Supreme Court Issues Decision on Generic Drug Preemption; To Borrow From Harry Caray – “Holy Cow! Generics Win! Generics Win!”

By Kurt R. Karst –      

Like a young attorney (full of angst) waiting for Bar Exam results to be posted on the Internet, we sat in front of our computer this morning constantly hitting the “refresh” button to update the U.S. Supreme Court’s “2010 Term Opinions of the Court” website waiting for the Court to post its highly anticipated consolidated opinion in PLIVA Inc. v. Mensing (Docket No. 09-993), Actavis Elizabeth, L.L.C. v. Mensing (Docket No.  09-1039), and Actavis, Inc. v. Demahy (Docket No. 09-1501).  It happened at 10:15 AM.

In a 5-4, 20-page landmark majority decision delivered by Justice Clarence Thomas (joined in full by Chief Justice Roberts and Justices Scalia and Alito and and as to all except for Part III-B-2 by Justice Kennedy), the Court invoked the doctrine of impossibility preemption to hold that federal drug regulations applicable to generic drug manufacturers directly conflict with, and thus preempt, state tort-law claims based on drug manufacturers’ alleged failure to provide adequate warning labels for their products (in this case generic metoclopramide).  With this decision, the judgments of the Fifth and Eighth circuits were reversed, and the cases remanded for further proceedings. 

The decision comes a little more than two years after the Court issued its March 4, 2009 decision in Wyeth v. Levine holding that a state tort action against a brand name drug manufacturer for failure to provide an adequate warning label was not preempted.  Wyeth argued that it was impossible for the manufacturer to comply with both state and federal law under FDA’s Changes Being Effected (“CBE”) regulations.

We’re still poring over the nooks and crannies of the decision, but for now, here’s the bottom line:

(1)  The Court finds impossibility here.  If the Manufacturers had independently changed their labels to satisfy their state-law duty to attach a safer label to their generic metoclopramide, they would have violated the federal requirement that generic drug labels be the same as the corresponding brand-name drug labels.  Thus, it was impossible for them to comply with both state and federal law.  And even if they had fulfilled their federal duty to ask for FDA help in strengthening the corresponding brand-name label, assuming such a duty exists, they would not have satisfied their state tort-law duty.  State law demanded a safer label; it did not require communication with the FDA about the possibility of a safer label. Pp. 11–12.

(2)  The Court rejects the argument that the Manufacturers’ preemption defense fails because they failed to ask the FDA for help in changing the corresponding brand-name label.  The proper question for “impossibility” analysis is whether the private party could independently do under federal law what state law requires of it.  See Wyeth, supra, at 573. Accepting respondents’ argument would render conflict pre-emption largely meaningless by making most conflicts between state and federal law illusory. In these cases, it is possible that, had the Manufacturers asked the FDA for help, they might have eventually been able to strengthen their warning label.  But it is also possible that they could have convinced the FDA to reinterpret its regulations in a manner that would have opened the CBE process to them, persuaded the FDA to rewrite its generic drug regulations entirely, or talked Congress into amending the Hatch-Waxman Amendments.  If these conjectures sufficed to prevent federal and state law from conflicting, it is unclear when, outside of express preemption, the Supremacy Clause would have any force. That Clause— which makes federal law “the supreme Law of the Land . . . any Thing in the Constitution or Laws of any State to the Contrary notwithstanding,” U.S. Const., Art. VI, cl. 2—cannot be read to permit an approach to pre-emption that renders conflict pre-emption all but meaningless.  Here, it is enough to hold that when a party cannot satisfy its state duties without the Federal Government’s special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for pre-emption purposes. Pp. 12–14, 17. 

(3)  Wyeth is not to the contrary.  The Court there held that a state tort action against a brand-name drug manufacturer for failure to provide an adequate warning label was not pre-empted because it was possible for the manufacturer to comply with both state and federal law under the FDA’s CBE regulation.  555 U.S., at 572-573.  The federal statutes and regulations that apply to brand-name drug manufacturers differ, by Congress’ design, from those applicable to generic drug manufacturers.  And different federal statutes and regulations may, as here, lead to different pre-emption results.  This Court will not distort the Supremacy Clause in order to create similar pre-emption across a dissimilar statutory scheme.  Congress and the FDA retain authority to change the law and regulations if they so desire.  Pp. 17–20.

