How to buck preemption in drug cases.

When the Supreme Court ruled that a state fraud-on-the-FDA claim was impliedly preempted by federal law in the medical device case Buckman Co. v. Plaintiffs' Legal Committee (1) in February, the Court expressed concern that the "burden" of complying with state tort law "regimes," in addition to the Food and Drug Administration's (FDA) extensive regulatory requirements, might overwhelm medical device manufacturers. While the Court did not say so explicitly, pharmaceutical company defendants have asserted the same concern many times in pharmaceutical product litigation. Already, some defense lawyers claim that Buckman extends preemption beyond medical device litigation to pharmaceutical products liability cases. (2)

This is a concern for plaintiff lawyers because, like medical devices, pharmaceutical products are also regulated before, during, and after their introduction to the U.S. market, and the interactions between a pharmaceutical company and the FDA are unavoidable in discovery. Knowing what the FDA regulations do and do not require will permit plaintiff lawyers to develop pharmaceutical products liability cases without running head first into a preemption defense.

The FDA issues discussed in this article should be considered relevant, indeed unavoidable, in a strict liability or failure-to-warn cause of action arising solely under state tort law.

The large number of recent drug market withdrawals has proven that the FDA is not infallible. (3) More worrisome, perhaps, is that even when a company willfully violates the federal Food, Drug, and Cosmetic Act (FDCA), there is no private cause of action under those laws and no mechanism for the FDA to recover or distribute compensatory damages to victims. (4) When the FDA does recover damages, the money is paid into the U.S. Treasury.

However, recent mass pharmaceutical tort litigations--such as those stemming from use of Baycol, PPA, Rezulin, and Propulsid and the diet drugs Redux and Pondimin (5)--have proven that FDA-related issues are relevant to state tort law claims, even when these issues are not intended as private causes of action under the FDCA. (6)

In many cases, pharmaceutical companies have portrayed the FDA regulatory scheme broadly in order to maintain a one-on-one relationship with the agency, artificially bolster the arguments for preemption of state law tort claims, and exonerate pharmaceutical companies from fulfilling their obligations to medical professionals and consumers. The issue is not whether state tort law regimes are "burdensome" to pharmaceutical companies. It is that pharmaceutical companies, by complying only with the FDCA and FDA regulations, are failing to protect consumers from harm.

Discovery issues

Pharmaceutical companies communicate frequently with the FDA regarding Investigational New Drug (IND) issues, such as clinical trial protocols and conduct; New Drug Applications (NDAs); manufacturing procedures; product labeling; and adverse event reporting. Dozens of company employees and FDA officials and their advisers, experts, and consultants will spend years accumulating information about a particular pharmaceutical product. Both the FDA and the drug company will generate volumes of documentation.

When products liability litigation begins--and the documents are collected and the witnesses are identified--it quickly becomes obvious that all of those regulatory interactions are relevant.

Even when a products liability cause of action does not specifically reference the statutes, regulations, and policies contained in or implemented under the FDCA, those regulatory interactions cannot simply be ignored. In every recent mass tort pharmaceutical liability case, the drug manufacturers have argued, as an affirmative defense, that the FDA knew and approved of what the company was doing. Similarly, plaintiff attorneys--especially in cases alleging a state law failure-to-warn products liability claim--have argued, for example, that defendants failed to properly -report known adverse events to the FDA, resisted labeling changes suggested by the agency, or buried warnings through intentional misrepresentations.

Surprisingly, the FDA has little interest in assisting with pharmaceutical products liability litigation. The agency discourages "diverting agency resources" to address issues in private litigation, even when those issues might also suggest violations of the FDCA. One might think that the FDA would like to know what went wrong under its watch.

