MADISON, N.J.—In a decision that could have significant ramifications for the pharmaceutical industry, the U.S. Supreme Court on March 4 ruled that the Food and Drug Administration's (FDA) approval of the anti-nausea medication Phenergan and its warning label does not protect Wyeth Pharmaceuticals from being sued. Although analysts predicted that the decision could increase the number of drugmaker liability lawsuits and spur tougher drug warnings, the stocks of pharmaceutical companies showed little reaction to the news.
Following news of the court's decision on March 4, the Amex Pharmaceutical Index, which as been down 15 percent this year, was up 2 percent on a strong day for the overall market. Wyeth shares rose 1.8 percent to $40.98.
The high court's 6-3 decision in Wyeth v. Levine rejected Wyeth's claim that it cannot be sued for damages in state courts if a product and its label have been approved by the FDA. The case concerned Diana Levine, a Vermont woman who lost a hand and forearm to gangrene after Phenergan was inadvertently injected into an artery during a so-called "push IV injection." Phenergan's label included the push method of administration but warned of risks, including gangrene, if the drug were injected into an artery.
Levine sued, arguing Phenergan's labeling was unsafe, and a Vermont jury awarded her $6.8 million in damages subsequently upheld on appeal by the Vermont Supreme Court. Wyeth challenged the judgment and asked the Supreme Court to set the verdict aside because it had complied with FDA labeling rules.
But the Supreme Court upheld findings by the lower court that the warnings were insufficient. Justice John Paul Stevens wrote in the majority opinion that the history of the federal law on drugs shows that Congress did not intend to bar failure-to-warn lawsuits that are based on state law. The decision also rejected Wyeth's claim that a 2006 FDA regulation expressing concern about the impact of state failure-to-warn lawsuits on federal regulation should mean that such cases are barred. The High Court said that since Congress has not authorized a federal agency directly to preempt state lawsuits, the court would give less weight to FDA's views on that issue.
Justice Samuel A. Alito Jr., joined by Chief Justice John G. Roberts Jr., and Justice Antonin Scalia, dissented, stating, "this case illustrates that tragic facts make bad law."
"The court holds that a state tort jury, rather than the Food and Drug Administration, is ultimately responsible for regulating warning labels for prescription drugs," the dissenting justices wrote. "To be sure, state tort suits can peacefully coexist with the FDA's labeling regime, and they have done so for decades. But this case is far from peaceful coexistence. The FDA told Wyeth that Phenergan's label renders its use 'safe.' But the State of Vermont, through its tort law, said: 'Not so.'"
In a statement, Wyeth called the ruling "disappointing, not only for Wyeth, but for patients and public health in general." Patients are best served by a national standard for the labeling of prescription medications set by the FDA's medical and scientific experts, the company asserted. When lay juries are permitted to second-guess the experts at FDA on the benefits and risks of particular medicines, the result is uncertainty for patients and doctors alike about how and when to use prescription drugs, added Bert Rein, an attorney from Wiley Rein, a Washington D.C. law firm representing Wyeth.
"Wyeth's labeling of Phenergan provided clear instructions and warnings about its use, including clear warnings about the very risk at issue in this case," Rein stated. "The medical and scientific experts at FDA are in the best position to weigh the benefits and risks of a medicine and to assess how those benefits and risks should be described in the product's label."
Wyeth no longer sells the injectable form of Phenergan, but it does market tablets and suppositories of the medicine.
The opinion does not completely close the door on the use of implied conflict preemption as a defense to state law tort claims in pharmaceutical cases and/or beyond, but it does seem to significantly narrow the chances of success with such a defense, says Stephanie M. Rippee, a shareholder in the law firm Baker Donelson who focuses her practice on the defense of pharmaceutical, medical device and life science companies in both products liability and commercial litigation.