In what some might view as the central piece of the decision, the majority says that even assuming that generic drug manufacturers have a duty to propose labeling changes to FDA, there is still preemption, because to hold to the contrary would effectively nullify the Supremacy Clause:

[Plaintiffs] Mensing and Demahy contend that, while their state law claims do not turn on whether the Manufacturers asked the FDA for assistance in changing their labels, the Manufacturers’ federal affirmative defense of pre-emption does. Mensing and Demahy argue that if the Manufacturers had asked the FDA for help in changing the corresponding brand-name label, they might eventually have been able to accomplish under federal law what state law requires.  That is true enough. The Manufacturers “freely concede” that they could have asked the FDA for help.  PLIVA Brief 48.  If they had done so, and if the FDA decided there was sufficient supporting information, and if the FDA 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.

This raises the novel question whether conflict preemption should take into account these possible actions by the FDA and the brand-name manufacturer.  Here, what federal law permitted the Manufacturers to do could have changed, even absent a change in the law itself, depending on the actions of the FDA and the brand-name manufacturer.  Federal law does not dictate the text of each generic drug’s label, but rather ties those labels to their brand-name counterparts.  Thus, federal law would permit the Manufacturers to comply with the state labeling requirements if, and only if, the FDA and the brand-name manufacturer changed the brand-name label to do so.

Mensing and Demahy assert that when a private party’s ability to comply with state law depends on approval and assistance from the FDA, proving pre-emption requires that party to demonstrate that the FDA would not have allowed compliance with state law.  Here, they argue, the Manufacturers cannot bear their burden of proving impossibility because they did not even try to start the process that might ultimately have allowed them to use a safer label.  Brief for Respondents 47.  This is a fair argument, but we reject it.

The question for “impossibility” is whether the private party could independently do under federal law what state law requires of it. . . .  Accepting Mensing and Demahy’s argument would render conflict pre-emption largely meaningless because it would make most conflicts between state and federal law illusory.  We can often imagine that a third party or the Federal Government might do something that makes it lawful for a private party to accomplish under federal law what state law requires of it. In these cases, it is certainly possible that, had the Manufacturers asked the FDA for help, they might have eventually been able to strengthen their warning label.  Of course, it is also possible that the Manufacturers could have convinced the FDA to reinterpret its regulations in a manner that would have opened the CBE process to them. Following Mensing and Demahy’s argument to its logical conclusion, it is also possible that, by asking, the Manufacturers could have persuaded the FDA to rewrite its generic drug regulations entirely or talked Congress into amending the Hatch-Waxman Amendments.

If these conjectures suffice to prevent federal and state law from conflicting for Supremacy Clause purposes, it is unclear when, outside of express pre-emption, the Supremacy Clause would have any force.  We do not read the Supremacy Clause to permit an approach to preemption that renders conflict pre-emption all but meaningless.

The 21-page dissenting opinion delivered by Justice Sotomayor (joined in by Justices Ginsburg, Breyer, and Kagan) says that the majority “invents new principles of pre-emption law out of thin air to justify its dilution of the impossibility standard,” and thus makes the mere possibility of impossibility enough to establish preemption, and that the majority decision “effectively rewrites our decision in [Wyeth].”

Reaction to the decision has been swift.  The Generic Pharmaceutical Association (“GPhA”) promptly issued a press release saying that the organization “believes the High Court has appropriately recognized that current law leaves generic manufacturers with no alternative but to make certain that its products have labeling that is identical to the labeling of the reference brand product.”

And what about Congress?  Will it act to enact legislation intended to curb the Supreme Court’s decision?  In discussing the Wyeth decision, the Court notes that Congress is always free to change the law:

We recognize that from the perspective of Mensing and Demahy, finding pre-emption here but not in Wyeth makes little sense.  Had Mensing and Demahy taken Reglan, the brand-name drug prescribed by their doctors, Wyeth would control and their lawsuits would not be pre-empted. But because pharmacists, acting in full accord with state law, substituted generic metoclopramide instead, federal law pre-empts these lawsuits.  We acknowledge the unfortunate hand that federal drug regulation has dealt Mensing, Demahy, and others similarly situated.

But “it is not this Court’s task to decide whether the statutory scheme established by Congress is unusual or even bizarre.”  It is beyond dispute that the federal statutes and regulations that apply to brand-name drug manufacturers are meaningfully different than those that apply to generic drug manufacturers.  Indeed, it is the special, and different, regulation of generic drugs that allowed the generic drug market to expand, bringing more drugs more quickly and cheaply to the public.  But different federal statutes and regulations may, as here, lead to different pre-emption results. We will not distort the Supremacy Clause in order to create similar preemption across a dissimilar statutory scheme.

As always, Congress and the FDA retain the authority to change the law and regulations if they so desire. [(Internal citations omitted)]

Finally, what does the Supreme Court’s decision mean with respect to decisions like that reached by a California appellate court in Conte v. Wyeth, which held that the manufacturer of a brand name drug could potentially be held liable for an injury allegedly caused by the generic version of the drug?  (See our previous post here.)  This question is almost sure to be answered in due course.