Will Supreme Court End Split Over Whether Generic Drug Companies Can Face “Failure to Timely Update” Claims?

The U.S. Supreme Court (SCOTUS) has (again) been asked to determine the question of whether claims can be made against generic drug manufacturers for failing to timely update and/or disseminate their labels following U.S. Food and Drug Administration (FDA) approvals. Essentially, the issue is whether the time taken by a generic company to effect a labeling change can be tortious and subject to a private cause of action.  A Law360 article with the Petition for Writ of Certiorari in Pliva Inc., v. Huck can be found here. (subscription required)

SCOTUS is being asked to rule that the Iowa Supreme Court erred when it held that “federal law does not bar state tort claims predicated on allegations that a generic drug manufacturer violated the FDCA by failing to immediately implement or otherwise disseminate notice of labeling changes that the FDA approved for use on the generic drug product’s brand-name equivalent.” There is a split among federal and state appellate courts, and this same issue is currently before SCOTUS in Teva Pharmaceuticals USA, Inc. v. Superior Court.  This past summer, in the Teva matter, the Supreme Court requested views from the Solicitor General.

In the wake of the Supreme Court’s recent preemption holdings in Pliva, Inc. v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharm. Co. v. Bartlett, 133 S. Ct. 2466 (2013), the plaintiffs’ bar has doggedly attempted to fashion novel theories of liability in various federal and state courts across the U.S. against generic drug manufacturers.

The issue raised by the petition in Huck “arises from ‘the special, and different, regulation of generic drugs’ under the Hatch-Waxman Amendments to the FDCA.” Under the statute, generic manufacturers have a duty of “sameness” that generally necessitates that generic labels incorporate changes approved by the FDA to the brand name equivalent. That “duty to update” is encompassed within the federal duty of  “sameness” under the FDCA. Because that duty is derivative of federal law, private claims should be preempted because the federal government has the exclusive authority to enforce the FDCA.

It appears that the court is ready to resolve whether this is an issue for the FDA alone, or whether private litigants also have the right to bring an action for unreasonable delay by a generic manufacturer in implementing or disseminating labeling changes mandated by the FDA. This certainly seems to be a question that falls within the exclusive ambit of the FDA. Obviously, there will always be some period of time between the date FDA mandates changes and the time when generic manufacturers can implement those changes.  If FDA thinks that they are taking too long, it has remedies to address that concern.  The question of how long is too long ought to be a regulatory one for FDA – otherwise, there is the risk that one state court may say it is too long, while another jury says it is not.  FDA has the expertise and the authority to deal with the issue.

Since this same question is pending before the court already, the latest petition highlights  the need for the court to provide clarity on this significant and split issue. In the interim, high- stakes failure-to-timely-update claims will continue to proceed against generic manufacturers in some jurisdictions but not in others. For those companies and practitioners currently facing such claims, the Huck petition provides a good roadmap and citations to relevant authorities. In some instances it may be beneficial to request a stay of proceedings pending SCOTUS action in Teva Pharmaceuticals USA, Inc. v. Superior Court, No. 13-956.

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