Supreme Court silences Novartis

High court declines to hear case questioning whether punitive damages should be awarded in product liability lawsuits

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WASHINGTON, D.C.—On Oct. 7, the U.S. Supreme Court declined to hear a case brought by Novartis Pharmaceutical Corp. in which the global pharma argued that punitive damages should not be awarded by juries in product liability lawsuits.
Novartis had hoped to convince the high court that such penalties encroach on the ability of the U.S. Food and Drug Administration (FDA) to enforce its authority, but the court declined to hear the case without comment.
The facts of the case date back to 2001, when Rita Fussman, a breast cancer patient in Chapel Hill, N.C., was prescribed Aredia and later Zometa, after cancer metastasized to her bones. Aredia and Zometa are injectable bisphosphonate drugs made by Novartis and prescribed to prevent cancer-related bone loss. In 2002, Fussman had two teeth extracted and claimed to have developed osteonecrosis of the jaw (ONJ). In 2006, Fussman and her husband, Herbert, sued Novartis in the U.S. District Court, alleging that Novartis knew about the risk of ONJ, but failed to adequately warn about the risk. The case was transferred to the Aredia/Zometa multidistrict litigation in the Middle District of Tennessee, then remanded for trial. Rita Fussman died during the litigation.
In 2010, a jury in the U.S. District Court for the Middle District of North Carolina awarded Herbert Fussman $1.25 million in compensatory and punitive damages. Novartis appealed, arguing that the judge erred in admitting into evidence a series of 2004 emails between Novartis and two doctors on the ONJ risk factors linked to bisphosphonates. The company also said the judge should have barred from evidence data on a 2007 change in the Zometa warning label which contained tougher language on jaw damage, compared with the 2003 label that was used when Fussman was prescribed the drug. Novartis further argued that the Supreme Court’s drug preemption ruling in Wyeth v. Levine (2009) allowed only compensatory damages, and was silent about punitive damages.
The Fourth Circuit U.S. Court of Appeals affirmed the verdict, finding that “based on the evidence presented, the court concludes that sufficient evidence was presented to support a finding by the jury, by clear and convincing evidence, that Novartis managers intentionally concealed the risk of ONJ and attempted to subvert the medical inquiry regarding the risks of ONJ, all with the knowledge and approval of high-ranking officials within the company. In addition, the evidence would support the conclusion that Novartis managers took this course of action for purely financial reasons, in order to protect its marketing of bisphosphonate drugs.”
Novartis filed a petition for a writ of certiorari in the case, Novartis Pharmaceuticals Corp. v. Herbert Fussman, in May.
Federal law grants drug manufacturers exclusive rights to market prescription drugs in the United States if the manufacturers meet the detailed requirements imposed by the federal Food, Drug and Cosmetic Act (FDCA). Federal law further provides that the FDA has the exclusive authority to enforce or restrain any violations of the conditions for marketing approval. The FDCA authorizes the FDA under defined conditions to withdraw a manufacturer’s right to market a previously approved prescription drug, but only after extending due process protections against deprivation of federally bestowed rights, including prior notice and an opportunity for hearing.
Novartis asked the court to rule on whether the FDA’s exclusive authority to punish violations of federal law governing the lawful marketing of prescription drugs preempts state tort law, which allows the imposition of punitive damages to punish the same activity. The company also asked the court to decide whether a punitive damages award imposed in connection with the marketing of an FDA-approved drug impermissibly penalizes a drug manufacturer under state law for the exercise of its federal right to market the prescription drug. Finally, Novartis questioned whether the Fourth Circuit Court erred in basing its holding solely on Levine, which did not address punitive damages.
But attorneys for Fussman argued in a brief to the court that “the punitive damages here were not awarded to punish Novartis for violating FDA requirements. They were awarded to punish Novartis for deception and disregard that caused significant pain and injury to Mrs. Fussman and to deter such conduct in the future. An award in these circumstances is fully consistent with the FDA’s goal of protecting patients from harmful drugs and its objective that a drug’s labeling disclose adverse events associated with it.” They further noted that the appeals courts have not been divided on the issue, suggesting there is no judicial disagreement over whether punitive damages awards should be preempted.
Without commenting, the Supreme Court declined the petition for a writ of certiorari, and remanded the case to the U.S. Court of Appeals for the Fifth Circuit for further consideration in light of Descamps v. United States.
The case is considered a watershed one for the pharma industry because it was the first from the multidistrict litigation in federal courts to be tried, and the only case in which a plaintiff presented evidence for punitive damages. As a result, the current decision may impact hundreds of other lawsuits that Novartis faces.
“We are disappointed that the U.S. Supreme Court has denied the Novartis petition and that we won’t have the opportunity to present our case to the court at this time,” said Novartis Spokeswoman Julie Masow in a statement. “The ability for juries to impose punitive damages against FDA-compliant manufacturers of prescription drugs threatens the availability of necessary and often life-saving medications for patients around the world. Novartis believes that the Fussman petition took an important first step in raising this issue with the court, and we anticipate that the court will address the arguments raised in the petition in the future.”

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