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The new normal in pharma litigation

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Last year was especially tough for plaintiffs and consumers in the world of pharmaceutical litigation.

The United States Supreme Court decision in PLIVA Inc., et al. v. Mensing gave more power to drug companies, while appearing to give plaintiffs little recourse for injury or death caused by a generic pharmaceutical product. The ruling clearly has an impact on consumers and also has significant consequence for attorneys who practice pharmaceutical litigation — limiting the cases they can accept.

Justice Clarence Thomas, writing for the pro-business five-justice majority, concluded that federal drug regulations applicable to generic drug manufacturers directly conflict with, and thus pre-empt, state laws that permit claims against generic manufacturers.

The impact of this decision is far-reaching. Generics dominate the drug market, and this decision largely takes those manufacturers off the hook when it comes to warnings, and for the time being, may prevent a consumer from bringing a lawsuit against a generic manufacturer. In addition, the majority in PLIVA concluded that "federal drug regulations, as interpreted by the FDA, prevented the (generic) manufacturers from independently changing their generic drugs’ safety labels."

While a manufacturer seeking federal approval to market a new drug must prove it is safe and effective, and the proposed label must be accurate and adequate, the rules for generic drugs differ. In 1984, Congress enacted the Hatch-Waxman Amendments, which allow a generic drug manufacturer to gain FDA approval simply by showing that its drug is equivalent to an already-approved brand-name drug, and that the safety and efficacy labeling proposed for its drug is the same as that approved for the brand-name drug. By eliminating the need for generic manufacturers to independently prove their drugs' safety and efficacy, the Hatch-Waxman Amendments allow generic manufacturers to bring drugs to market much less expensively. However, the generics are bound by the warnings the brand-name manufacturer places on its label.

This is always the case, regardless of what the generic manufacturer might learn about the dangers of the drug. And state law may not be of help because of federal pre-emption.

The PLIVA ruling did not resolve the issue of whether the FDA regulations create a duty for generic manufacturers to request a revision of the labeling if the manufacturer believes the labeling is not as current or accurate as it should be; pre-emption alone ultimately was the focus of the court’s decision.

When actual statistics are considered, the implications of this decision are truly staggering. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies; additional billions are saved when hospitals use generics.

Generics now represent nearly 70 percent of all filled prescriptions. A report released last summer by IMS Health, a market research firm, concluded that generic drug use saved the American health care system more than $824 billion over the past decade.

Pharmaceuticals have never been more prevalent or promoted more than they are today, adding to the irony of the current situation. Consumers are bombarded with more pharmaceutical advertising than ever before, and they are also encouraged to use the cheaper forms of all of these drugs to save money and support generic manufacturers.

But even though generics have become the norm, the PLIVA ruling advanced the interest of the drug companies, not consumers. The legal changes literally happened overnight, altering the landscape of the industry just as quickly. Many attorneys have had to reject pharmaceutical cases as a result of PLIVA, largely because there is no one to hold legally responsible. And many courts have refused to allow cases against generic drug manufacturers to go forward.

Because of this decision, politicians and consumers are fighting back. Last year, the national, nonprofit consumer advocacy organization Public Citizen attempted to revise the current post-market regulations to bring them “in line with the realities of the pharmaceutical market and help ensure that drug labeling provides adequate warnings to patients based on information that comes to light after the drug is approved for marketing.”

Dr. Sidney Wolfe, director of Public Citizen Health Research Group, notes that “drug safety would benefit if generic manufacturers — who already have access to real-world information about adverse events — could use FDA procedures currently in place for brand-name manufacturers to revise labeling to warn of risks. Filling this regulatory gap would help protect patients.”

Others have also weighed in on the decision.

"Patients will now be taking generic drugs at their own risk," said Gibson Vance, former president of American Association for Justice. "It is absurd that doctors and patients will have to make medical decisions knowing that only brand-name drug manufacturers, not generics, can be held accountable for their drugs’ dangerous side effects. Congress and the Food and Drug Administration need to address the huge legal disparity between brand-name and generic drugs."

To address the discrepancy, Sen. Patrick Leahy (D-Vt.) introduced The Patient Safety and Generic Labeling Improvement Act to address the PLIVA decision, which creates “a troubling inconsistency in the law governing prescription drugs.” The act focuses on promoting consumer safety by working to ensure that generic drug companies can improve the warning information for their products in the same way that brand manufacturers can under existing law.

Also helping shift the picture are state court judges whose interpretations of PLIVA challenge the assumed meaning of the decision.

A recent April 2012 ruling in San Francisco further demonstrates that PLIVA has left open a doorway for potential recovery for victims of injury caused by generic drugs. In Otterstrom v. Mutual Pharmaceutical Co., Judge Richard Kramer ruled that PLIVA does not dictate what specific claims are pre-empted or precluded, but merely that a state law cannot require a generic manufacturer to provide anything other than what is in the brand label.

Looking forward, consumers and plaintiffs’ attorneys can depend on trial judges to continue to recognize PLIVA’s limitations, and hope that new legislation can balance the situation. Consumers should not only be able to trust the safety of the products they take, but they also need to be able to trust the process of consumer protection when those products fail.

-Submitted by Patricia Zlaket, an associate attorney with San Diego-based Casey Gerry Schenk Francavilla Blatt & Penfield LLP and a member of its pharmaceutical and medical device litigation practice team.

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