To the contrary, the agency seems determined to ignore allegations of company misconduct. For example, during the Orthopedic Bone Screw Product Liability Litigation, (7) the FDA ultimately decided that allegations of company, agency, employee, and advisory committee member misconduct--as claimed in a citizen petition submitted to the agency by plaintiff attorneys--were irrelevant to the agency's final decision to reclassify pedicle screw devices. (8) More often, when the FDA has conducted internal investigations and reached its own conclusions, its findings focus on what the agency could do better next time. (9)

Under the Federal Tort Claims Act (FTCA), the FDA need never answer to consumers in court. The FTCA says the government can be sued only "under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred." (10) The act does not apply to conduct that is uniquely governmental--incapable of performance by a private individual--such as new drug approval. Furthermore, the FTCA is limited by a discretionary function exception, which bars a claim based on an agency's exercise of its discretion, such as drug approval, whether or not that discretion was abused. (11)

In products liability litigation, however, plaintiff and defense lawyers, courts, and juries will closely examine all a pharmaceutical company's interactions with the FDA and reach their own conclusions. The defense will portray the FDA as omnipotent and well informed by the company; the plaintiffs will portray the FDA as harried, inept, overburdened, and misinformed.

Liability issues

The regulatory issues that arise during pharmaceutical products liability cases, outlined below, have become fairly predictable. Most of these issues relate to state law negligence, strict liability, and failure-to-warn causes of action. In addition, they may be relevant to establishing notice and wanton or reckless misconduct for punitive damages claims.

Pre-approval. Before submitting an NDA, a pharmaceutical company will typically have had years of regulatory contacts with the FDA regarding the course of clinical studies. These communications directly address what a company knows and learns about the safety and effectiveness of the drug.

Before they can conduct clinical studies of unapproved new drugs in the United States, companies must file an IND application with the FDA and file required safety and annual reports. (12) The clinical trial protocols, informed consent forms, and especially the Clinical Investigator Brochures present basic risk information.

If a serious adverse event occurs during the clinical trial, and there is a reasonable possibility that it was caused by the drug, the pharmaceutical company does not need to file a special safety report with the FDA but must include the adverse event in the annual report. (13)

If the adverse event is not considered serious or related to the drug, it need not be reported to the FDA at all. A clinical investigator would be less likely to determine that the event stemmed from the use of the drug if the risk had not been described in the IND documents. Thus, FDA regulations discourage inclusion of all risks in the IND documents and encourage the mischaracterization of some serious events.

Questions that must be addressed in litigation include:

* Is every risk known by the pharmaceutical company adequately described in the IND documents?

* What do the preclinical studies indicate are the possible risks of the drug?

* Are certain adverse events or clusters of events, if they are not detailed in the IND documents, still being reported? Or are they simply being marginalized?

* Has every serious adverse event been properly reported?

In addition, companies are supposed to "promptly review" safety information from any source, foreign or domestic, (14) but what, if anything, is actually being reported to the FDA?

Treatment INDs, sometimes known as Compassionate Use INDs, let clinical investigators treat individual patients with an experimental drug outside of a formal trial setting. (15) In general, the FDA believes such treatments do not generate meaningful data on the safety or effectiveness of the products involved.

However, some pharmaceutical companies create Treatment IND programs covering hundreds or thousands of patients. How are all those ad hoc clinical investigators learning about the drug? Plaintiff lawyers could argue that these Treatment IND "programs" become a form of illegal pre-approval promotion.

They should also question whether the company is engaging in other illegal pre-approval promotion: Is it creating a market for a drug by convincing medical professionals that a particular disease or condition exists and/or that it should be treated with drug--one for which it seeks approval?

During the IND stage, a company will have frequent contacts with the FDA about the clinical trials being conducted and, in discovery, the defense will produce records from dozens of such meetings. Plaintiff lawyers should investigate what FDA suggestions, if any, the company is resisting and why. What was said, and by whom, at meetings with the FDA? Plaintiff lawyers should also investigate misrepresentations by the company.

NDA approval. To market a new drug in the United States, a company must first receive FDA approval of a New Drug Application. (16) It is a complex process involving negotiation.

By carefully reviewing the NDA--all 500 boxes' worth--plaintiff lawyers can gather valuable information. The Integrated Summary of Safety (ISS), the Integrated Summary of Effectiveness (ISE), and the Safety Update will indicate the company's official position on the drug's risks and benefits. All the company's submissions to the agency, including the NDA, must be viewed as advocacy documents. FDA documents, such as the Medical Officer's Review, can provide invaluable contrast and indicate differences of opinion regarding a drug's benefits and risks.

The FDA generally asks its advisory committee to make a recommendation about approval of a new drug. Committee members, although experts in their fields, are often ill informed about the risks and benefits of the drugs they review. Nevertheless, the statements of the pharmaceutical company and others at these meetings also demonstrate that evaluating a drug's benefits and risks is not as simple as the final FDA approval might indicate.

