The US Court of Appeals for the Fifth Circuit has held that a consumer’s state law “failure to warn” claims against a generic-drug manufacturer are not impliedly preempted by federal law. The Fifth Circuit’s decision in Demahy v. Actavis, Inc., follows on the heels of the Eighth Circuit’s decision last month in Mensing v. Wyeth, Inc., reaching the same conclusion. (For more information about Mensing, see Mayer Brown’s Client Alert “Eighth Circuit Holds ‘Failure To Warn’ Claims Against Generic Manufacturers Not Preempted by Federal Law.”)

In Demahy, the plaintiff alleged that her long-term use of the generic version of Reglan® (a prescription drug used to treat certain gastric conditions) caused her to develop a neurological condition called tardive dyskinesia. In addition to other tort claims, she asserted that Actavis, the manufacturer of her generic drug, was liable for failing to sufficiently warn of the risk of developing tardive dyskinesia. Actavis moved to dismiss on the ground that the claims were based on state law duties that conflicted with federal requirements, and were therefore impliedly preempted by federal law. The district court denied the motion as to the failure-to-warn claim, and the drug maker’s appeal to the Fifth Circuit followed.

The Fifth Circuit affirmed, holding that state law failure-to-warn claims against generic manufacturers are not generally preempted by the federal laws governing generic drugs. The court took its cue from the Supreme Court’s recent ruling in Wyeth v. Levine that such claims against brand-name drug makers are not generally preempted. As the Supreme Court had in Levine, the Fifth Circuit began its analysis with a presumption against preemption, and emphasized that the manufacturer, not the FDA, bears primary responsible for drug labeling. The “central premise” of the federal drug regulations, the court stated, was that manufacturers—name-brand and generic alike—retain primary responsibility for the content of their labels. Under the federal regulatory regime, manufacturers are charged with ensuring that their warnings remain adequate.

Against this backdrop, the Fifth Circuit rejected Actavis’s argument that it would be impossible for generic manufacturers to comply with state-imposed duties to strengthen warning labels while simultaneously complying with federal regulations. Actavis contended that because federal law requires generic manufacturers to use the same label as their brand counterparts, they may not update their labels unilaterally. Actavis thus argued that federal law requires only that the brand-name manufacturer revise a drug’s labeling as soon as there is reasonable evidence that the drug is associated with a serious hazard.

The Fifth Circuit disagreed, concluding that, although a generic’s label must initially conform to the brand drug’s label in order to receive FDA-approval, federal law does not bar the generic manufacturer from making modifications to the labeling following approval. Instead, once additional risks to the drug emerge, federal law did not preclude the generic manufacturer from taking steps to change the label to provide adequate warnings. According to the court, Actavis could therefore have complied with both FDA regulations and state law by updating its labeling, proposing to update its labeling or warning health care providers directly.

The court also justified its ruling by noting that a holding that claims against a generic manufacturer were preempted, although claims against the name-drug manufacturer were not, would lead to “the bizarre conclusion that Congress intended to implicitly deprive a plaintiff whose doctor prescribes a generic drug of any remedy, while under Levine, that same plaintiff would have a state-law claim had she only demanded a name brand drug instead.”

To date, Demahy and Mensing are the only two appellate decisions since the Supreme Court’s decision in Levine to address preemption for generic-drug manufacturers. As the Demahy court pointed out, however, the issue “has split a rapidly growing number of district courts,” and appeals “involving materially identical preemption claims are now pending before the Sixth Circuit.”

If you have any questions or require specific advice on any matter discussed in this Client Alert, please contact Henninger S. Bullock at +1 212 506 2528, or Daniel L. Ring at +1 312 701 8520.