Has Federal Pre-emption Killed Drug Design Litigation?
New York Law Journal
The common law of products liability traditionally posits three major theories of liability: defectively manufactured products; defectively designed products; and those rendered defective because of absent or inadequate warnings. Thus, it is routine to speak about manufacturing defects (i.e., where the product does not conform to the manufacturer’s own specifications); design defects (where the product was made as intended but the design itself is being impugned because it has blameworthy shortcomings); and failure-to-warn claims (where warnings, directions or instructions to the consumer fall short, creating an injury).
Some states have codified aspects of products law so that the common law has been adopted or modified by statute. Causes of action such as negligence, strict products liability and breach of warranty are recognized vehicles by which to assert the defect categories. Despite some variations in state laws, it is the applicable state law that normally governs the substantive course of the products lawsuit.
But what happens if a liability-oriented state legal standard materially clashes with federal law in, say, a federally regulated industry? It may be impossible or impracticable for the defendant manufacturer to comply with both the federal law and more onerous requirements imposed by a state’s tort doctrine. If both can’t be done, which one has to yield? Well, if the federal statutory and regulatory scheme expressly provides, or if the federal intent is to occupy the field (to the exclusion of conflicting state law), or if the dominance of the federal scheme can be implied and the state law would be an obstacle to effectuating the federal plan, then the state law may be displaced by what is called federal preemption. The state-based lawsuit seeking to apply the conflicting state law is precluded, i.e., pre-empted. When federal preemption is upheld by a court, a single lawsuit or others like it, or maybe even a wider swathe of products litigation may be eclipsed.
Here we report on a sparkling, snappy and readable law review article by noted torts scholar, Prof. Aaron D. Twerski, about to be published this Fall in 68 Am. U. L. Rev. Provocatively titled, “The Demise of Drug Design Litigation: Death By Federal Pre-emption,” readers don’t have to wait for the law review to be published. If they wish, an advanced version of the article is available at https://ssrn.com/abstract=3160985. The author was co-reporter (with Prof. James A. Henderson) of the Restatement, Third: Products Liability (1998), an influential and much-cited work issued by the American Law Institute.
Twerski’s prior writings show that he is no stranger to the law of pharmaceutical drug liability. His expertise can (and does) bring a deep perspective to evolving law. (See, e.g., Restatement, Third: Products Liability, sec. 6c (1998) (Restatement test for drug design defect ); Henderson & Twerski, Drug Design Liability: Farewell to Comment K, 67 Baylor L. Rev. 521 (2015); Henderson & Twerski, Drug Designs Are Different, 111 Yale L.J. 151 (2001); see also “Symposium: Liability for Defective Drug and Medical Device Design”, Brooklyn Law School Events’ Calendar ( Feb. 9, 2018 ), https://ww.brooklaw.edu/newsandevents/event/2018/02-09-2018?cat; (Presenters were Paul Rheingold, Professors Anita Bernstein, Mark Geistfeld, Catherine Sharkey and Aaron Twerski ).
Twerski’s forthcoming “Essay” tackles the complex issues attending federal preemption of drug design and other claims in the aftermath of the U.S. Supreme Court’s decision in Mutual Pharmaceutical v. Bartlett, 133 S. Ct. 2466 (2013) (hereinafter Bartlett), holding that manufacturers of generic drugs are immune from lawsuits claiming defective drug design because of federal pre-emption. That ruling has profound practical effects because generic drugs comprise nearly 86 percent of currently filled drug prescriptions. (See E. Lindenfeld, Brand Name Pre-emption: The New Frontier in Pharmaceutical Product Liability Litigation, 72 Food & Drug L.J. (2017)).
In turn, Bartlett’s negation of drug design suits against manufacturers of generics has spurred spikes in lawsuits against brand-name manufacturers, even though they did not sell any drug to the plaintiffs-litigants. See Lindenfeld, 72 Food & Drug L.J. 636 (“as a result, lawsuits against brand name manufacturers have increased dramatically”). In other words, an end-run around Bartlett’s preemption ruling is being attempted. The problem with this gambit is that even though Bartlett focused on generic drug makers, the language and reasoning sound like they apply to all medications designs. That seems to be Twerski’s analytical conclusion as well.
Thus, Twerski’s new assessment of Bartlett, which includes the earlier U.S. Supreme Court decision in PLIVA v. Mensing, 131 S. Ct. 2567 (2011)—holding that any failure-to-warn claim against a generic drug manufacturer that had labeled the drug using the warnings provided by the name brand manufacturer was pre-empted—posits that virtually all drug design litigation is “in demise.” Federal preemption essentially has done it in—even in suits against brand name manufacturers.
Instead, suggests the scholar-author, the future focus likely will be on failure to warn claims. It is interesting to note that, unlike generic drug manufacturers who are forbidden to change the brand name manufacturer’s warning, the latter entity is permitted by federal regulations to make certain changes to its label without FDA approval via so-called CBE (changes being effected) provisions. These allow a manufacturer to add or strengthen a warning or instruction. See F.G. Helmsing, Jr., Pre-emption of Design Defect Claims Involving Brand-Name Drugs, In-House Defense Quarterly, 36, 37 ( Spring 2016 ).
