Monday, June 24, 2013

Court Says Federal Law Preempts State Design-Defect Drug Claim

A sharply divided Supreme Court ruled (5-4) today in Mutual Pharmaceutical Co., Inc. v. Bartlett that the Federal Food, Drug, and Cosmetic Act, or FDCA, preempted a state-law design-defect claim against a generic drug manufacturer.  Our last post on the case is here.

The ruling means that the plaintiff's state-law design-defect case against the drug manufacturer, in which she received a jury award over $21 million for severe disfigurement and permanent disabilities after taking a generic version of the pain reliever "sulindac," is dismissed--a big victory for Mutual, and a huge victory for generic drug manufacturers in general.  It also forecloses another state-law cause of action against a generic drug manufacturer, coming, as it does, just two years after the Court in PLIVA, Inc. v. Mensing (2011) held that the FDCA preempted a state-law failure-to-warn claim against a generic manufacturer.  Under these rulings, a state law could only escape preemption by establishing a liability scheme that's not tied to a standard of care that would require changing the composition or label of a drug--perhaps an absolute liability scheme that imposes liability without any showing of breach of duty (as opposed to a strict liability scheme, like this one, according to the Court, that is tied to a breach of duty, even if not negligence).  It may be hard to imagine this scheme, however, after today's ruling.  The dissenting Justices and Barlett read the state-law claim here as an absolute liability scheme; the majority disagreed.

Of course, Congress could change this result.  Congress could simply re-write the FDCA in a way that would explicitly allow state-law claims to complement the FDCA scheme for generic manufacturers, or to otherwise provide for manufacturer-paid compensation for those injured by generic drugs.  

According to the majority, Bartlett's claim ran right into PLIVA.  That's because the Court today said that (1) the state design-defect law imposed a duty on drug manufacturers to design their drugs reasonably safely, (2) both the FDCA and the drug's simple composition prevented Mutual from changing the design of the drug (to comply with that state-law standard), and (3) therefore the only way for Mutual to satisfy the state-law standard was to strengthen its warning.  But a label change for a generic manufacturer is foreclosed by PLIVA.  Thus, according to the Court, the state-law design-defect claim conflicts with the FDCA, and it is preempted.

(The Hatch-Waxman Act, part of the FDCA, provides a easy path for generic manufacturers to put their drugs on the market, provided they show that their drugs are identical to branded equivalents and provided that they use equivalent labels.  Once approved, generic manufacturers cannot change the composition of their drug or their label without prior FDA approval.  The whole purpose of Hatch-Waxman was to ease entry into the market for generics and thus make less expensive drugs more widely available.)

Justice Breyer dissented, joined by Justice Kagan.  Justice Breyer wrote that it was not impossible for Mutual to comply with both the FDCA and the state-law design-defect judgment: Mutual could have declined to do business in the state entirely, or it could simply pay the judgment (without altering its drug's composition or label).  Moreover, Justice Breyer wrote that there was no sign that the design-defect claim stood as an obstacle to FDCA objectives.

Justice Sotomayor, joined by Justice Ginsburg.  Justice Sotomayor wrote that the FDCA allows room for state law to complement federal law and to provide remedies in cases like this.  In particular, Justice Sotomayor wrote that the state law at issue did not require Mutual to violate federal law to comply, because state law did not depend on meeting a different state standard, that is, even if it encouraged a different design it didn't require a different design.

SDS

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