Brand-name drug makers ask Ala. SC to rehear case over 'innovator liability'

MONTGOMERY, Ala. (Legal Newsline) -- One of the world's largest pharmaceutical companies is asking the Alabama Supreme Court to reconsider a ruling it made last month, holding that a brand-name drug maker can be held liable for injuries from a generic version.

Late Monday, brand-name manufacturer Pfizer Inc., along with Wyeth LLC and Schwarz Pharma Inc., filed a motion asking the state Supreme Court to rehear the case.

The defendants are asking the Court to reconsider its earlier decision, reject "innovator liability" and, at a minimum, to hear oral arguments.

In their 13-page application, the manufacturers admit that rehearing is "reserved for extraordinary cases." However, "the decision here is extraordinary by any measure," they wrote.

"In adopting the novel 'innovator liability' theory, the opinion... makes Alabama a magnet for personal injury lawsuits that other states' courts would refuse," they wrote in the motion.

Last month, the state's high court answered in the affirmative the question of whether a brand-name drug manufacturer, based on statements made in connection with the manufacture or distribution of the brand-name drug, may be liable to a plaintiff who has claimed injury from a generic version of the brand-name drug.

The U.S. District Court for the Middle District of Alabama certified the following question to the Court:

"Under Alabama law, may a drug company be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture or distribution of a brand-name drug, by a plaintiff claiming physical injury from a generic drug manufactured and distributed by a different company?"

By an 8-1 margin, the Court answered affirmatively.

Justice Michael Bolin wrote the majority opinion, released Jan. 11. Justice Glenn Murdock filed a dissent, which wasn't released until Feb. 4.

The question arose out of a federal court case in which plaintiffs Danny and Vicki Weeks filed an action against five current and former drug manufacturers for injuries that Danny Weeks allegedly suffered as a result of his long term use of prescription drug Reglan.

Reglan is most often used to treat gastric esophageal reflux disease, or GERD.

The Weeks claimed that only two companies, Teva Pharmaceuticals USA and Actavis Elizabeth LLC, manufactured and sold the generic of Reglan that Danny Weeks ingested.

The plaintiffs also conceded Danny Weeks did not take Reglan manufactured by the three brand-name defendants Wyeth, Pfizer and Schwarz.

"The brand-name defendants moved to dismiss the claims against them, arguing, among other things, (1) that the Weekses' claims, however pled, are in fact product liability claims that are barred for failure of 'product identification' and (2) that they had no duty to warn about the risks associated with ingestion of their competitors' generic products," according to the 52-page majority opinion.

In March 2011, the district court granted in part and denied in part the brand-name defendants' motion, holding that the Weekses might be able to state a claim for relief under Alabama law if they could prove that the brand-name manufacturers had a duty to warn Weeks's physician about the risks associated with long-term use of brand-name Reglan and, further, that the Weekses, as third parties, had a right to enforce an alleged breach of that duty.

The court then certified the question to the state Supreme Court.

"As noted in the facts set out in the request for a certified question," Bolin wrote for the majority, "other federal courts applying Alabama law have held that Alabama law does not allow a person who consumed a generic version of a brand-name drug to sue the brand-name manufacturer based on fraudulent misrepresentation."

However, the justice wrote, "The Weekses are not arguing that the Wyeth defendants owed them a duty. Instead, they are arguing that the Wyeth defendants owed a duty to Danny Weeks's physician and that, under the learned-intermediary doctrine, they are entitled to rely on the representations made to their physician."

He continued, "A brand-name manufacturer is well aware of the expiration of its patent and well aware that a generic version of the drug will be made when the patent expires... A brand-name manufacturer could reasonably foresee that a physician prescribing a brand-name drug (or a generic drug) to a patient would rely on the warning drafted by the brand-name manufacturer even if the patient ultimately consumed the generic version of the drug."

Bolin explained that in the present case, the plaintiffs alleged that Danny Weeks's physician "reasonably relied" on the representations made by the Wyeth defendants regarding the long-term use of Reglan in prescribing the drug to him.

"In other words, the Weekses are arguing that if a defendant's misrepresentation to a third party causes the third party to take actions resulting in the plaintiff's injuries, then the factual causation link is satisfied and that, here, a misrepresentation to Danny's physician would directly impact the medical care received by Danny," the justice wrote for the majority.

