Proposed FDA Rule Effectively Abrogates Pliva v. Mensing and Mutual Pharmaceutical v. Bartlett and Opens Up Liability for Generic Drug Manufacturers

On November 13, 2013, the U.S. Food and Drug Administration proposed a new rule allowing generic drug manufacturers to independently change their product’s labeling to reflect newly discovered safety information. The FDA’s proposed rule allows generic manufacturers the ability to unilaterally change the labeling through a “changes being effected - 0” (hereafter “CBE”) supplement. The underlying reason generic manufacturers have previously been shielded from liability is due to their inability to unilaterally or independently change their label to differ from the brand-name product’s label. The Supreme Court’s decision in Pliva, Inc. v. Mensing, shielding generic manufacturers from failure to warn claims, hinged on the fact that generic manufacturers did not have the ability to submit a labeling change under the CBE process. 131 S.Ct. 2567 (2011). Because the generic manufacturer did not have the ability under the FDA’s regulatory scheme to deviate their labeling from that of the brand-name drug manufacturer’s label, the failure to warn claims were held to be pre-empted due to what is commonly referred to as impossibility pre-emption.   

Under current regulations, a generic drug manufacturer’s product labeling must be exactly the same as that of the brand name manufacturer’s label. This “sameness” requirement has protected generic manufacturers from liability. For example, in Mensing the Supreme Court held that because FDA regulations prohibit generic drug manufacturers from “independently” or “unilaterally” changing their products’ labeling, state-law-failure-to-warn claims are pre-empted. Pliva Inc. v. Mensing, 131 SCt 2567, 2579 (2011). Conversely, because brand name manufacturers have the opportunity to submit a CBE, state-law-failure-to-warn claims are not pre-empted. In Mutual Pharmaceutical v. Bartlett, the Supreme Court again shielded the generic drug manufacturer from liability based upon the FDA requirements that the generic be substantially equivalent in design to the brand-name version of the drug and that it contain the same labeling as approved for the brand-name manufacturer. 133 S.Ct. 2466 (2013). Because generic drug companies were unable to change their design or labeling under the Hatch-Waxman Act and the FDAs regulatory scheme, state law failure to warn and design defect claims were held to be pre-empted by the U.S. Constitution’s Supremacy Clause. 

Due to the increased risk of potential liability from product liability lawsuits that this proposed new rule would create, generic drug manufacturer’s obligations would also increase. Generic manufacturers would need to have systems in place to determine whether new literature and adverse event information, among other things, met an appropriate level to require a label change strengthening a warning or updating safety information. Most generic drug manufacturers are not set up to for this extensive analysis. This type of change could escalate the cost of generic drugs. Furthermore, another downside to the rule is that generic manufacturers, who are not as experienced and do not have the resources for pharmacovigilance departments, will end up diluting the label with unnecessary warnings. In short, the new rule could water down the effect of real warnings in product labels.

Proponents of the new proposed rule argue that it will ensure the most up to date safety information and create parity between generic makers and their brand-name counterparts. 

The proposed rule will undoubtedly be challenged. The biggest challenge will be to whether or not the FDA has authority to implement such a rule. The proposed FDA regulation would allow temporary differences in the labels of brand name drugs and the corresponding generic products, which some argue violates the Hatch-Waxman Act, which mandates sameness in labeling, i.e., that the generic and brand labeling must always be the same.  Opponents of the proposed new rule argue that the FDA is usurping the authority of Congress by venturing in their territory. 

The FDA’s position of course is that there is no conflict with Hatch-Waxman and they have authority to promulgate this rule. Even under current regulations, if the brand name manufacturer strengthens its labeling through a CBE supplement, there is a brief period of time where the warnings do not match. Now, the FDA proposed rule would allow the flip side. The generic manufacturer could unilaterally strengthen its warnings, just as the brand-name manufacturer can do now. Upon FDA approval of the CBE supplement by the generic manufacturer, the brand-name manufacturer would then be required to make the same labeling update as the generic. If the FDA disapproves, the generic drug manufacturer must revert back to the previous label. As such, the discrepancy between the labels is only for a short period of time.

The proposed rule was published in the Federal Register on Nov. 13, 2013 and interested parties have 60 days to comment. The proposed rule can be found here.