Ted Frank has already briefly discussed this important decision, and I thought it might be useful to elaborate a bit here. I want to summarize the facts, the holding, the dissent, and the implications of the decision as I see them.
1. The underlying facts and the legal issue on appeal
-In 1978, the FDA approved a nonsteroidal antiinflammatory pain reliever (NSAID) called "sulindac" under the brand name Clinoril. When Clinoril's patent expired, the FDA approved several generic versions of sulindac, including one manufactured by Mutual Pharmaceutical.
-In a very small number of patients, NSAIDs--including sulindac (Clinoril®, etc), ibuprofen (Advil®, etc.), naproxen (Aleve®), and Cox2-inhibitors (Celebrex®, etc)--have the rare serious side effect of causing hypersensitivity skin reactions characterized by necrosis of the skin and the mucous membranes: toxic epidermal necrolysis (Lyell's Syndrome) in more or less severe form. This rare, life-threatening skin condition consists of the top layer of skin (the epidermis) detaching from lower layers of the skin (the dermis) all over the body.
-In December 2004, New Hampshire resident Karen Bartlett was prescribed Clinoril for shoulder pain. Her pharmacist dispensed a generic equivalent manufactured by Mutual Pharmaceutical. Ms. Bartlett soon developed an acute case of toxic epidermal necrolysis. The results were horrific. Sixty to sixty-five percent of the surface of her body was burned off or turned into an open wound. She spent months in a medically induced coma, underwent 12 eye surgeries, and was tube-fed for a year. She is now severely disfigured, has a number of physical disabilities, and is nearly blind.
-Bartlett sued Mutual Pharmaceutical for compensation for her injuries, on the grounds that the sulindac it manufactured was defective and unreasonably dangerous. Bartlett complained about two things: the warning on the defendant's sulindac (what I call "informational defect" in my book on Products Liability, and the chemical composition of its drug ("design defect").
-At the time respondent was prescribed sulindac, the drug's label did not specifically refer to toxic epidermal necrolysis, but did warn that the drug could cause "severe skin reactions" and "[f]atalities." However, Stevens-Johnson Syndrome (a lesser form of Lyell's Syndrome) and Lyell's Syndrome (aka toxic epidermal necrolysis) were listed as potential adverse reactions on the drug's package insert. In 2005, after Bartlett was already a victim, the FDA recommended changes tothe labeling of all NSAIDs, including sulindacs, to more explicitly warn against toxic epidermal necrolysis.
-the federal District Court that heard the case dismissed Bartlett's failure-to-warn (informational defect) claim because her doctor, to whom the duty to warn is owed where prescription drugs are concerned, had admitted "that he had not read the box label or insert." [In other words, a more thorough warning on the label would have made no difference.] But he let the design defect claim go to the jury, and after a 2-week trial, it granted over $21 million in damages to Ms. Bartlett. The First Circuit Court of Appeals affirmed, and Mutual appealed the design defect liability to the Supreme Court.
-The Supreme Court, in PLIVA, Inc. v. Mensing (2011), had previously held that state failure-to-warn (informational defect) liability of generic manufacturers are pre-empted by federal law: to wit, by the Food, Drug and Cosmetic Act (FDCA)'s prohibition of any changes to generic drug labels as compared with the branded drug label. But Bartlett argued that her design defect claim was not covered by the logic of Pliva, since generic manufacturers could escape liability for producing a defective drug by simply choosing "not to make the drug at all." This was the issue before the court: does the logic of Pliva apply to design defect claims?
2. The Court's holding
-A bare majority of the court held that the logic of Pliva does indeed extend to design defect claims. In this case, however, redesign of the drug was not possible for two reasons. First, the FDCA requires a generic drug
to have the same active ingredients, route of administration, dosage form and strength as the brand-name drug on which it is based. Second, because of sulindac's simple composition, the drug is in any case chemically incapable of being redesigned.
-The label is part of the design of a drug, but as Pliva held, "[f]ederal drug regulations, as interpreted by the FDA, prevented the Manufacturers from independently changing their generic drugs' safety labels."
-Of course, no law actually forced Mutual to manufacture any sulindac at all. It could have complied with federal and state laws by closing up shop. But this was also the case for the manufacturer in Pliva, and the Court there was unimpressed with the argument that federal law did not preempt state law because a manufacturer could comply with both by ceasing to manufacture. Thus, the logic of Pliva compels that it be extended to design defect cases.
-Justice Breyer, in dissent, found the FDA's work on this issue to be insufficiently studied, and therefore decided to accept the claim that Mutual could have satisfied both federal and state law by going out of business. He would not have accepted the claim had he approved of the FDA's work.
-Justice Sotomayor, also in dissent, claimed that Pliva only addressed failure-to-warn (informational defect) claims, not design defect claims. According to her, "nothing in Mensing, nor any other precedent, dictates finding ... pre-emption here." How so? Because Mutual could have made its product with the same warning and the same composition as the branded drug, as required by law, and then "compensate consumerswho were injured by an unreasonably dangerous drug." Thus Mutual was not forced to violate either state or federal law.
-Justice Sotomayor's dissent is clearly specious, and the majority was correct to gently chide her for in actuality saying that Bartlett should recover because she was grievously injured. Sympathy for an injured party is not sufficient for tort liability, President Obama's exhortations to the contrary notwithstanding. Indeed, Justice Sotomayor's dissent makes a mockery of Pliva, for there too the generic manufacturer could have published the required warning and then paid liability damages. The only competent way to read Sotomayor's dissent is as a repudiation of Pliva, without the honesty of saying so. It is embarrassing that Justice Ginsburg joined this lawless opinion, and it is, I suppose, perversely comforting that Justices Breyer and Kagan repudiated it by insisting, pragmatically, that they would evaluate each FDA action according to their own second-guessing of its thoroughness, following the logic of Pliva or not depending on their sovereign discretion.
-It is clear now that only manufacturing defect (i.e., the generic drug was not made correctly, was diluted or contaminated, etc) is available to those suing the manufacturers of generics. Perversely, this gives more rights to plaintiffs suing brand-name manufacturers than to those suing off-patent producers. The former remain liable for manufacturing, informational and design defects, while the latter are only liable for manufacturing issues. Clearly, this is a weird equilibrium, as it reduces the brand-name manufacturer's profits relative to the generic maker's. The former of course bears all development and testing costs, while the latter "free-rides". At the margin, this may encourage drug makers to select generic manufacturing instead of R and D. Sooner or later, I think, either Pliva and Bartlett will have to be repudiated, or (much more likely) the logic of their protection will have to be extended to informational and design defect cases against the makers of brand-name drugs, repudiating cases such as Wyeth v. Levine.