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Litigation: Mutual Pharmaceutical Co. petitions Supreme Court to reverse design-defect decision
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Litigation: Mutual Pharmaceutical Co. petitions Supreme Court to reverse design-defect decision

The 1st Circuit ruled against the company, holding that a Supreme Court drug labeling decision does not apply to design-defect cases

The generic drug industry suffered a disappointment when the 1st Circuit recently held federal law did not preempt state tort law in design defect cases. The 2011 U.S. Supreme Court decision in PLIVA, Inc. v. Mensing held that state law tort claims based on defective warning labels are preempted because generic drug manufacturers must use labels that are the “same” as the brand-name drugs’ labels. Since PLIVA v. Mensing was decided, generic companies have argued this reasoning should extend preemption to design defect claims because generic companies must use the same design, just as they must use the same labels. Several district courts had endorsed this reasoning in other circuits. The 1st Circuit held in Bartlett v. Mutual Pharmaceutical Co., Inc., however, that PLIVA did not extend to design-defect claims against Mutual Pharmaceutical Company. On July 31, Mutual filed a writ of certiorari with the U.S. Supreme Court, asking for summary reversal of Bartlett because the “sameness” rationale supporting preemption in Mensing should also apply to the design of the drug product.

Mutual argues in its writ that the sameness mandate of the Hatch-Waxman Act of 1984 precludes drug manufacturers “from unilaterally altering either the label or design of their generic drug products”; that there is no rationale to distinguish failure-to-warn and design-defect claims, and thus both types of claims are preempted under Mensing. The principle underlying the Mensing opinion—that Congress intended the Hatch-Waxman Act to give the public greater access to less expensive generic drugs—should apply equally to design-defect claims. Mutual points out that the brand-name drug company is obligated to conduct “extensive and costly clinical trials” as part of its New Drug Application (NDA), but Hatch-Waxman created a process by which generic companies need only submit an Abbreviated New Drug Application (ANDA) “that simply demonstrates the product’s chemical and biological equivalence to a previously approved drug product.” The Supreme Court in Mensing relied on these differences, stating: “It is beyond dispute that the federal statutes and regulations that apply to brand-name drug manufacturers are meaningfully different than those that apply to generic drug manufacturers. Indeed, it is the special, and different, regulation of generic drugs that allowed the generic drug market to expand, bringing more drugs more quickly and cheaply to the public.”

The 1st Circuit acknowledged that Mutual cannot legally make the drug in another composition, but reasoned that Mutual “certainly can choose not to make the drug at all.” The 1st Circuit further stated that since the plaintiff “lost her warning claim by the mere chance of her drug store’s selection of a generic, the Supreme Court might be less ready to deprive Bartlett of her remaining avenue of relief.” Mutual asserts that the 1st Circuit’s decision and reasoning is contrary to the decisions of other courts that have considered these issues, including cases from the district courts in Louisiana, Texas, Vermont, Kentucky, New York and New Jersey. Mutual also argues that the 1st Circuit decision is contrary to the decisions of the 5th, 6th, 8th and 9th Circuits. These rulings rejected the 1st Circuit’s withdraw-from-the-market theory, but they did not directly address the issue of preemption of design-defect claims. 

Mutual argues in its writ that accepting the 1st Circuit’s theory that generic drug manufacturers can comply with its obligations under state and federal law by withdrawing from the market would make conflict preemption “largely meaningless” because a conflict between state and federal can always be avoided by withdrawing from the conduct regulated by federal law. As Mutual further asserts: “In short, because the manufacturer of any product can in theory ‘choose’ to stop selling that product in any given State, no federal requirement ever could generate a preemptive conflict under the 1st Circuit’s radical approach.” Moreover, in Mensing, as Mutual argues, the Supreme Court acknowledged the policies that encourage generic drugs. The Supreme Court also recognized the “unfortunate hand that federal drug regulation has dealt” the plaintiffs because if they had taken the brand-name drug, instead of the generic drug, their state tort law claims would not have been preempted. But, the Supreme Court rejected this as a basis not to find preemption, stating instead: “Indeed, it is the special, and different, regulation of generic drugs that allowed the generic drug market to expand, bringing more drugs more quickly and cheaply to the public.”

Contributing Author

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Neil Merkl

Neil Merkl is a partner in the New York office of Kelley Drye & Warren LLP. He focuses on complex commercial litigation. Some of the...

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Contributing Author

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Clifford Katz

Clifford Katz is an associate in the New York office of Kelley Drye & Warren LLP, in the litigation department.  He focuses on complex commercial...

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