The Endocrine and Metabolic Drugs Advisory Committee meetings on Redux (Dexfenfluramine), for example, illustrate how the approval process can be manipulated: When the initial advisory committee meeting resulted in a mixed vote, the FDA arranged for a second meeting that had a more favorable outcome for the company. (17)

There has been much debate about whether, as a result of the Prescription Drug User Fees Act, (18) "priority review" of NDAs by the FDA has led to bad decisions. (19) Perhaps it has. On a more basic level, it raises questions about whether the FDA had adequate time to look at or ask for data, to resolve differences of opinion, and to question the company's assertions.

The FDA must find "substantial evidence" of effectiveness and "adequate" evidence of safety to issue final approval to a new drug. (20) Plaintiff lawyers should investigate other factors that might have contributed to the approval decision, such as politics, consumer demand, and company lobbying. The FDA may have made other determinations during the approval process that affected how the product was marketed. For example, was marketing limited to "responders" (the subset of patients for whom the drug worked well) because the drug was useful only to that group? How did the final FDA-approved use differ from what the company originally proposed? Did the patient population studied differ from that suggested in the approved labeling?

Following a tentative approval decision, pharmaceutical companies will try to negotiate with the FDA over the final drug labeling. The plaintiff lawyer should examine what warnings were ultimately negotiated for the labeling and marketing materials, as they often set the tone for future marketing.

Post-approval. Since most consumer injuries don't occur during clinical trials but rather after a product is launched, products liability litigation usually focuses on the company's interactions with the FDA after approval--often those regarding product labeling and marketing.

Every promotional piece the company intends to use must be submitted to the FDA, although almost none of them are actually reviewed by the agency. (21) When the FDA's Division of Drug Marketing, Advertising, and Communications (DDMAC) does issue a Notice of Violation (NOV) letter (22) alleging, for example, that a company's ad lacks a "fair balance" of risks and benefits, promotes unapproved uses, or overstates effectiveness, the agency may be saying that the product is misbranded under the FDCA. But it is also affirming that the company has failed to notify prescribers and users of serious risks.

The approved indication of a drug is carefully worded to limit its use to those patients most likely to benefit. Of course, responsible medical professionals can prescribe "off-label" uses for drugs. But widespread off-label use may be the result of years of misrepresentations by the company, overpromotion, or promotion of the off-label use. The off-label use may be the subject of an NDA supplement that the FDA found "not approvable" under the FDCA.

Adverse events that occur after a new drug is released must be reported to the FDA "whether or not considered drugrelated." (24) However, the company is not required to immediately report some adverse events, such as nonserious ones or known risks included on the label. (24) Plaintiff lawyers should investigate what the pharmaceutical company knew but did not discuss with the FDA--whether it reported certain events and omitted others--and the criteria used to determine which events were expected or serious. (25)

The Department of Health and Human Service's Office of the Inspector General estimated that in 1994, companies reported 33 percent of drug-related deaths, based on data from the Pharmaceutical Researchers and Manufacturers Association. Other studies have estimated that pharmaceutical companies report only 1 percent to 10 percent of adverse events. (26)

The FDA inspects the adverse-event surveillance systems of pharmaceutical companies. Plaintiff lawyers should examine the Form 483s and Establishment Inspection Reports of the agency's inspection results. These forms may indicate problems with the company's handling of adverse events.

Except in the case of fast-track approval (which differs from priority review), (27) the FDA has only limited statutory authority under the FDCA to compel a company to conduct a post-approval safety study. But the agency often requires safety studies as a condition of approval, to address issues unresolved at the time. (28) Nevertheless, these studies are rarely completed promptly and might never be completed at all. (29) The FDA cannot compel a company to conduct a clinical study once the drug is approved.

