THE 5TH CIRCUIT COURT REJECTS DRUG MAKER’S (REGLAN) ARGUMENTS OF PRE-EMPTION | Dallas, Texas Personal Injury Attorney Blog

The Fifth Circuit Court of Appeals announced in its recent decision, Demahy v. Actavis, Inc.(5th Cir. 2010), that the federal regulatory regime governing pharmaceuticals is without preemptive effect over state-law failure-to-warn claims against manufacturers of generic drugs. Translated, this means that simply because a manufacturer of generic drugs obtains FDA approval for the manufacturing and marketing of its drugs, the manufacturer can still be held liable for its failure to warn consumers of dangerous side effects that it knew or should have known about. This opinion follows the trend of last year’s landmark decision by the Supreme Court in Wyeth v. Levine, that such claims are not preempted against name brand drug manufacturers.

Actavis, Inc., the manufacturer of Reglan, a drug widely prescribed for gastroesophageal reflux, was sued by Julie Demahy because after taking Reglan for 4 years she alleges she developed tardive dyskinesia, a neurological movement disorder that causes the body to shake and tremor violently and uncontrollably.

At the time her doctor prescribed the medication, the Food and Drug Administration (FDA) had approved Actavis’ manufacture of Reglan. In 1985, the FDA required that Reglan’s label be updated to include a warning regarding the risk of developing tardive dyskinesia. Actavis revised its labeling to comport with these changes to the Reglan label. In February 2009, the FDA issued another labeling revision for metoclopramide meant to warn of the risk of prolonged use, defined as use for more than 12 weeks

Demahy asserted a failure to warn claim under the Louisiana Products Liability Act because Actavis did not warn of the risks of neurological disorder after long-term use of metoclopramide. Specifically, Demahy alleges that Actavis ignored scientific and medical literature establishing a higher risk of developing tardive dyskinesia, failed to request a labeling revision from the FDA, failed to change the label itself even though no prior FDA approval was required, and failed to report safety information directly to the medical community.

Actavis moved to dismiss Demahy’s claims, arguing the claims were “pre-empted” – that since the FDA did not originally require this disclosure, state laws could not impose such an obligation. The Fifth Circuit disagreed.

The issue of adequate warnings on labels of generic drugs is an important issue because so many people are purchasing generic forms of drugs either because their health insurance plans require it, or simply because of the cost savings. However, the labeling requirements of the FDA are significantly less stringent for generic drugs than they are for the original drug.

The FDA Process for Approval of Marketing New Drugs

All prescription drugs marketed in this country must first receive FDA approval. Manufacturers of new drugs must submit a new drug application (NDA) to the FDA that demonstrates the drug’s effectiveness and safety for its intended use. The 1962 Food, Drug and Cosmetics Act (FDCA) established this avenue for pioneer drugs, with the core objective of ensuring that drugs are both safe and effective; the FDA has codified the NDA regulations at 21 C.F.R. Part 314. New drug approval requires, among other deliverables, the results of successful clinical trials and labeling that accurately portrays the benefits and risks of the drug, as indicated by those trials and other data. “Before approving an NDA . . . [the] FDA undertakes a detailed review of the proposed labeling, allowing only information for which there is a scientific basis to be included in the FDA-approved labeling.” The FDA will reject the proposed labeling if “based on a fair evaluation of all material facts, such labeling is false or misleading in any particular.”

The FDA Process for Marketing Generic Drugs

Contrast this with the simpler, less demanding approval process required of generic drugs. In 1984, Congress passed the Hatch-Waxman Amendments to the FDCA, which altered the federal regulatory regime governing generics. Thanks to these Amendments, once a pioneer drug loses patent protection, a drug company may seek permission to market a generic version through a significantly simplified process, known as the abbreviated new drug application procedure, or ANDA. ANDA drugs must be the “same as” a name brand drug that has already been approved by the FDA as to active ingredients, route of administration, dosage form, strength, and conditions of use recommended in the labeling. Under Hatch-Waxman, generic drug manufacturers need not repeat the clinical work of their name brand counterparts, but instead must only establish the generic drug’s bioequivalence with the name brand drug. By avoiding “unnecessary,” “wasteful,” and “unethical” duplication of previously-performed human clinical trials, Congress meant “to provide a careful balance between promoting competition among pioneer . . . and generic drugs, and encouraging research and innovation.” In turn, this increased competition, coupled with the elimination of “retesting” of a drug that has already been determined to be safe and effective, would result in significant cost savings to the American public. Indeed, the Congressional Budget Office estimated that generic drugs save American consumers between $8 billion and $10 billion each year. Generic drugs now account for seven out of ten prescriptions filled in the United States.

