(Aaron Couture)

Courts have relied on the differences in the regulations of the Food and Drug Administration (FDA) governing the labeling of brand-name and generic prescription drugs to justify the differences in the courts’ application of preemption and, in a few jurisdictions, the merits of the controversial innovator liability doctrine in duty-to-warn cases. Now, in response, the FDA has proposed a rule amending its regulations governing generic drug labeling that, if approved and implemented, would significantly alter the scope of potential tort liability of brand-name and generic drug manufacturers. The proposed FDA rule would also dramatically change the drug-labeling process and the duties and responsibilities of generic drug manufacturers.

Current FDA Regulatory Requirements for Labeling

Before a brand-name drug manufacturer places a new drug on the market, it is required to submit a new drug application (NDA) to the FDA which includes, among other things, a proposed label. If the NDA is approved, the brand-name drug manufacturer has the exclusive right to sell the “reference listed drug” (RLD) for a period of time. Once that time expires, other manufacturers may enter the market.

To make more prescription drugs available at affordable prices, Congress enacted the Drug Price Competition and Patent Term Restoration Act (more commonly known as the Hatch-Waxman Act) as an amendment to the Federal Food, Drug and Cosmetic Act (FDCA). The Hatch-Waxman Act created an economical, less onerous and faster drug application approval process for generic drug manufacturers by allowing them to submit an abbreviated version of the NDA (ANDA). As part of the ANDA, the generic drug manufacturer must demonstrate that “the labeling proposed for the drug is the same as the labeling approved for the listed drug.” 21 U.S.C. § 355(j)(2)(A)(v). The FDA may revoke a previously approved ANDA if the warning label deviates from the label for the listed drug. After FDA approval has been granted, only the brand-name drug manufacturer may strengthen a drug’s warning label with either additional FDA approval or unilaterally by the filing of a supplemental application under the “changes being effected” regulation (CBE).

Preemption of State-Law Claims Against Generic Manufacturers

In recent years, the Supreme Court has addressed the question of whether the FDCA preempts state law failure-to-warn claims. In Wyeth v. Levine, 555 U.S. 555 (2009), Wyeth argued that the FDCA pre-empted Levine’s state-law claims based on the inadequacy of the warning label on its brand-name drug, Phenergan. Once the FDA approved Phenergan’s label, Wyeth claimed that it could not change the warning to comply with state law without the FDA’s approval of the proposed revised label.

The Supreme Court rejected Wyeth’s argument because the CBE allows Wyeth to strengthen its warning label without FDA approval by filing a supplemental application unilaterally. The Supreme Court emphasized that it is the manufacturer’s responsibility—not the FDA’s—to issue adequate warning labels upon receipt of new or updated safety information. Although the FDA considered the risks of IV-push administration at the time Phenergan was initially approved, the Supreme Court clarified that “new” information includes “a new analysis of [previously submitted] data showing risks of a different type or of greater severity or frequency.” Since it was possible for Wyeth to satisfy its state-law tort duties under the CBE procedure without violating the FDCA, the Supreme Court held that Levine’s state-law claims were not preempted by federal law.

The Supreme Court, however, reached an entirely different result as to the pre-emption of state-law failure-to-warn claims against generic drug manufacturers. PLIVA v. Mensing, 131 S. Ct. 2567 (2011). The court reasoned that “brand-name and generic drug manufacturers have different federal drug labeling duties.” While a brand-name drug manufacturer is “responsible for the accuracy and adequacy of its label,” the generic drug manufacturer’s responsibility is to demonstrate that its warning label is identical to that of the listed drug. Since the current FDA regulatory scheme makes it impossible for the generic drug manufacturers to revise the warning label without violating federal law, the Supreme Court held that state failure-to-warn claims against generic drug manufacturers are preempted by the FDCA.

Innovator Liability

The different FDA requirements for labeling brand-name and generic prescription drugs have also given rise in a few jurisdictions to the doctrine of “innovator liability,” a novel theory that imposes liability on brand-name drug manufacturers for injuries caused by a generic drug. New Jersey and other states with a product liability statute that limits liability to manufacturers of the product that caused the injury, have vigorously rejected the doctrine of innovator liability. Recently, however, in Dolin v. SmithKline Beecham Corp., 2014 U.S. Dist. LEXIS 26219 (N.D. Ill., Jan. 9, 2013), an Illinois federal district court held that a brand-name drug manufacturer may be liable for injuries from a drug that it did not manufacture. The Dolin decision has received a lot of attention and appears to have invigorated the proponents of the innovator liability doctrine.