Pharmaceutical companies should conduct prospective safety studies when new safety issues are discovered. Instead, they often spend substantial amounts on studies to establish new uses and expand the market for the drug. Sometimes these studies are ghostwritten, published in major medical journals under the names of paid consultants, and distributed as promotional materials. The Washington Legal Foundation has recently petitioned the FDA, asking it not to prevent pharmaceutical companies from disseminating off-label use information found in "enduring materials" such as medical textbooks and reprints of peer-reviewed medical journal articles. (30)

Since the procedure for removing a drug from the market is both extreme and difficult, (31) the FDA often requires labeling changes as a way to convey new risk information to prescribers. (32) During labeling discussions, agency requests for boxed warnings, "Dear Doctor" letters, and other serious warnings are often watered down or renegotiated, or the company resists or refuses such requests. FDA regulations expressly authorize drug companies to add warnings to their product labels and correct false and misleading labeling statements without prior FDA approval. (33) Do the companies do so?

Preemption issues

The FDCA differs from the Medical Device Amendments (MDA) of 1976 in one important respect: Federal laws regulating drug approval and distribution do not expressly preempt state law products liability causes of action. Most courts have held that mere compliance with FDA laws and regulations is not exculpatory. FDA standards have been described as minimum standards that the manufacturer must meet, and therefore are below the standard of care owed by the company to the ultimate consumer under various state tort laws. (34)

As regulatory documents in some products liability cases have shown, however, many pharmaceutical companies do view compliance with FDA regulatory standards as sufficient. Even when a company has violated those standards, the FDA has neither the resources nor the will to enforce the FDCA in every circumstance, or the agency may simply have exercised its enforcement discretion. (35) The agency issues hundreds of warning letters each year alleging violations of the act that it does not litigate. Although clear violations of the statute would seem relevant in products liability litigation, there is no private cause of action under the FDCA. (36) A company's regulatory conduct (such as an outright manipulation of clinical trial data submitted to the agency) is, however, a relevant factual matter in a plaintiff's case.

As noted above, the Supreme Court's recent decision in Buckman Co. v. Plaintiffs' Legal Committee (37) has reasserted the issue of preemption in state-law-governed drug liability litigation. The Court concluded:

   State-law fraud-on-the-FDA claims inevitably conflict with the FDA's
   responsibility to police fraud consistently with the agency's judgment and
   objectives. As a practical matter, complying with the FDA's detailed
   regulatory regime in the shadow of 50 states' tort regimes will
   dramatically increase the burdens facing potential applicants--burdens not
   contemplated by Congress in enacting the FDCA and the [Medical Device
   Amendments] ....

      In sum, were plaintiffs to maintain their fraud-on-the-agency claims
   here, they would not be relying on traditional state tort law which had
   predated the federal enactments in questions. On the contrary, the
   existence of these federal enactments is a critical element in their case.
   For the reasons stated above, we think this sort of litigation would exert
   an extraneous pull on the scheme established by Congress, and it is
   therefore preempted by that scheme. (38)

Buckman certainly suggests, consistent with previous cases holding that there is no private cause of action under the FDCA, that a fraud-on-the-FDA claim in the pharmaceutical context would be struck down. (39) However, courts have frequently determined that regulatory interactions, and even evidence of regulatory misconduct, are relevant to state law causes of action. (40)

In Globetti v. Sandoz Pharmaceutical Corp., (41) a Parlodel products liability case decided after Buckman, the court reached a rational conclusion:

   In the case before the court, plaintiff's claims ... do not arise "solely
   from the violation of the FDCA requirements." Defendant owed separate
   duties beyond simply full and fair disclosure to the FDA, duties not to
   market a defective and unreasonably dangerous product, not to misrepresent
   or suppress the facts needed by physicians and consumers to assess the
   safety of the product, and to adequately warn of known risks associated
   with it. These duties existed irrespective of the FDCA. Thus, while
   plaintiff cannot recover simply because defendant defrauded a federal
   agency, nothing in Buckman suggests that she cannot recover where the
   misrepresentations or suppression were directed at her (through her
   physician) or when the warning given (even though FDA approved)
   inadequately disclosed the hazards of the product. (42)

Preempting all state tort claims, regardless of whether the defendant violated the FDCA, would deny consumers any possibility of just compensation. When a pharmaceutical company does violate the FDCA--even if the FDA assessed civil penalties or brought criminal charges--the act simply does not give consumers any federal cause of action. Buckman suggests that plaintiff lawyers cannot even refer to FDCA violations in connection with state tort causes of action, but the Globetti court's approach is more realistic. The FDA is not the only victim when federal standards are violated, and pharmaceutical companies can injure consumers without violating the FDCA.