In their application, generic manufacturers must also show “that the labeling proposed for the new drug is the same as the labeling approved for the listed drug. Applying to market a generic drug, then, requires “[a] statement that the applicant’s proposed labeling is the same as the labeling of the reference listed drug except for” enumerated differences irrelevant here; without such a statement, the FDA will deny the application.

Actavis’ Argument

Despite the Supreme Court’s decision in Wyeth v. Levine finding the failure to warn cases agains the original drug manufacture are not pre-empted, Actavis claimed that failure to warn cases against the manufacturer of generic drugs should be pre-empted because the manufacturer of a name brand drug may change its label unilaterally-through the FDA’s “changes being effected” (CBE) process-while seeking the FDA’s approval of the change, but that a generic drug manufacturer must produce the same drug and use the same label as the name brand drug manufacturer.

Here, as in every preemption case, “[t]he purpose of Congress is the ultimate touchstone.” Congressional intent to preempt state law can either be expressed in statutory language or implied in the aim and structure of federal law. Implied preemption comes in two forms: field and conflict preemption. Field preemption is inferred where federal law is so pervasive that it leaves no room for state supplementation. When Congress has not completely displaced the possibility of state regulation, preemption may nonetheless occur when state law “actually conflicts” with federal law. This conflict might be with a federal statute or an “agency regulation with the force of law.” Actavis claimed that under the Supreme Court’s decision in Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) it was impossible to comply with both the federal regulatory regime governing generic drugs and the state laws which imposed more a more complete disclosure on its warning labels, and that Louisiana law obstructs the goals of the FDCA, as amended by the HatchWaxman Amendments and implemented by FDA regulation.

Courts have been particularly reluctant to find preemption in such cases without an unambiguous signal of congressional intent. This is especially true in cases that involve health and safety concerns, because “[s]tates traditionally have had greater latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons.”

Demahy’s case seeks to hold Actavis liable for failing to take steps to change its warning label after approval in order to provide adequate warning once additional risks emerged. Generic manufacturers are subject to the requirement that their labeling “be revised . . . as soon as there is reasonable evidence of an association of a serious hazard with a drug.” Demahy claims that Actavis failed to comply with this requirement despite reasonable evidence that long-term use of metoclopramide poses a serious hazard.

As one court stated, “the purpose of [the] regulation was not to prevent a generic manufacturer from improving or strengthening its warnings. It was, instead, to ensure that the FDA could require a generic manufacturer to modify its labeling to match labeling changes in the reference listed drug.” In Levine, the Supreme Court found it “difficult to accept” that “the FDA would bring an enforcement action against a manufacturer for strengthening a warning.” Nor is “a drug . . . misbranded simply because the manufacturer has altered an FDA-approved label”; rather, the misbranding provisions concern the accuracy of the label’s substance and the adequacy of its warnings and the FDA “contemplates that federal juries will resolve most misbranding claims.”

In addition to the CBE and prior approval processes, Demahy claims that Actavis could have satisfied its state-law duty to warn by communicating directly with doctors, through a “Dear Doctor” letter. These letters are used in the industry to advise medical professionals of the risks associated with prolonged use of metoclopramide-would also be subject to FDA regulation because they fall within the agency’s broad definition of “labeling.” The FDA made clear that its labeling requirements “do not prohibit a manufacturer . . . from warning health care professionals whenever possibly harmful adverse effects associated with the use of the drug are discovered.”

Thus, though generic manufacturers cannot send “Dear Doctor” letters without prior FDA approval, they can suggest that the FDA send such letters on their behalf; the FDA will then send letters out if it determines that they are a necessary part of a risk evaluation and mitigation strategy.

This decision is clearly a victory for consumers. This decision encourages manufacturers of generic drugs to promptly update its warning labels to properly and timely advise consumers of the dangers associated with their drugs and discourages drug manufacturers from hiding the risks of their drugs from doctors and consumers. At Montes Herald Law Group, L.L.P., we believe drug manufacturers should be held accountable for the products they design, and distribute and for the warnings that need to be given for their product so that doctors and patients can make informed medical decisions about whether or not to prescribe or to take a drug. The FDA was correct when it advised the Supreme Court these lawsuits against drug manufacturers are beneficial not only to compensate individuals for the injuries they have sustained, but that these lawsuits also serve an important role in our society to ensure that manufacturers are held accountable to develop and to distribute safe products.