2nd UPDATE: High Court Bars Labeling Lawsuits Vs Generic Drug Makers

A divided Supreme Court on Thursday shielded generic drug makers from consumer lawsuits alleging they inadequately labeled their products.

The 5-4 ruling, written by Justice Clarence Thomas, followed a different path than the court's 2009 ruling against Pfizer Inc.'s (PFE) Wyeth unit. In that earlier ruling, the court said Food and Drug Administration regulations didn't protect a drug company from being sued under state law over drug labeling.

Generic drug makers, seeking to distinguish their case from the court's earlier ruling, argued they shouldn't face the same types of labeling lawsuits as branded drug makers because they had no choice but to use the same drug labels that the brand manufacturer used.

The court, in an ideologically divided ruling, agreed. "It was impossible for the manufacturers to comply with both their state-law duty to change the label and their federal law duty to keep the label the same," Thomas wrote in a 20-page opinion. He said the lawsuits against the generic companies are pre-empted by federal drug regulations.

Thomas acknowledged that the divergent treatment of brand-name and generic companies would make "little sense" from a consumer perspective. "But it is not this court's task to decide whether the statutory scheme established by Congress is unusual or even bizarre," he said.

The court's four liberal members dissented, saying the ruling "effectively rewrites" the court's decision in the Wyeth case.

"As a result of today's decision, whether a consumer harmed by inadequate warnings can obtain relief turns solely on the happenstances of whether her pharmacist filled her prescription with a brand-name or generic drug," Justice Sonia Sotomayor wrote for the dissenters.

In the case before the high court, generic-drug makers were seeking protection from two product liability lawsuits by consumers alleging they developed a neurological movement disorder after taking generic versions of the heartburn drug Reglan, a name-brand drug manufactured by Wyeth, and later by Schwarz Pharma Inc.

The two women at the center of the case began taking generic versions of the drug in 2001 and 2002. The FDA later approved a stronger warning label for Reglan in 2004, and ordered a black-box warning for the drug in 2009, saying it could cause the movement disorder.

The plaintiffs said the generic companies weren't powerless bystanders and did have the ability to ask the FDA to approve stronger warning labels for both the brand and generic versions of the drug. They alleged that mounting evidence showed the drug carried greater risks than previously known, but none of the drug companies ever proposed revising the drug label to reflect that risk.

Louis Bograd, the plaintiffs' lawyer at the high court, said the ruling created an "absolutely untenable" situation in which the 75% of the public that takes generics instead of brand drugs no longer has a legal remedy in labeling cases. He urged the FDA and Congress to consider regulatory or legislative changes.

The defendants included units of Teva Pharmaceutical Industries Ltd. (TEVA, TEV.TV) and Mylan Inc. (MYL), as well as Actavis Inc.

"This ruling furthers meaningful consumer protection while also safeguarding against lawsuits that threaten the availability of safe and affordable pharmaceutical products," Actavis Chief Executive Doug Boothe said in a statement.

A Teva spokeswoman said the ruling provided "great clarity" to the industry and patients, and would help alleviate unnecessary litigation. Mylan didn't respond to a request for comment.

Federal appeals courts based in St. Louis and New Orleans had allowed the lawsuits to proceed.

The lead case is Pliva v. Mensing, 09-993.

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

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