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High Court Mulls Drugmakers' Liability in Preemption Case

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By Mari Serebrov
Washington Editor

A lot of eyes were on the Supreme Court Tuesday as it considered arguments in Mutual Pharmaceutical Co. v. Bartlett, a case that could further define generic drug preemption or pave the way for more liability for all drugmakers.

The case pitted lawmakers and former FDA officials against the Solicitor General and industry groups, as Mutual argued to overturn a $21 million jury award to Karen Bartlett, who suffered life-threatening side effects after taking a generic sulindac (Clinoril) to ease shoulder pain. (See BioWorld Today, March 18, 2013.)

The Supreme Court agreed to hear Bartlett after the U.S. Court of Appeals for the First Circuit upheld the award, creating a circuit split. The First Circuit ruled that federal law doesn't preempt state design-defect claims involving generic drugs simply because manufacturers don't have to make copies of drugs that can cause serious side effects.

Some of the justices reiterated that point in their questioning. For instance, Justice Elena Kagan pointed out that nothing in the Federal Food, Drug and Cosmetic Act (FDCA) forces drugmakers to sell a particular product. Instead, the FDCA merely grants permission to market FDA-approved products. And Justice Samuel Alito questioned whether drugmakers would make some generics if they knew they would be on the hook for liability claims.

Chief Justice John Roberts made a distinction between Bartlett and previous drug cases in which a sharply divided court supported federal preemption. The concern in cases such as Wyeth v. Levine and PLIVA v. Mensing was that states would impose different duties on drugmakers than those imposed by the FDA.

But in a strict liability case such as Bartlett, Roberts said, the state isn't asking for different warnings or structures. Instead, the state is telling drugmakers they have to pay for damages caused by drugs considered unreasonably dangerous.

However, the justices also expressed concern in having a jury decide whether a drug is "unreasonably dangerous."

Should the Supreme Court affirm the First Circuit's decision, it would make the legal "landscape more dangerous" for both brand- and generic drugmakers, Jay Lefkowitz, the attorney representing Mutual, said in a media briefing following Tuesday's hearing. Making drugmakers responsible for compensation is a policy issue that should be decided by Congress, not the courts, he added. In the past, leading figures from both the brand and generic worlds have expressed support for a drug compensation fund similar to the program Congress created for vaccines. Rather than holding individual vaccinemakers responsible for injuries caused by their products, the compensation program is funded by an excise tax on vaccines.

While the high court was considering Bartlett, other legal experts were looking ahead to next week's arguments before the court on the legality of so-called "pay-for-delay" settlements between brand- and generic drugmakers.

If the settlements, which have become a routine part of drugmakers' business plans, are upheld, they are likely to form the framework for future biosimilar litigation, said William Gaede, a partner at McDermott Will & Emery.

Fight Forming on IP Protection

Efforts by U.S. lawmakers and the biopharma industry to make intellectual property (IP) protection part of all trade talks are being countered by an international group that claims such protections would "raise health care costs and contribute to preventable suffering and death."

A transatlantic coalition of 45 consumer, public health and Internet freedom groups issued a declaration this week demanding that the European Union-U.S. negotiations of a Transatlantic Free Trade Agreement exclude "any provisions related to patents, copyright, trademarks, data protection, geographical indications or other forms" of IP.

"Such provisions could impede our rights to health, culture and free expression and otherwise affect our daily lives," the coalition said.

Earlier this month, the Pharmaceutical Research and Manufacturers of America (PhRMA) urged nations participating in the 16th round of the Trans-Pacific Partnership (TPP) negotiations to prioritize IP protection, noting the importance of strong IP to the development of innovative treatments. The trade association also reiterated its call for the TPP to recognize U.S. law that grants 12 years of data exclusivity to biologics.

That's the longest exclusivity available among countries with biosimilar paths, according to the BioWorld Data report, The Biosimilars Game: A Scorecard for Opportunities, Threats and Critical Strategies. Europe, for instance, offers two years of market exclusivity combined with eight years of data exclusivity. Other countries offer less protection.

Since the U.S. Trade Representative is supposed to follow federal law in its negotiations, the biologics exclusivity should be part of every trade agreement going forward, PhRMA has said. Several lawmakers agree.

Last year, Sen. Claire McCaskill (D-Mo.) wrote to President Barack Obama, pressing for the TPP to include the 12-year exclusivity. The protection is needed to ensure U.S. biotechs compete on a level playing field and to safeguard the health of the nation's life sciences industry, she said. (See BioWorld Today, Aug. 20, 2012.)

Lawmaker Questions NIH's ROI

Budget pressures are leading to more intense scrutiny of the National Institutes of Health's (NIH) return on investment from early stage research that contributes to the development of blockbuster drugs.

In a recent letter to the NIH, Sen. Ron Wyden (D-Ore.) noted that in 1995, the agency had abandoned a policy that required "a reasonable relationship between the pricing of a licensed product, the public investment in that product, and the health and safety needs of the public."

Given the growing scarcity of research funding, Wyden said, "it is time to revisit the idea of striking a better balance between encouraging profit, innovation, accessibility and affordability." He asked the NIH to convene an external panel to re-examine the pricing of therapies developed with public funding. He also requested a list of major drugs that have entered the market as a result of NIH funding since 1995.

Wyden's letter was spurred by the $25,000/year pricing of Pfizer Inc.'s Xeljanz (tofacitinib), which was approved last November, and anticipation that the oral arthritis drug will hit peak annual sales of $2.5 billion. While the senator acknowledged the costs Pfizer incurred in developing the drug, he pointed out that "taxpayer-funded research was foundational" to its development. (See BioWorld Today, Nov. 8, 2012.)

Group Questions Ethics of Pediatric Research

More research is needed in adults before anthrax vaccine trials with children can be ethically considered, the Presidential Commission for the Study of Bioethical Issues said in a report released Tuesday. A major ethical consideration with pediatric pre-event trials is that the children participating in the study wouldn't benefit directly. The report, Safeguarding Children: Pediatric Medical Countermeasure Research, also discusses the ethics of pediatric research for other medical countermeasures.

Editor's note: For a copy of BioWorld's new biosimilars report, The Biosimilars Game: A Scorecard for Opportunities, Threats and Critical Strategies, please contact the BioWorld Data account managers for exclusive introductory pricing at (800) 477-6307.