Cross-posted at WLF’s Forbes.com contributor page
In its June 2013 decision Mutual Pharmaceutical Co. v. Bartlett, the Supreme Court forcefully repeated what it said in 2011: federal law bars States from imposing tort liability on the manufacturer of a generic drug for providing allegedly inadequate warnings regarding health risks associated with use of the drug. The federal government—which embraces the tort bar’s mantra that every injured consumer ought to have a sporting chance of recovering damages from at least one deep-pocketed defendant—immediately responded by announcing plans to propose new regulations designed to overrule Bartlett. The details of the new regulations have not yet been disclosed. It is nonetheless highly unlikely that such regulations could survive a court challenge. The Hatch-Waxman Act, adopted by Congress in 1984, simply does not authorize the Food and Drug Administration to adopt the sort of regulations that it apparently has in mind.
Bartlett determined that federal law preempts the state-law failure-to-warn cause of action at issue in the case because the latter conflicts with federal law: it would be impossible for the generic manufacturer (Mutual Pharmaceutical Co.) to comply with the labeling requirements imposed on it by state law while also complying with federal law. The plaintiff was a New Hampshire resident who developed toxic epidermal necrosis, which caused much of her skin to burn off, after taking generic sulindac manufactured by Mutual. A jury awarded her $21 million in damages because, it determined, sulindac was defectively designed in light of Mutual’s failure to provide adequate warnings regarding the drug’s side effects.
The problem with the plaintiff’s theory was that the sulindac labeling was mandated by FDA. Had Mutual altered its labeling to supply the additional warnings required by New Hampshire tort law, it would have violated federal law, which requires a generic drug to bear the same labeling as its brand-name counterpart. The Supreme Court determined that the New Hampshire tort action was preempted because it was impossible for Mutual to comply with both laws. While Mutual could have asked FDA for permission to strengthen the warnings on its label, its inability to act unilaterally in adopting labeling changes means that Mutual lacked the power to comply on its own with New Hampshire law.
The Court rejected the plaintiff’s argument that Mutual could have complied with both federal and state law by withdrawing sulindac from the market. It noted that allowing plaintiffs to avoid preemption with a stop-selling argument would essentially overrule all of the Court’s impossibility preemption decisions.
FDA responded quickly to Bartlett by announcing plans for new regulations whose sole purpose is to overrule the decision. A July 3 notice on the Office of Management and Budget website indicated that FDA will soon release a proposed regulation entitled, “Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products.” The notice indicated that the proposed regulation would authorize generic companies to submit labeling changes to FDA for approval, and then to unilaterally implement the changes while FDA considers the submission. The notice said nothing about preemption of tort suits, but its purpose is obvious. Under the proposed regulation, it would no longer be impossible for a generic manufacturer to have included whatever expanded warnings plaintiffs’ attorneys are able to dream up.
When the proposed regulation is finally released, it will be interesting to learn what statutory basis FDA cites for authorizing generics to adopt unilateral labeling changes which expose them to liability suits. A straightforward reading of the Food, Drug, and Cosmetic Act (FDCA) strongly suggests that FDA lacks any such statutory basis. The FDCA provides that the Abbreviated New Drug Application (ANDA) submitted by a generic company must “show that the labeling proposed for the new drug is the same as the labeling approved for” the underlying brand-name drug. 21 U.S.C. § 355(j)(2)(A)(v). It further provides that FDA may not approve the ANDA unless the application demonstrates that the labeling “is the same.” 21 U.S.C. § 355(j)(4)(G). Soon after the Hatch-Waxman Act amended the FDCA to include those statutory provisions, FDA adopted regulations confirming both that a generic manufacturer must ensure at all times that its product’s labeling is identical to its brand-name counterpart and that the “sameness” requirement prohibits generics from making unilateral labeling changes.
FDA’s apparent desire to reverse that longstanding statutory interpretation cannot be squared with Congress’s understanding that generic drugs would bear the same labels as the brand-name drug on whose safety and efficacy the generic manufacturer is relying. Indeed, Bartlett explicitly held that the sameness requirement is mandated by the FDCA: “federal law prohibits generic drug manufacturers from independently changing their drugs’ labels.” 133 S. Ct. 2466, 2470 (2013).
Nor does it make sense from a public health policy standpoint to encourage generic manufacturers to start making independent labeling decisions. As part of its product-approval process, FDA mandates the precise language of product labels after carefully reviewing all available risk and benefit information. Of course, new information about a drug often comes to light after marketing has begun, and all manufacturers are required to report to FDA any significant new information they learn regarding potential health risks of their products. They are also encouraged to suggest to FDA that the labeling be changed in order to warn of previously unforeseen risks. But it makes little sense to encourage generic manufacturers—who by definition are relying on others’ safety data in marketing their products—to make unilateral determinations that FDA’s judgments regarding proper labeling should be overridden.
The only purpose of such a regulation would be to eliminate generic manufacturers’ impossibility preemption defense to tort claims and thereby to reverse the Bartlett decision. But FDA should not be adopting regulations simply to serve the interests of the plaintiffs’ bar. And in any event, FDA’s proposed regulation almost surely runs afoul of its statutory mandate.