Generic drug manufacturer liability: achieving a balance between consumer affordability and safety.

AuthorJames, Sarah S.
  1. INTRODUCTION II. BACKGROUND A. Conflict Preemption Generally B. Current Federal Law, State Law, and Regulations C. Wyeth v. Levine D. Pliva v. Mensing 1. The Dissent 2. The Problem Mensing Created III. ANALYSIS A. No Changes Enacted B. Limited Liability in Tort Claims C. Change in State Preemption Scheme D. Modification of Federal Law E. Policy Concerns IV. RECOMMENDATION A. Methods That Fall Short of the Solution Required B. The Permanent Solution: Change in Federal Law V. CONCLUSION I. INTRODUCTION

    In its 2011 Pliva v. Mensing (1) ruling, the Supreme Court refused to hold generic drug manufacturers liable for state failure-to-warn claims because federal regulation regarding warning labels preempted state law. (2) In an earlier case, however, the Supreme court refused to grant preemption for brand-name manufacturers that it found could have complied with both state and federal laws. (3) This Note considers the implications of holding brand-name manufacturers liable while allowing generic manufacturers to avoid responsibility, including creating a regulatory gap that leaves consumers of generic medications without protection under state failure-to-warn claims. It also explores changes that could be effected to treat generic and brand-name manufacturers equally with respect to conflict preemption.

    In Part II, this Note introduces what conflict preemption is generally and when the Court applies it. Specifically, it gives a brief summary of current federal laws regulating the approval of prescription medications and introduces the two recent Supreme Court cases addressing preemption with respect to federal drug regulations and state tort laws protecting consumers. Part III analyzes different alternatives for how federal preemption of state claims in the prescription drug context might be avoided in the future, exploring the public policy considerations and the effect each might have on the prescription medication market. Taking these possible effects into consideration, Part IV recommends that Congress amend current federal law to require generic prescription drug manufacturers to contact the Food and Drug Administration (FDA) with label changes as soon as manufacturers deem a change necessary. This Note argues that this is the most effective and efficient solution available, considering public policy issues and fairness to the consumer.

  2. BACKGROUND

    With the total amount spent on medications in the united States surpassing $307 billion in 2011, (4) the pharmaceutical industry is, and will continue to be, an essential part of politics and consumer health. (5) To appreciate how this industry balances providing the products consumers need at a price they can afford, it is essential to have a basic understanding of the legal structure and agencies that regulate prescription medications in the United States. (6) This Part first explores when and how courts find conflict preemption and then considers two recent Supreme Court cases addressing conflict preemption with respect to safety warning labels on prescription medications.

    1. Conflict Preemption Generally

      The Constitution enumerates federal law "shall be the supreme Law of the Land ... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." (7) Commonly referred to as the Supremacy Clause, this part of Article VI of the Constitution provides that if there is direct conflict between state and federal law, federal law is supreme and state law is preempted. (8) Direct conflict occurs when it is impossible to simultaneously comply with both state and federal requirements in a given area. (9) Conflict preemption is sometimes a simple issue for the judiciary, but preemption is often more complicated and requires the court to determine congressional intent. (10) Because intent is scarcely transparent, the courts decide how to promote the policy behind a federal law through their interpretation. (11) In preemption cases dealing with areas of law typically regulated by the states, the Court "start[s] with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." (12)

    2. Current Federal Law, State Law, and Regulations

      Recent examples of conflict preemption exist in cases involving federal and state drug labeling requirements. (13) Federal law does not currently allow a manufacturer of generic prescriptions to unilaterally modify its own warning label because it must remain identical to the brand-name drug's warning label. (14) It does not allow additions, even to strengthen the warning. (15) However, many state laws command that all manufacturers alter their warning label if they know, or reasonably should know, of dangers associated with their medications. (16) Their label must reflect that danger to make consumption of the drug reasonably safe. (17) The tension between these laws raises a question about whether they are mutually exclusive or whether any drug manufacturer could realistically comply with both. (18)

      Typically, brand-name drug manufacturers have a patent over a drug for a period of up to 20 years from the date of filing. (19) During this time, they may have exclusive marketing rights if they meet certain statutory requirements. (20) After this time, generic manufacturers may complete the Abbreviated New Drug Application (ANDA) process for medications that are the bioequivalent (21) of a brand-name drug that the FDA has already approved. (22) In addition to being a bioequivalent, the generic medication must: have the same active ingredient as the reference brand-name drug, have the same strength and mode of administration, have identical batch requirements for quality, and follow the FDA's good manufacturing practice regulations. (23) The FDA explains, "[g]eneric drug applications are termed 'abbreviated' because they are generally not required to include preclinical (animal) and clinical (human) data to establish safety and effectiveness." (24)

      Congress created this process in 1984 when it passed the Drug Price Competition and Patent Term Restoration Act, commonly referred to as the Hatch-Waxman Amendments. (25) The Hatch--Waxman Amendments "allow generic drugs to gain FDA approval if they are equivalent to a drug that has already been approved." (26) These amendments mandate that a generic medication and a brand-name medication must furnish the same warning labels. (27) The FDA interprets its regulations to demand that a brand-name drug warning label and its counterpart generic warning label be identical: "[T]he [generic's] labeling must be the same as the listed drug product's labeling because the listed drug product is the basis for [generic] approval." (28) Congress enacted the Hatch-Waxman Amendments to accelerate the availability of cheaper generic medications by allowing generic manufacturers to apply without administering the expensive and repetitive clinical trials the FDA typically requires for approval. (29) The purpose was to "make available more low cost generic drugs by establishing a generic drug approval procedure" that saved generic manufacturers time and money. (30) In many ways, the amendments were a success, and generic medications did become more widely available and utilized. (31) While Congress wanted to make generic medications more accessible and affordable, it had to balance this desire with the incentives of the drug research and development companies (typically the brand-name drug manufacturers) to continue producing new, innovative medications. (32) If Congress took away too many of the benefits of being a brand-name manufacturer, these companies would not spend the millions of dollars and years necessary to develop innovative new drugs. (33) The research and development of new medications is extremely expensive. (34) Without the incentive of market control for a set amount of time to help recoup costs, drug manufacturers would be unlikely to spend the money on research that is necessary for development in the pharmaceutical field. (35)

      Many states have also carried out measures to increase the usage of inexpensive generic drugs. (36) Prior to the passage of the Hatch-Waxman Amendments, "[s]tates enacted legislation authorizing pharmacists to substitute generic drugs when filling prescriptions for brand-name drugs." (37) Although all states allow a physician to specifically disallow the pharmacist to switch to a generic medication, this takes varying degrees of action by the physician. (38) The Congressional Budget Office informs the public that "generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies." (39) These savings are immensely important because with increased access to medications, healthcare is improved for individuals across the nation. (40)

    3. Wyeth v. Levine

      Two recent Supreme Court cases addressed the possible preemption issue with respect to state tort liability and federal regulations regarding label requirements for drug manufacturers. (41) In the landmark case of Wyeth v. Levine, the Supreme Court held in a six-to-three decision that federal approval of a warning label by the FDA does not preempt state failure-to-warn claims against brand-name drug manufacturers. (42) The plaintiff in Wyeth lost her hand to gangrene due to the inadequate warning about the proper method of administration of Phenergan, a brand-name medication. (43) The Court held that conflict preemption--where federal law preempts the state law--did not occur in this case because brand-name drug companies are allowed to provide more information on their labels than what the FDA previously approved, and the manufacturer could have simultaneously followed both laws. (44) The Court additionally noted that acknowledging liability in this case is consistent with "the underlying statutory goal of informing doctors and patients of side effects and protecting patients from...

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