Pharmaceutical drug design liability cannot easily be shoe-horned into ordinary products liability rules. For example, one way plaintiffs prove a product design defect is to show that a practicably feasible, reasonable alternative design would have prevented the injury. Another similar approach is the so-called “risk-utility” balancing test where the risks of the product, as designed, are weighed against its utilitarian features. Plaintiffs normally urge that risks to safety outweighed the product’s utility and, so, the product should have been built differently.
Drugs, however, are a different creature, dominated by federal regulation, governance and oversight. As Twerski notes and the Bartlett decision observed (133 S. Ct. at 2475), for any drug to be marketed in the United States it must obtain Food & Drug Administration (FDA) approval. Any major change in the chemical composition of a drug requires that the applicant submit a New Drug Application. Obtaining FDA approval is a long and arduous process.
First, the applicant must submit an “investigational drug application” to allow clinical trials. After approval is obtained the drug goes through three critical phases that test the safety, efficiency of the drug to, initially, a limited group of patients and then to larger cohorts of persons. At any stage of the process, the FDA may reject the drug or require modifications. Such vetting can take a decade or more and can cost as much as several billion dollars.
The FDA has found that a new medication compound entering initial clinical testing is estimated to have only an 8 percent chance of reaching the market. Thus, no court could predict with confidence that a so-called reasonable alternative design proposed by a litigant would ever be approved. Indeed, says Twerski, a strong majority of legal commentators agree that the reasonable alternative design test is simply unworkable.
Major Changes Prohibited
The Bartlett decision recognized these realities within the umbrella of federal pre-emption. The Constitution’s Supremacy Clause making federal law “the supreme law of the land” triggers three types of federal preemption: “express,” “field” and “conflict.” The latter embraces so-called “impossibility” preemption, i.e., is it impossible for a private party to comply with both state and federal requirements? That was the kind of preemption foreclosing the lawsuit in Bartlett.
Federal regulations prohibit a manufacturer’s “major changes” that would alter the chemical composition of an approved drug. That applies to both generic and brand name medications. Thus, a manufacturer could not comply with the federal prohibition against major changes and, at the same time, comply with a state’s tort law requiring a change of the federally approved design to incorporate a so-called safer, reasonable alternative design. Such “impossibility” was at the core of the Bartlett pre-emption ruling.
Cases such as Bartlett, to be sure, present heart-rending individual scenarios. Sometimes, many persons across the vast spectrum of prescribed drugs suffer tragic consequences from drugs prescribed to treat, let’s say, not-so-severe conditions. If adequate warnings and risks are conveyed to the prescribing physician, that learned intermediary perhaps ought to be explaining the risks and consequences to the patient.
Let’s zoom in closer on the Bartlett facts to appreciate the tensions facing the Supreme Court. In 2004, Karen Bartlett consulted her physician about pain in her right shoulder. She was prescribed a nonsteroidal anti-inflammatory drug (NSAID) called Clinoril. Her pharmacy filled the prescription with Sulinac, a generic substitute made by defendant Mutual Pharmaceutical Co. Within weeks of taking the drug, Bartlett contracted Steven-Johnson Syndrome (SJS) and toxic epidermal necrolysis (TEN). She spent three months in the hospital (two of them in a medically-induced coma) and has permanent injuries including blindness.
Her lawsuit in a New Hampshire state court was removed to the federal district court. The case went to trial solely on a design defect theory in which she needed to prove that the risks of Sulinac outweighed its utility. The jury awarded Karen over $21 million. During the defendant’s appeal in the First Circuit, the U.S. Supreme Court decided PLIVA v. Mensing, 131 S. Ct. 2567 (2011), holding that any failure to warn claim against a generic drug manufacturer that had labeled the drug with the same warnings provided by the brand name manufacturer was preempted. Why? Because federal law forbade a generic manufacturer from independently changing the content of the warnings labels. Thus, it was impossible for defendant to comply with the state tort law rule claimed to require a safer warning and yet obey federal law on no-changes.
In Bartlett, defendant argued that PLIVA’s rationale also applied to generic design claims because the same kind of impossibility contention was applicable. Generic drug designs likewise could not be changed by the manufacturer. The First Circuit rejected the argument. In the Supreme Court, however, the impossibility form of implied preemption resonated and, so, the large jury award could not stand.
Much commentary and some court decisions do conclude that generic drug design preemption rationales extend to brand name medications. Twerski’s forthcoming law review essay identifies many of these. The article also analyzes a number of design arguments claimants are likely to attempt but the author sees them as vulnerable to the same preemption fate.
Here, due to space limitations, we have only scratched the surface on complexities in drug design and warnings litigation. Interesting issues abound. Many of these are lucidly presented in Twerski’s upcoming law review piece. And, perhaps even more compelling is the need to know where the law likely is heading. After all, whether we represent litigants in pharmaceutical cases or not, most of us or our loved ones are consumers of medications. Increased awareness of the playing field can enhance the reader’s practical advice to upgrade risk evaluations.