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High court hands win to drugmakers in preemption case

Posted On: May. 28, 2019 7:00 AM CST

Pharma ruling

Pharmaceutical manufacturers scored a victory in a unanimous Supreme Court ruling last week that said judges, not juries, must decide whether state law failure-to-warn claims are preempted by federal law, experts say.

The court’s May 20 ruling in Merck Sharp & Dohme Corp. v. Albrecht et al., also discussed the standard that must be met for state law claims to be preempted by federal law. But the Supreme Court remanded the case rather than deciding itself whether the plaintiffs’ litigation was preempted.

Having judges rather than juries decide preemption is “a big win for pharmaceutical companies” because it “is going to make the process of resolving these questions much more efficient,” said Stephen A. Miller, co-chair of white collar defense and investigations at Cozen O’Connor in Philadelphia.

The case involves Fosamax, a drug manufactured by Kenilworth, New Jersey-based Merck that treats and prevents osteoporosis, a weakening of the bones that can lead to fractures by postmenopausal woman.

When the U.S. Food and Drug Administration first approved of the drug’s manufacture and sale in 1995, the label did not warn of the then-speculative risk that the drug could cause rare “atypical femoral” fractures, according to the ruling.

In 2008, Merck approached the FDA about revising its label to address this issue. The FDA rejected Merck’s proposal, stating the company’s “justification” for the change was “inadequate,” but invited the firm to resubmit its application.

Merck withdrew its application instead, and a warning about “atypical femoral fractures” did not appear on the Fosamax label until 2011, when the FDA ordered the change based on its own analyses, according to the ruling.

The more than 500 plaintiffs in the litigation had taken the drug and suffered atypical femoral fractures between 1999 and 2010. They argued Merck had had a legal duty to warn them and their doctors about the risk of these fractures. Merck, in its defense, argued state law failure-to-warn claims should be dismissed as preempted by federal law.

A ruling by the U.S. District Court in Trenton, New Jersey in Merck’s favor was vacated in 2017 by the 3rd U.S. Circuit Court of Appeals in Philadelphia, which held in part that the preemption issue must be decided by a jury.

“We here decide that a judge, not the jury, must decide the preemption question,” said the Supreme Court ruling. “This “should produce greater uniformity among courts,” which is a virtue when determining the scope and effect of federal agency action, the court said.

In addition, citing its 1980 ruling in Wyeth v. Levine, the Supreme Court said for state law claims to be preempted, a drug manufacturer must show the FDA did not approve a proposed change to a drug’s label.

“This opinion protects access to justice for injured patients,” David C. Frederick, a partner with Kellogg, Hansen, Todd, Figel & Frederick PLLC in Washington and the case’s plaintiff attorney, said in a statement.

It “makes clear that preemption can be established only by a formal FDA action prohibiting the manufacturer from changing its warning label to add any adequate warning under state law,” he said.

Merck said in a statement it was pleased with the Supreme Court’s confirmation of its position that preemption should be decided by a judge, and that it “remains fully committed to defending these cases going forward and will continue to present evidence that it acted appropriately at all times in regard to the potential risk of atypical femur fractures.” 

“It’s a great ruling for companies. It’s a great ruling for all defendants that can assert preemptions,” said James R. Beck, senior life sciences policy analyst with Reed Smith LLP in Philadelphian.

It avoids situations where the jury must decide between well-paid, dueling experts, and will lead to more informed rulings, with many more preemption issues decided on motions to dismiss and summary judgment, Mr. Beck said.

 “It’s going to dramatically speed up the resolution of these questions, and probably take away some of the leverage that plaintiffs might get in settlement discussions,” Mr. Miller said.

Adam Zimmerman, a law professor at Loyola Law School in Los Angeles, said, “The court gave the defense at least a limited victory” in holding judges should handle preemption issues.

But, he added, it might be a slight victory for plaintiffs as well, with at least six members of the court articulating a “pretty high bar” to assert preemption as a defense.

He added, “We’re still left with this uncertain sense of how the standard will apply in future cases,” because the court remanded the case to the lower courts rather than applying it itself.

But the decision “provides some procedural clarity,” which has not necessarily been there in the past, said Kimberly Branscome, a partner with Kirkland & Ellis LLP in Los Angeles.

Peter S. French, a partner with Taft Stettinius & Hollister LLP in Indianapolis, said, “The Supreme Court is telling manufacturers that they have the ability to modify their warnings without prior approval by the FDA, and that they probably need to do that” to justify preemption.

He said, also, “We’ll have to see how the facts develop in the further proceedings before the trial court to see whether it’s a victory for either side.”