"The principle behind the learned-intermediary doctrine is that prescribing physicians act as learned intermediaries between a manufacturer and the consumer/patient and that, therefore, the physician stands in the best position to evaluate a patient's needs and to assess the risks and benefits of a particular course of treatment for the patient."

Bolin said a prescription drug manufacturer fulfills its duty to warn the ultimate users of the risks of its product by providing adequate warnings to the learned intermediaries who prescribe the drug.

"However, if the warning to the learned intermediary is inadequate or misrepresents the risk, the manufacturer remains liable for the injuries sustained by the patient," he wrote. "The patient must show that the manufacturer failed to warn the physician of a risk not otherwise known to the physician and that the failure to warn was the actual and proximate cause of the patient's injury."

The Court therefore determined that under Alabama law a brand-name drug company may be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture of a brand-name prescription drug, by a plaintiff claiming physical injury caused by a generic drug manufactured by a different company.

"FDA regulations provide that a generic-drug manufacturer's labeling for a prescription drug must be exactly the same as the brand-name-drug manufacturer's labeling," Bolin noted.

"In the context of inadequate warnings by the brand-name manufacturer placed on a prescription drug manufactured by a generic-drug manufacturer, it is not fundamentally unfair to hold the brand-name manufacturer liable for warnings on a product it did not produce because the manufacturing process is irrelevant to misrepresentation theories based, not on manufacturing defects in the product itself, but on information and warning deficiencies, when those alleged misrepresentations were drafted by the brand-name manufacturer and merely repeated by the generic manufacturer."

The manufacturers argue in their motion for rehearing that the Court should have, at least, held oral arguments in the case.

They contend the full Court also did not have the "benefit" of reviewing Murdock's dissent before issuing its majority opinion.

Murdock, in his 45-page dissent, said there is "no good outcome" in the case.

"In fairness to the main opinion, this Court has been put in a position from which we cannot give an answer that yields a just result for both plaintiffs and defendants in cases such as this," he wrote.

But it was the "economic realities" and "certain bedrock principles of tort law" that compelled him to dissent, he said.

Murdock noted that almost every one of the 47 reported cases decided before the U.S. Supreme Court's decision in PLIVA Inc. v. Mensing -- including cases decided by two federal appeals courts -- held that a manufacturer of a brand-name drug has no duty to the consumer of a generic drug manufactured and sold by another company.

In Mensing, the nation's high court held that state law tort claims against manufacturers of generic drugs are preempted by federal law.

Only three courts, Murdock points out, including the court certifying the questions in this case, have held otherwise.

"Since the Supreme Court's 2011 decision in PLIVA, every one of the 11 cases that have addressed the issue, including decisions by three United States Circuit Courts of Appeals, has reached this same conclusion," the justice wrote.

The answer, Murdock contends, is not the imposition of tort-law liability on a brand-name manufacturer to a consumer with whom the manufacturer has no relationship, in regard to a drug it did not manufacture or sell.

"The answer, if there is to be one, lies at the federal level, where the problem has been created," he wrote.

The manufacturers agree with Murdock's take on the case.

"[T]he Court is alone in concluding that Mensing supports innovator liability: Every other court to consider that suggestion -- 16 in all, including three U.S. Courts of Appeals -- has rejected it," they wrote.

"By disregarding key precedents and unexpectedly saddling the brand-name defendants with open-ended liability, the majority opinion violates due process."

In addition to the motion for rehearing, six separate entities on Monday filed amicus briefs in support of the manufacturers' request, fearing the ramifications of the Alabama Court's decision may be felt in other industries in the state and across the country.

They include: the U.S. Chamber of Commerce, the Business Council of Alabama, the Alabama Policy Institute, the Pharmaceutical Research and Manufacturers of America, the Product Liability Advisory Council, and the Alabama Defense Lawyers Association.

"The Court's [opinion] threatens to unleash the plaintiff bar's most creative and damaging suits on all businesses in Alabama -- particularly those in Alabama's burgeoning automotive, aerospace and health-care industries," the Chamber wrote in its 16-page brief.

The Institute for Legal Reform, an affiliate of the U.S. Chamber, owns Legal Newsline.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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