Supreme Court delivers big win to generic-drug makers

The high court's Pliva v. Mensing decision shields generic-medication companies from failure-to-warn claims.

Gladys Mensing and Julie Demahy didn’t know that the simple act of filling their prescriptions would eventually lead to litigation in the Supreme Court. Both women were prescribed Reglan, a brand-name heartburn drug made by Wyeth Pharmaceuticals, and their pharmacists filled their prescriptions with the drug’s generic versions. After taking the drugs for several years, Mensing and Demahy developed the same serious neurological disorder that causes involuntary muscle movements.

The women sued the generic-medication makers—Pliva Inc. and Actavis Inc.—because the drugs’ labels didn’t contain warnings about the possibility of developing the disorder. Mensing and Demahy also said the companies should have updated the labels as they uncovered previously unknown risks.

Pliva and Actavis contended that under federal law, their heartburn drugs’ labels had to be identical to Reglan’s. According to the companies, the Hatch-Waxman Act, which was introduced in 1984 to more quickly usher cheaper generic versions of expensive brand-name drugs to consumers, prohibits generic manufacturers from changing the labels on their drugs to differ from their FDA-approved brand-name equivalents at any point in time. Therefore, Pliva and Actavis argued, federal law pre-empted the women’s state tort claims.

The circuit courts that heard the women’s cases disagreed, citing the Supreme Court’s March 2009 decision in Wyeth v. Levine, in which the high court decided that brand-name manufacturers can be sued under state law for inadequate label warnings even if the label is federally approved because drug companies have a duty to update consumers about new safety information. Generic manufacturers should hold the same label-change responsibilities and liability as brand-name companies, the circuits said. 

The generic-drug makers appealed the rulings, and the cases were consolidated as Pliva v. Mensing before the Supreme Court, which heard arguments March 30. The outcome would be important to various stakeholders, including drug manufacturers, consumers and the courts, which have struggled to resolve failure-to-warn suits against generic-pharmaceutical companies since Levine

Contentious Decision 

On June 23, the Supreme Court decided 5-4 in favor of the generic-drug manufacturers, marking a departure from Levine. The narrow ruling was politically divided, with liberal Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor dissenting. 

But the majority wasn’t completely comfortable with the decision, either. Justice Clarence Thomas, who wrote for the court, admitted that the ruling made “little sense” in light of Levine, but that the FDA’s current regulatory framework essentially allows generic-drug makers to dodge failure-to-warn claims while brand-name manufacturers can be held liable for them. 

“It is not this court’s task to decide whether the statutory scheme established by Congress is unusual or even bizarre,” Justice Thomas wrote.

In Levine, the court clarified that FDA regulations require brand-name manufacturers to notify consumers of drug safety updates by sending “Dear Doctor” letters explaining newfound side effects to prescribing physicians or by issuing a Changes Being Effected notice, which adds or strengthens a drug’s warning label without requiring FDA approval. But in Mensing, the court noted that the FDA doesn’t allow generic-drug manufacturers to alter their labels or send “Dear Doctor” letters, so even if Pliva and Actavis had discovered additional side effects of their drugs, they would have broken the law if they had implemented label changes. 

“To me, the situation legally is unstable,” says Bert Rein, founding partner of Wiley Rein. He defended Wyeth in Levine. “Everybody in the court said no matter which result you favor, it’s not rational.”

In her dissent, Justice Sotomayor said the ruling will cause safety concerns among consumers. “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,” she wrote, adding that the “divergent liability rules threaten to reduce consumer demand for generics.” 

Justice Sotomayor’s trepidation about how Mensing will affect the drug market has weight. Currently, about 80 percent of prescriptions filled in the United States are generic drugs, with the number expected to rise in the next few years as drug patents expire and the health care reform bill, which encourages the use of generics, takes root. Experts, however, say it is unlikely consumers will shun generics.

“Consumers are clearly attracted to buying drugs that are much less costly,” says Kirkland & Ellis Partner Jay Lefkowitz, who represented Teva Pharmaceutical Industries Ltd., which includes Pliva, in Mensing

Sharon Caffrey, a partner at Duane Morris, which represents generic-drug manufacturers, says consumers probably won’t pay extra for brand-name drugs just to ensure they would be able to sue for any side effects they experience. “Is the average consumer really going to pay $200 or $300 out of pocket [to buy the brand-name drug] so that they have a potential claim if they’re harmed by a drug?” she asks.

Label Litigation

While failure-to-warn lawsuits against generic-drug companies will soon fall by the wayside in light of Mensing, the litigation landscape could hold some surprises for brand-name manufacturers. Consumers who experience side effects from a generic drug could theoretically sue the brand-name equivalent’s manufacturer.

“I actually have heard that plaintiffs are moving in this direction,” Caffrey says, though she doubts such cases will be successful.

Lefkowitz agrees that courts will reject the notion that brand-name companies should be held liable for generic companies’ products. “There are inherent problems with suing a company based on the consumption of drugs that it doesn’t sell,” he says. 

Rein says in-house counsel at brand-name manufacturers that are worried about litigation might consider dropping a brand-name medication once generic equivalents are on the market. “If you want to avoid all those headaches, ask yourself, ‘How much money can we make with this drug when one lawsuit will wipe it all out?’” he says.

In early July, Pfizer announced that it was considering dissolving its animal-health and nutrition units while strengthening its generics business. The pharmaceutical company noted that the decision was made in part because generic drugs make up the fastest-growing sector of the pharmaceutical industry. Other pharmaceutical companies may follow Pfizer’s lead and focus on generics development, particularly as their brand-name drugs lose patent protection. 

“Once they lose their exclusivity, they want to try to capture part of the market, so there’s a financial motivation that has nothing to do with the Mensing decision,” Caffrey explains. “However, I am sure that that financial motivation is enhanced by the Mensing decision.”

Possible Changes

The opposite outcomes of Mensing and Wyeth could induce regulatory changes. The Obama administration, which supported the Mensing plaintiffs, could encourage Congress to make revisions that would equalize the labeling duties and liability of generic and brand-name drug companies.

“This is an administration that has been very vocal in its anti-pre-emption feelings, so it’s one that would be interested in looking at some changes in the law,” Caffrey says. “However, it’s also an administration that’s dealing with some much bigger issues. Whether or not this is going to rise to the top of the pile in the next year and a half, I don’t know.”

Rein says that it could be tricky to level the playing field in terms of responsibility. Giving generic manufacturers the same label-changing abilities as brand-name makers could create inconsistency. He suggests a solution: All drug companies should submit label-change proposals to the FDA, which should then make the final decision as to the revisions that all companies must use for a particular drug. 

“You really need a single referee to get this done,” Rein says. “The thought that you could have the same drug sold on five different labels destroys the whole value of having a federally approved label.”

Contributing Author

Ashley Post

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