In Dolin, Dolin’s widow filed a wrongful death action against SmithKline Beecham Corp. d/b/a GlaxoSmithKline (GSK), the brand-name manufacturer of Paxil, an antidepressant, and Mylan, Inc. (Mylan), the manufacturer of paroxetine, Paxil’s generic version. Dolin’s physician prescribed Paxil as treatment for his anxiety and depression, but his pharmacy substituted paroxetine. Six days after Dolin began taking paroxetine, he killed himself. The plaintiff alleged that a known side effect of the drug is akathisia, a condition that increases thoughts of suicide. The warning label, however, did not include a disclaimer that paroxetine may increase the risk of suicide in adults. Dolin’s widow alleged that GSK concealed and distorted clinical results showing the increased risk of suicide and marketed the drug as safe and effective. The plaintiff also alleged that Mylan knew or should have known of the drug’s association with suicide and the alleged concealed test results, but failed to warn consumers of the increased risk.

The court dismissed Mylan on preemption grounds but permitted the plaintiff to proceed with her state-law tort claims against GSK. In evaluating the negligence claim, the court began its analysis with the question of whether GSK owed a duty to the plaintiff. Although GSK and Dolin did not have a direct relationship, the court determined that the circumstances were “sufficient for the law to impose a duty of reasonable conduct upon GSK for the benefit of plaintiff.” The court reasoned that GSK knew that once its patent for Paxil expired, generic manufacturers would be legally required to use GSK’s warning label and, therefore, it was foreseeable that GSK’s negligent labeling of the drug may result in injury to a consumer who ingested the generic analog. In addition, the court found that because of the different FDA labeling requirements, whether a consumer took the brand-name or generic version had no impact on the likelihood of injury.

The court also rejected GSK’s argument that it could not be held liable because it did not manufacture the drug that proximately “caused” Dolin’s death. The court explained that the plaintiff’s claim of “negligent labeling” is extrinsic to the manufacturing process. GSK created a defective label which, under the law, the generic manufacturer was obligated to use, and which, in turn, caused the injury. Therefore, the court determined that it was immaterial that GSK was not the manufacturer of the generic drug that Dolin ingested.

FDA Proposed Rule

On Nov. 13, 2013, the FDA proposed a new rule that would create “parity” between brand-name and generic drug manufacturers with respect to certain types of safety-related labeling changes. Specifically, the proposed rule requires an ANDA holder to revise or update its generic drug label unilaterally through its CBE supplement on a temporary basis immediately upon its discovery of new risks or its recognition of the need for additional safety information associated with a drug on the market. The ANDA holder is obligated simultaneously to notify the NDA holder of the proposed revision and to provide substantiation for the change to the RLD. The purpose of the proposed rule is to underscore the important obligation of all drug application holders to make available to physicians and consumers the most recent safety information relating to the effective use of their drugs. The FDA is currently reviewing the submissions it has received on the proposed rule. The comments period closed on March 13.

Anticipated Impact

The proposed FDA rule, if adopted, would change the current drug-labeling process significantly and impose new investigative, analytical and notification requirements as well as substantial costs on generic drug manufacturers. There is also a significant likelihood of conflict between generic and brand–name manufacturers over the need for and proposed content of any supplement to the NDA’s warning label. The scope of potential tort liability of drug manufacturers would also change dramatically. The proposed rule would undermine the justification for innovator liability since brand-name manufacturers would no longer have sole control and responsibility over drug labeling.

At the same time, generic manufacturers would lose the protections afforded by federal preemption against failure-to-warn state-law claims. Consequently, consumers in states like New Jersey who are injured as a result of a defective warning label on a generic drug would have legal recourse that the current FDA regulations and tort laws do not provide. If the rule is finalized and adopted as proposed, it is also likely that generic drug manufacturers will challenge the FDA’s rule-making authority. The proposed rule is inconsistent with the Hatch-Waxman Act’s statutory “sameness” labeling requirements and thwarts the act’s primary purpose of encouraging generic manufacturers to develop less costly drugs. The progress of the proposed FDA rule, therefore, needs to be carefully monitored since it has the potential to cause extensive changes in drug labeling and tort liability in the pharmaceutical industry.