United States: Dear Doctor: Big Changes Are Being Effected – The 4th Branch of Government to the Rescue of Tort Claimants

Last Updated: November 9 2013
Article by Michael A. Walsh

Today the director of the Food and Drug Administration's (FDA) Center for Drug Evaluation and Research (CDER), Janet Woodcock, M.D., posted an announcement of a proposed rule illustrating that FDA will go where the United States Congress and the Supreme Court could not go. The FDA's proposed rule, entitled "Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products," allows/requires "generic drug manufacturers to independently update and promptly distribute revised product labeling - just like brand name manufacturers - before FDA reviews or approves the change." 

This rule would permit the generic manufacturer to have a label that differs from that of the reference listed (or branded) drug. To avoid confusion over differing labeling, the FDA proposes to "establish a dedicated Web page (or, alternatively, to modify an existing FDA Web page) on which FDA would promptly post information regarding the labeling changes."  This is a significant departure from how labeling information is disseminated.

This proposed rule opens the door to requiring generic manufacturers to sit in the same position for labeling purposes and product liability purposes as the brand drug manufacturer. The proposed rule allows generic manufacturers to make what were known as Changes Being Effected (CBE) that now can only be made by the referenced listed (i.e. branded) drug manufacturer and to send Dr. Doctor letters informing physicians of label changes. The proposed CBE rule will require the generic manufacturer to add or strengthen information about dosage, abuse, dependence, psychological effect, or over dosage, to increase the safe use of the drug product, and to delete false, misleading, or unsupported indications for use or claims for effectiveness. It is precisely these types of claims that the Courts have recognized that generic manufacturers cannot make under the current law and which serve as the basis for dismissing thousands of product liability lawsuits. 

Under the proposed rule a generic manufacturer must make labeling changes

when new information becomes available that causes information in labeling to be inaccurate, the application holder must take steps to change the content of its labeling.  ... A drug is misbranded in violation of the FD&C Act when its labeling is false or misleading, or does not provide adequate directions for use and adequate warnings.

According to the FDA "[t]he proposed rule would create parity among application holders with respect to such labeling changes by permitting holders of abbreviated new drug applications (ANDAs) to distribute revised product labeling that differs in certain respects... from the labeling of its reference listed drug (RLD) upon submission to FDA of a "changes being effected" (CBE-0) supplement." FDA states that the reason for the new rule is:

...to remove an unnecessary impediment to prompt communication of the most important safety-related labeling changes (e.g., boxed warnings and contraindications) for drug products with labeling in the PLR format.

To implement the new rule, the FDA will now require generic manufacturers:

...to develop written procedures for the surveillance, receipt, evaluation, and reporting of post marketing adverse drug experiences to FDA.   Application holders must promptly review all adverse drug experience information obtained or otherwise received by the applicant from any source, foreign or domestic, including information derived from commercial marketing experience, post marketing clinical investigations, post marketing epidemiological/surveillance studies, reports in the scientific literature, and unpublished scientific papers, and comply with applicable reporting and recordkeeping requirements.

Does the FDA Have the Power to Make This Change?

The proposed rule goes on at length to establish that the FDA has the power to make this rule change, stating, among other things:

In Pliva v. Mensing, the Supreme Court recognized that "Congress and the FDA retain the authority to change the law and regulations if they so desire" Recently, in Mutual Pharmaceutical Co.,Inc. v. Bartlett, the Court indicated that "Congress' decision to regulate the manufacture and sale of generic drugs in a way that reduces their cost to patients but leaves generic drug manufacturers incapable of modifying either the drugs' compositions or their warnings" contributed to the outcome in that case (preemption of the tort claim against the generic manufacturer). 

Congress Never Got Around To Dealing With Preemption

In Mensing the Court correctly noted that Hatch Waxman struck a balance to provide cheap, not less expensive, life-saving therapy to patients. In the aftermath of the Supreme Court holding in Mensing foreclosing failure to warn claims against generic drug manufacturers on the grounds that the generic manufacturers are powerless to make label changes, Sen. Leahy submitted a draft bill entitled the "Patient Safety and Generic Labeling Improvement Act"  to amend the Food Drug and Cosmetic Act to add to the New Drug provisions under section 505 (21 U.S.C. Sec. 355) as follows:

Notwithstanding any other provision of this chapter, the holder of an application approved under subsection (j) [ANDA] may change the 'Warnings' section of the labeling of a drug so approved in the same manner as the holder of an approved new drug application under subsection (b), unless the Secretary prescribes by rule another manner.

FDA is Coming to the Rescue of Tort Claims

Irrespective of whether Congress struck a poor balance or wasn't thinking at all about generic manufacturer liability or state law failure to warn lawsuits in enacting Hatch-Waxman, in the nearly 30 years since Hatch Waxman has been in existence, Congress has not seen fit to view this "dissimilar statutory scheme" as inconsistent with its intent by enacting legislation or to rewrite the calculus for generic drug prices. In the Supreme Court opinion in Bartlett, the dissent refers to a "dissimilar statutory scheme" as a "gap" in the federal regulations stating:

[FDA] "faces significant resource constraints that limit its ability to protect the public from dangerous drugs...[t]ort suits can fill the gaps in federal regulation by 'serving as a catalyst to identify previously unknown drug dangers..." [and] "Manufacturers who have greater 'access to information about their drugs' than the FDA retain the ultimate responsibility for the safety of the products they sell.

Whether the statutory authority granted the FDA in 21 USC 371 is sufficient for FDA to create a regulatory solution to fill the "gap" and create tort parity between Levine (where lawsuits survive against brand manufacturers) and Mensing (where lawsuits are dismissed against generic manufacturers) remains to be seen, but there is little doubt that FDA is taking the up the mantle of tort claimants and flexing its might as the Fourth Branch of Government.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Michael A. Walsh
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