Litigation Alert: Ninth Circuit Rules State Law Failure-To-Warn Claims Against Manufacturers of Generic Drugs Not Preempted by Federal Law

Date: Jan 31, 2011

On January 24, 2010, the Ninth Circuit Court of Appeals joined the Fifth and Eighth Circuits, in extending the Supreme Court's decision in Wyeth v. Levine to state law failure-to-warn claims against makers of generic drugs. The Ninth Circuit held such state law claims are not preempted by federal law. (Gaeta v. Perrigo Pharmaceuticals Co., 9th Cir., No. 05-04115, 1/24/11).

Margarita Gaeta filed suit on behalf of her minor child, A.G., against Perrigo and several other manufacturers of generic ibuprofen, after her son suffered complications and eventually required a liver transplant, resulting from his use of ibuprofen after a minor surgery during which he was given an anesthetic known to be hepatotoxic. The Gaetas argued that the generic manufacturers failed to warn prescribing physicians and consumers of the increased risk of acute liver injury and renal failure when ibuprofen is taken concurrently with drugs known to be hepatotoxic.

Perrigo moved for summary judgment, arguing that the state law failure-to-warn claims conflicted with FDA regulations relating to the labeling and marketing of generic drugs. The district court granted summary judgment in favor of Perrigo, stating that Plaintiffs' claims were preempted because "a generic manufacturer could not comply with the heightened state law warning requirements without running afoul of the FDA regulations requiring generic drug labels to conform to the approved labeling for brand name drugs."

Plaintiffs appealed. The Supreme Court then decided Wyeth v. Diana Levine, 129 S. Ct. 1187 (2007) and the Plaintiffs obtained a limited remand from the court of appeal to allow the district court to consider a post-judgment motion for reconsideration. The district court denied the motion, concluding that Levine's holding that "the FDA regulations do not preempt state tort law claims for inadequate labeling against brand name manufacturers does not govern whether the FDA regulations preempt similar claims against generic manufacturers."

On appeal, Perrigo contended that the Gaetas' claims were conflict preempted for two reasons: (1) it is impossible for Perrigo to comply with state-law duties to warn and the federal regulatory regime governing generic drugs; and (2) the Gaetas' state law claims obstruct the full accomplishment of the purposes and objectives of Congress in enacting the Hatch-Waxman Amendments. The focal issue on appeal was whether the Supreme Court's holding in Levine – that the federal regulatory regime governing pharmaceuticals does not preempt state law failure-to-warn claims against brand name manufacturers – extends with equal force to claims against generic manufacturers.[1]

Like the Fifth and Eighth Circuits before it, the Ninth Circuit extended the Levine reasoning to generic drug manufacturers: "We agree with the Gaetas, and with our two sister circuits, that the FDCA provides generic manufacturers with at least three separate mechanisms by which they can discharge their state-law duty to warn of additional risks associated with their products: (a) the CBE process approved by the Supreme Court in Levine; (b) the ‘prior approval' process; and (c) by asking the FDA to send ‘Dear Doctor' warning letters to health care professionals."

The Ninth Circuit also rejected Perrigo's argument that the "FDA considered and rejected the liver warnings that the Gaetas claim Perrigo should have provided." In support of this argument, Perrigo relied on Levine, which left open the possibility that there could be preemption if a manufacturer is able to demonstrate, by clear evidence, that the FDA would not have approved the change to the drug's label proposed by the plaintiff. The Supreme Court, however, did not clarify what constitutes "clear evidence," other than to say that the evidence in that case was "insufficient to meet the clear evidence standard." Accordingly, since "the evidence presented by Perrigo in this case is no more compelling than the evidence considered and rejected by the Supreme Court in Levine … , we conclude that Perrigo did not meet its burden of demonstrating by clear evidence that the FDA would have rejected the Gaetas' proposed label change."

Finally, the Ninth Circuit rejected the argument that the state claims here were preempted because they stood "as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Perrigo argued that "exposing generic manufacturers to liability for inadequate warnings would either force them out of the market or require them to raise prices to offset potential liability costs, thereby thwarting the goal of the Hatch-Waxman Amendments to deliver low cost generic drugs to consumers." Similarly, "requiring generic manufacturers to place warnings on their products that do not appear on the corresponding brand name products would lead to loss of consumer confidence in generic drugs, which consumers already regard as being less safe and effective than the brand name drugs." The Ninth Circuit rejected both arguments and noted that the Hatch-Waxman Amendments were not intended as a ‘relief from the fundamental requirements of the FDCA that all marketed drugs remain safe," and that there is "no indication Congress intended consumers to have access to low cost drugs at the expense of safety." In fact, the Court noted, "by using the ‘prior approval' process, a generic manufacturer can avoid consumer confusion because, if the FDA accepts the proposed change, that change would be imposed uniformly on both generic and brand name manufacturers."

[1] This question is now before the U.S. Supreme Court, which agreed to review the Fifth and Eighth Circuit decisions, Demahy v. Actavis Inc., and Mensing v. Wyeth Inc., respectively. Oral argument has been scheduled for March 30, 2011.