The Supreme Court's suggestion that "50 states' tort regimes will dramatically increase the burdens facing" pharmaceutical companies frames the issue incorrectly. First, the Court seems to be confusing the burden of litigation with the modest and justified burden of being truthful and cautious about the safe and effective use of prescription drugs. But more important, companies can and should do more than what the FDA demands. Perhaps liability concerns, if not human decency, would prompt these companies to train sales representatives to elaborate on product warnings and caution physicians against prescribing dangerous drugs unnecessarily.

Notes

(1.) 121 S. Ct. 1012 (2001).

(2.) See e.g., James M. Beck, FDCA Preemption of Common-Law Tort Claims Reinvigorated by the Supreme Court, FDLI UPDATE, Aug. 23, 2001 at 22.

(3.) See R. Hagar, Is the FDA's Fast Track Too Fast? (NBC Nightly News report Jan. 8, 2001).4. 21 U.S.C. [section] 321 et seq.(1998).

(5.) In re Diet Drugs (Dexfenfluramine, Fenfluramine, Phentermine) Prod. Liab. Litig., MDL 1203 (E.D. Pa. 2001); In re Rezulin Prod. Liab. Litig., MDL 1348 (S.D.N.Y. 2001); In re Propulsid Prod. Liab. Litig., MDL 1355 (E.D. La. 2001), available at propulsid.laed.uscourts.gov.

(6.) 21 U.S.C. [section] 321.

(7.) In re Orthopedic Bone Screw Prod. Liab. Litig., 176 F.R.D. 158 (E.D. Pa. 1997).

(8.) Orthopedic Devices: Classification and Reclassification of Pedicle Screw Spinal Systems, 21 C.F.R. pt. 888 (2001).

(9.) See, e.g., Acting Associate Director, Quality Assurance, Center for Drug Evaluation and Research, Food and Drug Administration, Quality Assurance Report--Rezulin Lessons Learned (Sept. 11, 2000); Institute of Medicine, Review of the Fialuridine (FIAU) Clinical Trials (1995).

(10.) 28 U.S.C. [section] 1346(b) (1998).

(11.) Id. [section] 2680(a).

(12.) Cf. 21 C.F.R. pt. 312 (2001)(relating to procedures for studying a new drug).

(13.) Id. at [section] 312.33.

(14.) Id. at [section] 312.32(b).

(15.) Id. at [section] 312.34.

(16.) Cf. 21 C.F.R. pt. 314 (relating to the procedures for obtaining FDA approval to market a new drug).

(17.) The transcript of these meetings can be downloaded from the FDA's Web site at www.fda.gov/ohrms/dockets/ac/redux.htm.

(18.) 21 U.S.C. [subsection] 379g-379h.

(19.) The FDA's priority review policy is set forth in the Center for Drug Evaluation and Research Manual of Policies and Procedures [section] 6020.3.

(20.) 21 U.S.C. [section] 355(d).

(21.) 21 C.F.R. pts. 201, 202, 314.

(22.) DDMAC issued more than 70 NOV letters in calendar year 2000 alone. See www.fda.gov/cder/warn/warn2000.htm.

(23.) 21 C.F.R. [section] 314.80.

(24.) Id.; see also Hamrell, Current Regulations and Practices for Adverse Event Reporting, 34 DRUG INFO. J. 975 (2000).

(25.) See Brown et al., Is That Adverse Experience Really Expected? Guidelines for Interpreting and Formatting Adverse Experience Information in the United States, 35 DRUG INFO. J. 269 (2001).

(26.) Office of the Inspector Gen., Dep't of Health and Human Servs., Review of the Food and Drug Administration's Handling of Adverse Event Reports (Dec. 1999).

(27.) Fast-track approval is designed to expedite use, but not approval, of drugs for life-threatening or severely debilitating diseases by providing a mechanism for conditional approval during the drug development process. See 53 Fed. Reg. 41516 (1988); 21 C.F.R. [subsection] 312.80-312.88.

(28.) G. Levitt et al., Human Drug Regulation, in FUNDAMENTALS OF LAW AND REGULATIONS II 179 (D. Adams ed., 1997).