"The Supreme Court makes it clear that the viability of an implied preemption defense will depend on specific evidence of Congressional intent with respect to the statute at issue, and that the comments of the regulatory agency involved may or may not be given deference depending on the context in which they were made," Rippee says. "Here, the court found that the evidence demonstrated Congress did not intend the warnings provisions of the Food Drug and Cosmetic Act and the corresponding regulations to preempt state law tort claims alleging inadequate product warnings, and thus such suits do not interfere with the Congressional purpose of entrusting drug labeling decisions to an expert agency. Significant to the court's decision was its premise that a drug manufacturer, rather than the FDA, is the master of its product's labeling and bears responsibility for the labeling content at all times. The court found it significant that the regulations did provide a mechanism for the company to change its label first and then later seek FDA approval."
Gregory Conko, senior fellow at the Competitive Enterprise Institute, says the case establishes the troubling precedent that a sympathetic jury can now supersede the expert opinions of drug makers, physicians and the FDA on what qualifies as adequate safety labeling.
"It would have been one thing if new evidence of risk had arisen since FDA approved the label, or if Wyeth were accused of hiding information from the FDA or misrepresenting the data it did provide," Conko says. "But that is decidedly not the case here. Indeed, the negligent act that actually caused Ms. Levine's unfortunate injury was not an IV push injection into a vein, but the physician's assistant's negligent administration. The physician's assistant injected Phenergan in such a way that it came into contact with Ms. Levine's arterial blood despite six label warnings against this very risk. The physician's assistant also administered a dose twice as high as indicated on the drug's label and continued to push in the plunger despite Ms. Levine's protestations of pain, again in direct contravention of an explicit label warning. More or sterner warnings regarding the risks of intravenous injection would not have prevented Ms. Levine's injury."
Conko argues that the Supreme Court should have held in Wyeth's favor with a narrowly tailored opinion confined to the facts of the case.
"Doing so would not have insulated wrong-doers from punishment, but would have recognized that Congress gave FDA statutory authority over questions of safety and efficacy because it believed that only a federal expert body could effectively balance the benefits and risks of new medicines," he says. "As Justice Alito's dissent makes clear, 'the ordinary principles of conflict preemption turn solely on whether a state has upset the regulatory balance struck by the federal agency.' That is exactly what has happened here. So, not only is the majority's decision bad policy, it's also bad law."
Many analysts predicted that the decision to permit state damage suits will give consumers another avenue of redress for injuries and force drug manufacturers to exercise greater care in production and labeling.
"Pharmaceutical companies will need to be more vigilant in updating the safety warnings on their drug labels as the manufacturer bears responsibility for the content of its label at all times," said Cowen & Co. analyst Steve Scala.
Following news of the court's decision on March 4, the Amex Pharmaceutical Index, which as been down 15 percent this year, was up 2 percent on a strong day for the overall market. Wyeth shares rose 1.8 percent to $40.98.
The high court's 6-3 decision in Wyeth v. Levine rejected Wyeth's claim that it cannot be sued for damages in state courts if a product and its label have been approved by the FDA. The case concerned Diana Levine, a Vermont woman who lost a hand and forearm to gangrene after Phenergan was inadvertently injected into an artery during a so-called "push IV injection." Phenergan's label included the push method of administration but warned of risks, including gangrene, if the drug were injected into an artery.
Levine sued, arguing Phenergan's labeling was unsafe, and a Vermont jury awarded her $6.8 million in damages subsequently upheld on appeal by the Vermont Supreme Court. Wyeth challenged the judgment and asked the Supreme Court to set the verdict aside because it had complied with FDA labeling rules.
But the Supreme Court upheld findings by the lower court that the warnings were insufficient. Justice John Paul Stevens wrote in the majority opinion that the history of the federal law on drugs shows that Congress did not intend to bar failure-to-warn lawsuits that are based on state law. The decision also rejected Wyeth's claim that a 2006 FDA regulation expressing concern about the impact of state failure-to-warn lawsuits on federal regulation should mean that such cases are barred. The High Court said that since Congress has not authorized a federal agency directly to preempt state lawsuits, the court would give less weight to FDA's views on that issue.
Justice Samuel A. Alito Jr., joined by Chief Justice John G. Roberts Jr., and Justice Antonin Scalia, dissented, stating, "this case illustrates that tragic facts make bad law."
