Big brand pharma on the hook for generic problems

Will Alabama turn into a judicial hellhole for the drug industry? To listen to Pfizer and the trade group that represents the US drug industry, a recent ruling by the Alabama Supreme Court almost guarantees such an outcome. Why? The court ruled that Pfizer can be sued by a man who claimed he was injured by a generic version of its Reglan (metoclopramide) heartburn medicine. And the drug maker purportedly failed to warn physicians about the risks.

The 8 to 1 decision has brand-name drug makers on edge. This is one of the few instances in which a court has found that a brand-name drug maker can be sued even though a consumer had taken a generic, suggesting that consumers will be encouraged to file still more such lawsuits, especially in the wake of a 2011 ruling by the US Supreme Court that has limited claims against generic drug makers.

In that ruling, the US Supreme Court decided generic drug makers are not required to strengthen labeling if alerted to side effects, even when the same change has not been made to the labeling for the branded medicine. The decision has meant that generic drug makers cannot be sued for not alerting patients to such risks.

The issue in this case is whether an Alabama man named Danny Weeks can sue Pfizer for not warning about the risks of long term use. Weeks had taken a generic version of Reglan between 2007 and 2009, and later developed tardive dyskinesia, which causes incurable and involuntary muscle movements. However, the drug was never approved for use for longer than 12 weeks.

But pressing a lawsuit was not such an easy matter. Under current US Food and Drug Administration regulations, generic drug makers cannot update labeling, even if they become aware of a potential risk not mentioned in their labeling. Brand-name drug makers, though, can update labeling. In other words, the generic drug maker is required only to match its labeling to brand-name labeling.

The Alabama Supreme Court, however, saw things differently and noted in its decision that “an omission or defect in the labeling for the brand-name drug would necessarily be repeated in the generic labeling, foreseeably causing harm to a patient who ingested the generic product.” In effect, the court was giving consumers an option that the US Supreme Court had recently precluded.

And this is what has upset Pfizer, which has asked the state Supreme Court to hold a rehearing. “The dramatic implications of its decision . . . makes brand-name drug manufacturers the insurers of the entire prescription-drug market—liable for injuries caused by products they did not make,” Pfizer wrote in its court brief.

“If allowed to stand, the court’s decision will radically alter the financial realities of drug innovation, forcing brand-name manufacturers to anticipate that, after their period of exclusivity has expired, they will, nonetheless, be responsible for an ever-growing generic market over which they have no control and from which they derive no profit.”

Attorneys for Weeks, however, maintain that Pfizer and the Pharmaceutical Research Manufacturers of America, the industry trade group, are overstating the case and trying to generate a groundswell of sympathy for their cause. The drug maker, in fact, rallied the US Chamber of Commerce to its side; the organization filed a brief with the state court to express similar worries.

This is not the first time the issue has gone to court. In fact, more than five dozen cases—nearly all of them involving Reglan—have been decided in 23 states in favor of Pfizer. Overall, Pfizer counts 78 decisions applying the law of 25 different states that have ruled that brand-name drug makers may not be held liable, on any theory, for injuries caused by products they did not manufacture.

“This is almost a Chicken Little response,” says Lew Garrison, who represents Weeks. “A suit has to have an Alabama plaintiff and Alabama physician. The courts are not going to be besieged by people from all over the country who are claiming a violation of Alabama law when they don’t live in Alabama and their physician doesn’t practice in Alabama and they didn’t take the drug in question in Alabama.

“But they’re trying to paint this other picture to the court and it’s totally disingenuous. They’re trying to make it appear that this is some far-reaching Pandora’s Box that will open up and every such lawsuit will come to Alabama. It’s not going to happen. What they’re worried about is other states doing the same kind of thing and make it a state-by-state situation. That’s really their concern.”

In other words, now that the Alabama court has issued such a ruling, industry may fear other state courts would issue similar rulings. But laws vary from state to state. In Alabama, for instance, the law allows third party fraud, which means that a third party defrauded by another party, which knew the victim would rely on certain representations, has a claim. This is the type of claim filed by Weeks.

Basically, his attorneys have argued that Pfizer suppressed information about the risks of Reglan that it knew existed from the prescribing physician. But if those risks had been revealed, Garrison says, the physician could have been prevented from prescribing the drug to Weeks. In Alabama, he notes, third party fraud has generally not been used to deal with medicines.

As of now, Alabama has not been considered the likeliest venue for consumer lawsuits against drug makers. Typically, states such as New Jersey are home to enormous amounts of litigation because so many drug makers are either headquartered there or maintain large facilities. In short, the companies have a large business presence that is conducive to pursuing a lawsuit.

This explains why consumers from around the United States flock to New Jersey to bring their claims. Yet New Jersey regularly makes the rankings of a list that is compiled each year by the American Tort Reform Foundation, which advocates tightening US laws governing consumer lawsuits.

“There are various venues that are thought to be favorable to plaintiffs, but pharmaceutical companies are in most every state in some fashion,” says Kate Greenwood, a research fellow and lecturer in law at the Seton Hall Law School Center for Health and Pharmaceutical Law and Policy. She also previously worked at the Covington and Burling law firm, which has a drug industry practice.

“Certainly, plaintiffs’ lawyers can find a state resident to file a suit and go to districts where the law is seen as favorable. At the same time, it’s true that Alabama doesn’t have a direct effect on every single case or other states. Here, branded manufactures feel this would be a significant expansion of liability and one that would be difficult for them to manage. I don’t think they’re bluffing. There seems to be real concern. And there’s a philosophical divide—for them, it’s just wrong. ”

So what happens next? Now that Weeks has won the right to press his lawsuit, the case heads back to a federal court in Alabama. And if Pfizer loses, the drug maker would almost certainly appeal and so the possibility exists that the drug industry will want to pursue the matter all the way to the US Supreme Court.

Meanwhile, the arguments might get derailed altogether. After the US Supreme Court ruling in 2011 that prevented consumers from filing lawsuits against brand-name drug makers, consumer advocates petitioned the US Food and Drug Administration to revise its regulations so that generic drug makers can update product labeling to warn patients about risks associated with their drugs and patient safety can be protected.

“Drug safety would benefit if generic manufacturers—who already have access to real-world information about adverse events—could use FDA procedures currently in place for brand-name manufacturers to revise labeling to warn of risks,” the Public Citizen Health Research Group maintained at the time it filed its petition. “Filling this regulatory gap would help to protect patients.”

The FDA apparently decided there was merit to the argument. In February, shortly before Pfizer asked the Alabama Supreme Court to rehear its case, the US Department of Justice disclosed in a court filing in an unrelated case that the FDA is preparing to revise its regulations in a way that would allow generic drug makers to change their labeling in “appropriate circumstances.”

For its part, the FDA has not publicly discussed its plans or what the revision may look like. And it is not clear what is meant by “appropriate circumstances.” But If the FDA were to make such a change in regulations, generic drug makers could be sued in state courts, if they become aware of evidence of serious side effects but do not take action to update their product labeling. And that might let the Pfizers of the world off the hook.