commentary from Law Profs, which I found via DDL’s commentary and their note re: the overweening self-interest of all lawyers except themselves.
“Regarding statutory construction, Justice Thomas argued that the state-law duty was not a duty to keep the FDA updated: State tort law imposed a duty to change the federally approved label. Therefore, the specific action sought by the respondents was rendered impossible by federal law, even if a different action (petitioning the FDA for a revision of labeling rules) was not. Justice Thomas acknowledged that this theory meant that generic drug makers would receive more protection through federal preemption from state-law tort suits than makers of brand-name drugs. Justice Thomas further acknowledged that such a difference was weird, given that generic drugs were supposed to be identical to brand-name drugs. Too bad: One had to follow the strict logic of preemption even into the land of bizarre: “it is not this Court’s task to decide whether the statutory scheme established by Congress is unusual or even bizarre,” he intoned. SCOTUS is just following statutory orders.”
This in accord with SP’s initial post on this matter.
Salient point
JiM-Thanks. Knowing I agree with Clarence Thomas makes my day.
Seriously, I was thinking about this over the weekend & think there might be a few statutory options:
a) Innovator company needs to keep label updated even if they no longer produce the branded drug; as a giveback, the regulatory path to creating generic companies within big pharma is eased, or, as a really big giveback, a generic company within the innovator brand’s company gets 6-month generic exclusivity post-patent expiration
b) The first generic company to market needs to maintain a supplementary “generic label” that tracks new developments; as a giveback, first generic gets 18 months’ exclusivity
Now both of these will increase prices, since a) extends liability & b) expands it to generic companies. Lawyers, settlements & judgments cost money, but at least people will be protected.
There will be a greater price increase with b), since it will slow the reduction in price after patent expiration. So I like a), although the FTC would be against it & it may be unconstitutional.
Gilbert
The talk of “increased” cost is laughable at best. The idea that the safety of the public is weighed against a profit margin sickens me.
Cost, in cases like this, is hardly an argument and if it is an argument it is one that is founded in folly.
“We cannot create a warning on a label because it will cost us too much when people start dying.” What is sad is that if generics were allowed to adjust labels with current information it would have cleared them of liability when people DID start dying as a result of their drugs as it would be a “known” side effect…at least before this case was decided. NOW, however; generic companies pretty much have a cart blanche to sell drugs with side effects that may not be on the label to the detriment of the public all while being shielded by either ignorance (i.e. “We didn’t know it was a side effect because the brand name company didn’t tell us), or via ye old “Poor us, nothing we could do” (i.e. unable to change a label to secure the safety of consumers).
I’m not up on patent law too much but at this point it would be beneficial for brand name companies to set special purpose businesses overseas, creating a brand name drug with a short patent time, then using the overseas company to sell the generic with reckless abandon.
Bottom line is laws need to be passed to address this very wrong situation.
sesquiculus
I am a physician, as well as a PhD pharmacologist-toxicologist. Docs generally know about the potential side-effects of drugs they prescribe. Label ? Never see it, as a practical matter.
Anyway, we do not need our diapers changed by some damn-fool non-clinically-trained person at the FDA. Remember, by definition generics have already been on the market for a while.