"The court holds that a state tort jury, rather than the Food and Drug Administration, is ultimately responsible for regulating warning labels for prescription drugs," the dissenting justices wrote. "To be sure, state tort suits can peacefully coexist with the FDA's labeling regime, and they have done so for decades. But this case is far from peaceful coexistence. The FDA told Wyeth that Phenergan's label renders its use 'safe.' But the State of Vermont, through its tort law, said: 'Not so.'"
In a statement, Wyeth called the ruling "disappointing, not only for Wyeth, but for patients and public health in general." Patients are best served by a national standard for the labeling of prescription medications set by the FDA's medical and scientific experts, the company asserted. When lay juries are permitted to second-guess the experts at FDA on the benefits and risks of particular medicines, the result is uncertainty for patients and doctors alike about how and when to use prescription drugs, added Bert Rein, an attorney from Wiley Rein, a Washington D.C. law firm representing Wyeth.
"Wyeth's labeling of Phenergan provided clear instructions and warnings about its use, including clear warnings about the very risk at issue in this case," Rein stated. "The medical and scientific experts at FDA are in the best position to weigh the benefits and risks of a medicine and to assess how those benefits and risks should be described in the product's label."
Wyeth no longer sells the injectable form of Phenergan, but it does market tablets and suppositories of the medicine.
The opinion does not completely close the door on the use of implied conflict preemption as a defense to state law tort claims in pharmaceutical cases and/or beyond, but it does seem to significantly narrow the chances of success with such a defense, says Stephanie M. Rippee, a shareholder in the law firm Baker Donelson who focuses her practice on the defense of pharmaceutical, medical device and life science companies in both products liability and commercial litigation.
"The Supreme Court makes it clear that the viability of an implied preemption defense will depend on specific evidence of Congressional intent with respect to the statute at issue, and that the comments of the regulatory agency involved may or may not be given deference depending on the context in which they were made," Rippee says. "Here, the court found that the evidence demonstrated Congress did not intend the warnings provisions of the Food Drug and Cosmetic Act and the corresponding regulations to preempt state law tort claims alleging inadequate product warnings, and thus such suits do not interfere with the Congressional purpose of entrusting drug labeling decisions to an expert agency. Significant to the court's decision was its premise that a drug manufacturer, rather than the FDA, is the master of its product's labeling and bears responsibility for the labeling content at all times. The court found it significant that the regulations did provide a mechanism for the company to change its label first and then later seek FDA approval."
Gregory Conko, senior fellow at the Competitive Enterprise Institute, says the case establishes the troubling precedent that a sympathetic jury can now supersede the expert opinions of drug makers, physicians and the FDA on what qualifies as adequate safety labeling.
"It would have been one thing if new evidence of risk had arisen since FDA approved the label, or if Wyeth were accused of hiding information from the FDA or misrepresenting the data it did provide," Conko says. "But that is decidedly not the case here. Indeed, the negligent act that actually caused Ms. Levine's unfortunate injury was not an IV push injection into a vein, but the physician's assistant's negligent administration. The physician's assistant injected Phenergan in such a way that it came into contact with Ms. Levine's arterial blood despite six label warnings against this very risk. The physician's assistant also administered a dose twice as high as indicated on the drug's label and continued to push in the plunger despite Ms. Levine's protestations of pain, again in direct contravention of an explicit label warning. More or sterner warnings regarding the risks of intravenous injection would not have prevented Ms. Levine's injury."
Conko argues that the Supreme Court should have held in Wyeth's favor with a narrowly tailored opinion confined to the facts of the case.
"Doing so would not have insulated wrong-doers from punishment, but would have recognized that Congress gave FDA statutory authority over questions of safety and efficacy because it believed that only a federal expert body could effectively balance the benefits and risks of new medicines," he says. "As Justice Alito's dissent makes clear, 'the ordinary principles of conflict preemption turn solely on whether a state has upset the regulatory balance struck by the federal agency.' That is exactly what has happened here. So, not only is the majority's decision bad policy, it's also bad law."
Many analysts predicted that the decision to permit state damage suits will give consumers another avenue of redress for injuries and force drug manufacturers to exercise greater care in production and labeling.
"Pharmaceutical companies will need to be more vigilant in updating the safety warnings on their drug labels as the manufacturer bears responsibility for the content of its label at all times," said Cowen & Co. analyst Steve Scala.
