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Supreme Court Further Limits Product-Liability Suits on Generic Drugs

Source: Dow Jones

Posted on 25 Jun 2013 by Neilson

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Product liabilityAn ideologically divided U.S. Supreme Court on Monday further limited the rights of consumers to bring product-liability lawsuits against generic-drug makers.

The court, in a 5-4 ruling, overturned a $21 million judgment won by a New Hampshire woman who suffered severe injuries allegedly caused by a generic anti-inflammatory drug, sulindac, manufactured by Takeda Pharmaceutical Co.'s Mutual Pharmaceutical Co. unit.

Karen L. Bartlett, who took the drug for shoulder pain, suffered severe burns over much of her body and is nearly blind. The court's opinion explained her ordeal in detail: She spent months in a medically induced coma, was tube-fed for a year and underwent a dozen eye surgeries.

Justice Samuel Alito, writing for the court's conservative justices, said the case arose out of tragic circumstances, but sympathy for Ms. Bartlett "does not relieve us of the responsibility of following the law."

Justice Alito said the lawsuit, based on state law, was barred by federal drug regulations. Chief Justice John Roberts and Justices Antonin Scalia, Anthony Kennedy and Clarence Thomas joined the opinion.

The decision follows an earlier 2011 Supreme Court ruling that shielded generic-drug makers from lawsuits alleging they inadequately labeled their products, also by reasoning federal rules prevented a liability suit brought under state law.

The latest case involved a different type of product-liability claim, based on allegations that the drug was unreasonably dangerous and therefore designed defectively.

A Boston-based appeals court had ruled that Ms. Bartlett's damages award could stand despite the earlier Supreme Court labeling ruling, saying Mutual Pharmaceutical wasn't protected from the lawsuit because it could have chosen not to sell the generic drug at all.

The Supreme Court rejected that reasoning, saying the company was "not required to cease acting altogether in order to avoid liability."

In dissent, Justice Sonia Sotomayor said the court's ruling was "hard to accept," and wrongly expanded the scope of cases in which lawsuits brought under state laws are preempted by federal regulations.

"The court has left a seriously injured consumer without any remedy," Ms. Sotomayor wrote in a dissent joined by Justice Ruth Bader Ginsburg. Justices Stephen Breyer and Elena Kagan also dissented.

Neither Mutual Pharmaceutical nor a lawyer for Ms. Bartlett immediately responded to requests for comment.

As they did in the 2011 Supreme Court case, generic-drug makers argued that they have no option to change the labeling or design of their drugs because federal law requires that generic medicines be the same as the brand-name versions.

While the Supreme Court has been receptive to arguments by generic-drug makers, the justices have allowed product-liability lawsuits against the makers of branded drugs. Critics have argued that it makes little sense that a consumer's right to sue depends upon whether he took a brand-name drug or a generic equivalent.