FDA Proposes Rule Affecting Liability for Generic Drug Manufacturers

On Wednesday, November 13, 2013, the Food and Drug Administration (FDA) issued a proposed rule under which generic drug manufacturers would be able to independently update the safety information accompanying their products in the same way brand name drug manufacturers do today. This is a major development in FDA law and has the potential to significantly shift the balance of incentives and responsibilities that have traditionally governed the content of product labeling in the drug industry.  FDA’s current regulations do not allow generic drug manufacturers to independently update safety labeling.  Indeed, by statute the generic drug must carry the same labeling as the brand name drug in all material respects. The proposed rule would add 21 CFR 314.70(c)(8) to allow generic drug manufacturers to update warnings and precautions in their labeling before obtaining FDA approval by submitting a “changes being effected” (CBE-0) supplement, just as brand name drug manufacturers currently do.  Generic manufacturers would also be required to inform the brand name manufacturer about the labeling supplement.  The agency would then evaluate whether the proposed labeling change is justified and make an approval decision on the generic drug labeling change and the corresponding brand drug labeling change at the same time. In the new rule, FDA also proposes to create a web page dedicated to promptly posting information regarding the safety related labeling changes proposed by all drug makers in CBE-0 supplements.  In addition, in order to accommodate the new authority of generic drug makers to update safety labels on their own, the rule also proposes to revise 21 CFR 314.150(b)(10) to allow temporary differences in labeling between generic drugs and their corresponding brand name reference products.  The rule therefore contemplates that drug products that are approved as “the same” as one another, and that can be substituted for one another at the retail pharmacy level, will (at least for a time) include different warnings and precautions. FDA’s action in proposing the rule is a reaction to the 2011 Supreme Court case Pliva v. Mensing.  In Mensing, the Court held that because a generic manufacturer must have the same labeling as the innovator, and cannot update the safety information in its label unless the innovator has already initiated those changes, it may not be possible for the generic to comply with federal labeling requirements on the one hand, and requirements under state tort law on the other.  In other words, a state-based product liability claim for failure to warn could be preempted by the federal labeling laws.  Thus, under Mensing, consumers harmed by a generic drug were unable to prevail against generic manufacturers under state tort law, for damages caused by inadequate warnings. However, a different liability equation is presented to the brand name manufacturer.  As applied to brand name or innovator products, federal preemption does not so readily apply in failure-to-warn cases because it is possible for the innovator to update the warnings and precautions in its label in response to new safety information.  Accordingly, under an earlier decision, Wyeth v. Levine, the Supreme Court had held that brand name manufacturers may be held liable under state law for failure-to-warn. FDA’s proposed rule would appear to rebalance this equation.  It seems intended to bring generic drug manufacturers’ liability under state failure-to-warn claims into closer alignment with that faced by the innovator.  But the rule may have other far reaching impacts.  Through its mechanics (in allowing generic manufacturers to independently alter drug labeling), and in its effects, the new rule has the potential to mark one of the more significant shifts in drug product labeling regulation, since the advent of the modern-day generic drug approval process under Hatch-Waxman almost 30 years ago. Interested stakeholders have 60 days to submit comments. The authors thank Michael Moskowitz for his assistance

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