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Supreme Court Sides with Generics, Rules State Law Failure-To-Warn Claims Preempted by Federal Law

Generic drug makers let out a collective sigh of relief on Thursday, when the U.S Supreme Court held that state tort suits accusing them of failing to provide adequate warning labels on their products were preempted by federal law. The decision was also a relief--not to mention a huge victory--for Kirkland & Ellis partner Jay Lefkowitz, who argued the generics' case at the high court in March.

The 5-4 ruling comes only two years after the Supreme Court ruled in Wyeth v. Levine that plaintiffs can bring state law claims alleging deficient drug labeling even if the drug makers' warning language was approved by the U.S. Food and Drug Administration. The majority opinion, which was authored by Justice Clarence Thomas, overturns decisions by the U.S. Courts of Appeals for the Fifth and Eighth Circuits extending the holding in Wyeth to apply to generic drug companies. The consolidated case decided Thursday concerned generic manufacturers Pliva, Inc., and Actavis Elizabeth. They produced generic versions of Reglan, a heartburn drug that was, coincidentally, manufactured by Wyeth Pharmaceuticals and was later found to cause severe neurological disorders.

As we've reported, generic drug companies have been fighting ever since Wyeth was decided in 2009 to argue that the decision applies only to brand-name manufacturers. Justice Thomas, who had concurred with the result in the Wyeth case, essentially agreed. The majority found that generic drug companies could not be held liable for violating state laws requiring them to update their warning labels upon learning of adverse side effects, because doing so would violate a Hatch-Waxman Act requirement that generic drugs have the same warning labels as their brand-name counterparts.

"Here, state law imposed a duty on the manufacturers to take a certain action, and federal law barred them from taking that action," wrote Thomas, who was joined by Chief Justice John Roberts and Justices Antonin Scalia, Samuel Alito and Anthony Kennedy. "The only action the manufacturers could independently take--asking for the FDA's help--is not a matter of state-law concern." Justice Thomas acknowledged that the ruling sits somewhat uncomfortably alongside Wyeth, noting that it probably "makes little sense" to the plaintiffs that their claims would have survived if they'd only taken Reglan rather than a generic version. "But 'it is not this Court's task to decide whether the statutory scheme established by Congress is unusual or even bizarre,'" he wrote.

Justice Sonia Sotomayor seized upon those words and accused the majority of rewriting Wyeth and inventing new principles of preemption out of thin air. "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," wrote Sotomayor, who was joined by Justices Ruth Bader Ginsburg, Stephen Breyer and Elena Kagan in the dissent. “The Court gets one thing right: This outcome 'makes little sense.'"

Kirkland's Lefkowitz, who represented Pliva and Actavis, told the Litigation Daily that the decision was good for consumers. "I think the court really recognized that states can't hold generic drug manufacturers liable for doing precisely what the FDA says they have to do and cannot deviate from," Lefkowitz said. "The trial lawyers were trying to make generic drug manufacturers take on all sorts of additional burdens and costs. Had the court ruled differently it would have led to significantly higher costs for consumers."

Louis Bograd of the Center for Constitutional Litigation, who argued the case on behalf of the plaintiffs, disagreed. "The court essentially held that 75 percent of the American public--the portion that fill their prescriptions with generic drugs--have no remedy when they are injured by one of those drugs that lack adequate warning labels," Bograd said. He said that the generic drug companies could have gone to the FDA voluntarily and asked that their labels, as well as those of its brand-name counterparts, be strengthened.

California Congressman Henry Waxman, who co-sponsored the Hatch-Waxman Act, had submitted an amicus brief urging the Supreme Court to support the plaintiffs. "The Hatch-Waxman Amendments do not categorically preempt state-law failure-to-warn claims," wrote Waxman. "Such claims are generally consistent with the purposes of the Amendments--to benefit consumers by bringing safe and effective low-cost generic drugs to market." With Thursday's ruling, the ball is back in the congressman's court.