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Generic Drugmakers Avoid Liability… Again

The U.S. Supreme Court rules that Americans badly hurt by a generic drug cannot sue the manufacturer over design defects.

By Jay Kelley | June 26, 2013

Once again, the U.S. Supreme Court has ruled patients cannot sue generic drug manufacturers, this time for producing drugs with a defective design. In a 5-4 ruling, the justices held that a New Hampshire law requiring manufacturers to ensure the drugs they market are not unreasonably unsafe is pre-empted by federal law. The court's ruling overturns the $21 million awarded to Karen Bartlett by a New Jersey jury.

Alito: "The Results were horrific."

Ms. Bartlett developed an acute case of toxic epidermal necrolysis after taking the generic drug sulindac. Manufactured by Mutual Pharmaceutical Company, sulindac is the generic version of Clinoril, a nonsteroidal anti-inflammatory drug (NSAID). According to court records,

"Sixty to sixty-five percent of the surface of respondent's body deteriorated, was burned off, or turned into an open wound. She spent months in a medically induced coma, underwent 12 eye surgeries, and was tube-fed for a year. She is now severely disfigured, has a number of physical disabilities, and is nearly blind."

Writing for the majority, Justice Samuel A. Alito opined, "But sympathy for respondent does not relieve us of the responsibility of following the law."

Generic vs. Brand-name

As we have noted before, generic drugs are held to a different standard when it comes to regulation and liability. New brand-name drugs are subjected to more stringent testing standards. Prior to FDA approval, pharmaceutical companies must first submit reports of independent clinical trials proving the drug's safety and efficacy. They must also provide detailed manufacturing specifications, proposed labeling, and a discussion of why the benefits of the medicine outweigh any risks.

Makers of generic drugs have an easier time. They submit what is known as an "Abbreviated New Drug Application." They are not required to provide independent evidence of safety or efficacy. They must only show that the drug is the "pharmaceutical equivalent" (has the same active ingredients) and the "bioequivalent" (same rate and extent of absorption). They must also use the same labeling as the name-brand drug.

Federal Law Trumps State Law

The New Hampshire law imposes a duty on pharmaceutical companies to make sure their drugs are "not unreasonably unsafe." A drug's safety is evaluated based on chemical properties and the sufficiency of its warnings. Federal rules prohibit changing a generic drug's active ingredients and the court previously ruled in PLIVA, Inc. v. Mensing, that federal law prohibits generic drug manufacturers from independently changing their drug's labels. Therefore, since Mutual Pharmaceutical would have to violate federal law to satisfy the New Jersey statute, federal law prevails, pre-empting state law.

Moving Forward

In her dissent, Justice Sonia Sotomayor criticized the majority for its "undefended assumption that federal law gives pharmaceutical companies a right to sell a federally approved drug free from common-law liability." The way things stand now, generic drugmakers must follow brand-name packaging and manufacturing methods. While they can alert the FDA to potential safety risks, it is ultimately up to the agency whether or not to require label changes. In effect, this gives more rights to those suing brand-name drug producers than to plaintiffs suing generic manufacturers.

Since the Mensing decision, The New York Times reports that groups have begun to call on the FDA and congress to allow manufacturers of generic drugs to add safety warnings to their labels in the same manner available to brand-name drugs. With the court siding with business over citizens once again, it will be interesting to see if new legislation is proposed to put the generic drug manufacturers on a level playing field with brand-name manufacturers regarding liability. Even more interesting will be how such legislation may affect generic drug pricing.

Sources:

" In 5-4 Ruling, Justices Say Generic Makers Are Not Liable for Design of Drugs" by Katie Thomas, The New York Times, June 24, 2013

Mutual Pharmaceutical Co., Inc. v. Bartlett , 570 U. S. ____ (2013).

PLIVA, Inc. v. Mensing , 131 S. Ct. 2567 (2011)  --  The United States Supreme Court held that federal preemption immunizes generic drug manufacturers from liability for state law failure-to-warn claims.