Prescription Drug Manufacturer Liability For Generics – Are Changes on the Horizon?


By Yvonne Flaherty

According to IMS Institute for Healthcare Informatics, Americans now spend $370 billion for prescription drugs each year. The vast majority of these prescriptions, over 80 percent according to a recent IMS report, are for generic drugs. As many popular brand name drugs go off-patent in the upcoming years, and as consumers and health plans shift toward the lower cost drugs, this number is unlikely to significantly decrease any time soon. While the increased availability, and use, of generic drugs provides benefit to some (including financial benefit to certain consumers, insurers and manufacturers of the generic drugs), it does not come without risk.

According to Donald W. Light in “New Prescription Drugs: A Major Health Risk With Few Offsetting Advantages,” unfortunately, over 2.74 million people suffer serious adverse events from properly prescribed drugs each year. However, generic manufacturers (unlike the manufacturers of the brand name drugs) are not allowed to independently update their labels (often known as the package insert) to warn of newly discovered side effects. Specifically, federal law does not allow the makers of generics to change the safety warnings on their labels in response to new information until the maker of the branded equivalent has done so and the change has received approval from the Food and Drug Administration. See 21 CFR 314.150(b)(10)).

These regulations have been the subject of much debate, and frustration, for consumers injured by these drugs. Indeed, two recent United States Supreme Court cases have considered the issue of whether consumers have any legal recourse for a manufacturer’s failure to warn of known adverse events. In Wyeth v. Levine, the court held that federal law does not preempt state law failure-to-warn claims based on a brand name drug’s labeling. The court reaffirmed that it was “a central premise of federal drug regulation that the manufacturer bears responsibility for the content of its label at all times.” Wyeth v. Levine, 555 U.S. 555 (2009). However, two years later, in Pliva v. Mensing, the court held federal law does preempt state law failure-to-warn claims which assert that a generic drug’s labeling did not contain an adequate warning.

As a result of the decisions in Wyeth v. Levine and Pliva v. Mensing, an individual’s ability to bring a product liability action for failure to warn generally turns on whether the individual took the brand name or generic version of the drug. In short, if the injury was caused by a generic version of the drug, there is little, if any, recourse for the injured consumer. In response, the FDA unveiled a new proposed rule in November 2013 which would require generic drug manufacturers to promptly update labeling to include new safety information using the changes being effected (CBE) process. See 78 FR 67985 (Nov. 13, 2013). This proposed change would promote timely communication of safety information to patients and physicians and afford consumers of generic prescription drugs with the same protections and rights of their brand name counterparts. However, the FDA’s proposed rule also faces opposition. The manufacturers of generic drugs oppose the rule, and have said it could open them up to billions of dollars in legal liabilities and increased pharmacovigilance monitoring costs. The industry has also called into question the legality of the proposed rule, saying the Hatch-Waxman Act of 1984 prohibits the agency from taking this action. See Supplemental Comments of the Generic Pharmaceutical Association regarding Docket FDA- 2013-N-0500: Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, April 27, 2015.

The FDA sought comments from the public on the proposed rule, and the initial comment period closed March 13, 2014. However, in a federal register notice published Feb. 17, 2015, the FDA advised that it was reopening the comment period in response to the significant amount of interest in its proposal and the emergence of alternate proposals put forth by the generic pharmaceutical industry. See supplemental-applications-proposing-labeling-changes- for-approved-drugs-and-biological-products. The FDA also conducted a one-day public meeting in March 2015 and the renewed comment period closed April 27, 2015. Id. While no final decision has been made on the FDA’s proposed rule or the alternatives proposed by the generic pharmaceutical industry, it is clear that consumers, health care professionals and the industry believe a change is imminent. What that change will be, and the consequences of that change, remain to be seen.

Yvonne Flaherty is a partner at Lockridge Grindal Nauen P.L.L.P. and leads the firm’s drug and device department. She focuses her practice on the representation of injured parties in complex litigation against pharmaceutical and medical device manufacturers, as well as class actions involving product defect claims.