(29.) Office of the Inspector Gen., Dep't of Health and Human Services, Postmarketing Studies of Prescription Drugs (May 1996).

(30.) Washington Legal Foundation, Citizen Petition Regarding Dissemination of Non-Misleading Information Concerning Off-Label Uses of FDA-Approved Products, FDA Docket 01P-0250, CP1 (May 30, 2001).

(31.) See M. Finkel, Phase IV Testing, 33 FOOD DRUG COSM. L.J. 181, 183 (1978).

(32.) David J. Graham et al., Liver Enzyme Monitoring in Patients Treated With Troglitazone, 286 JAMA 831 (2001).

(33.) 21 C.F.R. [section] 314.70(c).

(34.) Motus v. Pfizer, 127 F. Supp. 2d 1085 (C.D. Cal. 2000); see also Hill v. Searle Labs., 884 F.2d 1064, 1068 (8th Cir. 1989); Graham v. Wyeth Labs., 906 F.2d 1399 (10th Cir. 1990), cert. denied, 498 U.S. 981 (1990).

(35.) See Heckler v. Chaney, 470 U.S. 821 (1985).

(36.) Gile v. Optical Radiation Corp, 22 F.3d 540, 544 (3d Cir.), cert. denied, 513 U.S. 965 (1994) ("violations of the FDCA do not create private rights of action"). See also Bailey v. Johnson, 48 F.3d 965, 968 (6th Cir. 1995); In re Orthopedic Bone Screw Prod. Liab. Litig., 159 F.3d 817, 824 (3d Cir. 1998).

(37.) 121 S. Ct. 1012.

(38.) Id. at 1018, 1020.

(39.) On May 15, 2001, the Minnesota Court of Appeals affirmed a ruling that a state tort fraud-on-the-FDA claim in a pharmaceutical case (involving Pondimin) was preempted under Buckman. Flynn v. Am. Home Prods. Corp., 627 N.W. 2d 342, 349 (Minn. Ct. App. 2001).

(40.) See, e.g., Hatfield v. Sandoz-Wander, Inc., 464 N.E.2d 1105, 1109 (Ill. App. Ct. 1984) (lack of compliance with FDA regulations was admissible evidence in products liability case on the issue of failure to warn); Carlin v. Superior Court, 920 P.2d 1347, 1352-53 (Cal. 1996).

(41.) No. CV98-TMP-2649-S, 2001 WL 419160 (N.D. Ala. Mar. 25, 2001). Accord Dawson v. CibaGeigy Corp., 145 F. Supp. 2d 565 (D.N.J. 2001).

(42.) No. CV98-TMP-2649-S, 2001 WL 419160, at *2 (emphasis in original).

Section keeps members up to date on products liability law

Members of ATLA's Products Liability Section have the latest information on legal developments and litigation at their fingertips each time they log on to atla.org.

Information-sharing is a fundamental purpose of the section. A secure online document library ensures that member attorneys can gather the documents and information relevant to their products liability cases. They can download and upload documents on the section's home page, a link from www.atla.org/groups/sections.ht.

The section also serves as an educational and networking forum, offering members an opportunity to meet one another and learn about developments in products law during a seminar at ATLA's annual convention. This year's convention seminar in Montreal included lectures on hand tools, helmets, personal watercraft, and household products, among other topics.

"The section leadership is available to help members find answers to their questions, locate resources, and keep up to date on products law," said section Chair Donald Slavik of Milwaukee, Wisconsin. "I receive calls from members looking for experts and help on strategy, and asking questions about the ATLA Web site."

Members can contact one another via the section's list server discussion group. ATLA's 30 list servers are accessible to all section members.

A major goal of the section for the coming year is to finish compiling closing arguments by some of the nation's most successful products lawyers, Slavik said. The collection would be available to section members to emphasize the effectiveness of compelling summations in court.

Section members also receive the Products Liability Law Reporter (published 10 times a year), two section newsletters per year, and an annual directory.

The Products Liability Section currently has more than 1,900 members. Annual dues are $125. For more information, contact ATLA's Sections Department at [phone], ext. 312, or go to the section's brochure and application form online at www.atla.org/members/sections.ht.

Edward J. Parr Jr. practices law in New Orleans.