April 25, 2024

Drug Companies Win Two Supreme Court Decisions

WASHINGTON — The Supreme Court on Thursday handed drug companies two significant victories, one limiting suits from people injured by generic drugs and the other striking down a law that banned some commercial uses of prescription data.

In the first case, Pliva v. Mensing, No. 09-993, the court split 5 to 4 along ideological lines in ruling that the makers of generic drugs — which account for 75 percent of prescriptions dispensed nationwide — may not be sued under state law for failing to warn customers about the risks associated with their products.

Two years ago, in Wyeth v. Levine, the court decided the same question in the context of brand-name drugs but came to the opposite conclusion. That decision was based in large part on the fact that such drug companies can sometimes change the labels on their products without permission from the Food and Drug Administration.

Justice Clarence Thomas, writing for the majority on Thursday, acknowledged that in the eyes of injured consumers, the new distinction between generic and brand-name drugs “makes little sense.” But he said it followed from the way the two kinds of companies are treated under federal law.

The manufacturers of generic drugs, he said, must use the same warning labels as the corresponding brand-name drugs, and they may not unilaterally alter those labels. That means, Justice Thomas wrote, that makers of generic drugs are caught in an impossible bind: they can comply with a state law requiring them to change their labels or the federal law prohibiting changes, but not both.

Given that impossibility, federal law pre-empts state law under the Constitution’s supremacy clause, he wrote.

In dissent, Justice Sonia Sotomayor said the majority opinion invented “new principles of pre-emption law out of the air” and will lead to “absurd consequences.”

“As the majority itself admits,” Justice Sotomayor wrote, “a drug consumer’s right to compensation for inadequate warnings now turns on the happenstance of whether her pharmacist filled her prescription with a brand-name drug or a generic.”

The decision considered three consolidated cases brought by women who took generic metoclopramide, which is sold under the brand name Reglan. They took the drug for stomach ailments and developed a serious neurological disorder. Appeals courts ruled against the drug makers, saying that the federal regulatory regime did not block claims under state law.

The Supreme Court reversed those decisions on Thursday, rejecting what Justice Thomas called the “fair argument,” that the defendants should have at least tried to persuade the federal drug agency to let them use a safer label.

But the process of asking the agency to change a label, he wrote, can be as complicated as a children’s board game.

“If they had done so,” Justice Thomas wrote of a possible request for a label change, “and if the F.D.A. decided there was sufficient supporting information, and if the F.D.A. undertook negotiations with the brand-name manufacturer, and if adequate label changes were decided on and implemented, then the manufacturers would have started a Mouse Trap game that eventually led to a better label on generic metoclopramide.”

Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy and Samuel A. Alito Jr. voted with the majority.

In her dissent, Justice Sotomayor wrote that she agreed that the makers of generic drugs could not unilaterally change their labels. But she said that did not allow them to remain idle after learning of safety issues.

“Had the manufacturers invoked the available mechanism for initiating label changes,” she wrote, “they may well have been able to change their labels in sufficient time to warn” the women injured by their drugs.

The majority opinion, Justice Sotomayor said, may reduce the demand for generic drugs and put doctors in an ethical bind.

Justice Ruth Bader Ginsburg, Stephen G. Breyer and Elena Kagan joined the dissent.

In a second decision on Thursday, Sorrell v. IMS Health, No. 10-779, a six-justice majority of the court struck down a Vermont law that banned some but not all uses of prescription information collected by pharmacies.

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Justices Hear Arguments in Generic-Drug Lawsuit

On Wednesday, the justices heard arguments in a follow-up case that presented an interesting wrinkle: May the makers of generic drugs, whose products must use the same warning labels as the corresponding brand-name drugs and who cannot alter those labels, also be sued for failing to warn users about the risks posed by their products?

The answer to the question will have enormous financial consequences, said Jay P. Lefkowitz, a lawyer for the drug companies. “This would totally change the way generics do business,” he said of a ruling against his clients.

The three consolidated cases the court heard on Wednesday, including Pliva Inc. v. Mensing, No. 09-993, were brought by women who took the generic equivalent of Reglan for stomach ailments and developed a serious neurological disorder. Appeals courts ruled against the drug makers, saying that the federal regulatory regime did not block claims under state law.

Mr. Lefkowitz said the rulings put his clients in an impossible position.

“Generics can’t simultaneously comply with a federal duty to be the same and a state duty to be different,” he said.

He said the makers of generic drugs are in a fundamentally different business from the companies that created the original medications.

“Brand companies do safety and efficacy testing; generics do sameness testing,” Mr. Lefkowitz said. “Generics are required to make copies of the drugs and by definition make copies of the labels, because it wouldn’t make any sense to go into a drugstore to buy Advil and to see 15 different generic ibuprofen and to have 15 different sets of warnings.”

Justice Antonin Scalia echoed that point, likening the makers of generic drugs to “this guy who graduated from high school.”

“He doesn’t know anything about science,” Justice Scalia said. “He knows how to replicate this pill exactly. That’s all he really knows.”

But a lawyer for the plaintiffs, Louis M. Bograd, said that it would be odd to hold the two kinds of companies to different standards.

“The position that the generics are proposing here is one in which they would be immune from liability for selling a product with inadequate warnings,” he said, “even though the name-brand company selling the same drug with the same warnings would be liable.”

Mr. Bograd added that 70 percent of prescriptions were filled with generic drugs and that a third of generic drugs had no brand-name competitors.

“If generics are not responsible,” he said, “in many of these cases no one is responsible.”

Several justices said makers of generic drugs could take steps short of changing their labels, including urging the F.D.A to take action.

“You could propose a revision of the label, and if you did that, then you would be home free,” Justice Ruth Bader Ginsburg told Mr. Lefkowitz. “You would not be subject to the state suit.”

But Justice Samuel A. Alito Jr. seemed skeptical of lawsuits based on what he called “a duty to lobby the F.D.A.”

Justice Sonia Sotomayor said she doubted that Congress had intended a two-track system.

“Do you think Congress really intended to create a market in which consumers can only sue brand-named products?” she asked Mr. Lefkowitz. “Because if that’s the case, why would anybody ever take” a generic medicine?

Later in the arguments, Justice Alito proposed an answer to that question.

“I don’t know whether this is a good idea or not,” he said of allowing state suits, “but it does seem to me that it may significantly increase the costs for generic drug manufacturers, and therefore counteract one of the objectives of the statute, which was to provide generic drugs at a low cost.”

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