The author wishes to thank Porter Durham for his assistance in preparing this post.  Porter is currently a Summer Associate with the firm.   

On June 24, the United States Supreme Court announced its decision in Mutual Pharmaceutical Co., Inc. v. Bartlett that state law design-defect claims focusing on labeling of generic drugs are preempted by federal law. In many ways, the Bartlett decision can be seen as a major victory for generic drug manufacturers, which now enjoy far more protection from state law product liability suits. However, the Court did leave open some questions about tort liability for generic drug manufacturers.

In its holding, the Court analyzed the clash between New Hampshire tort law, which the Court concluded imposes a duty on manufacturers to ensure that their products are not “unreasonably dangerous,” and the federal Hatch-Waxman Act, which requires that the generic version of a name-brand pharmaceutical be chemically identical and bioequivalent to the name-brand version and that it carry the same labeling as that approved for the name-brand version. The Court reasoned that it would be impossible for a generic drug manufacturer to abide by both the state law (requiring it to alter the formula or labeling of a product to prevent “unreasonable danger”) and the federal law (forbidding the same). Accordingly, the Court held that because under the Supremacy Clause federal law pre-empts state law where they conflict, the New Hampshire standard could not be enforced.

The Court also dismissed the “stop-selling theory.” Recalling its decision in PLIVA, Inc. v. Mensing, the Bartlett Court acknowledged that a generic manufacturer could abide by both federal and state law by not selling its product within states where state law clashes with federal law or by not manufacturing its product at all. However, the Court argued that this sweeping solution is no solution at all, asserting that pre-emption cases have never required that an actor stop acting “to satisfy both his federal- and state-law obligations.” Moreover, the Court argued that impossibility pre-emption would be virtually meaningless if a claim of impossibility could be defeated by “the option of ceasing to act.”

Bartlett follows closely the Court’s holding in PLIVA (that federal drug law pre-empts state law and bars claims for inadequate warning) and extends that holding to claims brought for design defects. In doing so, Bartlett effectively bars product liability suits against generic drug manufacturers for anything other than manufacturing defects. While this bar has profoundly negative implications for potential plaintiffs, it largely benefits consumers on the whole. Because the Court’s decision reinforces the limitations on alterations to formula and packaging placed on generic drug manufacturers by the Hatch-Waxman Act, it further facilitates access to affordable generic drugs. Moreover, the reduced likelihood of being called to defend costly product liability suits also likely lowers the overall cost of doing business for generic drug manufactures, which again means greater access to affordable prescription drugs for consumers.

Are you still trying to understand the changes made in the HIPAA Omnibus Rule?

Do you want an opportunity to ask questions and hear how other providers are handing HIPAA issues?

Do you need a chance to brush up on your HIPAA knowledge and evaluate current strategies? 

If so, then you should consider attending one…

Husch Blackwell and Texas-based law firm Brown McCarroll will combine ranks effective July 15. With this merger, our firm will have one of the largest healthcare law practices in the country with over 110 attorneys focused on the healthcare, life sciences and pharmaceutical industries.

The merger will provide even greater depth to our healthcare practice…

Are healthcare providers at your facility texting patient information to each other?  This type of communication is becoming more and more common, but such text messages are often in violation of HIPAA.  To address this issue, Sprint announced last week that it is now offering two texting products that provide the proper security for PHI…

On June 14ththe Governor signed into law SB 1803. It amends Chapter 531 by limiting the Texas Health and Human Services Office of Inspector General’s (HHSC-OIG) ability to implement payment holds, improving providers’ rights to expedited appeals before the State Office of Administrative Hearings, redefining the liability for hearing costs, creating new requirements…

A trademark audit is at its most basic an asset inventory.  But instead of tracking down and counting blood pressure monitors, otoscopes and scalpels you are tracking down words, phrases and pictures (logos) that you are using to promote your business to the public. And instead of checking and noting the condition of these items and culling out those that are beyond repair or use, your trademark auditor will review how the marks are being used to be sure such use is proper and all of these marks have been searched and cleared for use. It may also find that you are using marks that no longer conform to your desired public image or Mission Statement and that such marks need to be retired.

A trademark audit should do more than just look at the marks that the business believes it owns.  A trademark audit should look at all of the company’s materials that are presented to the public and  review them for any words, phrases and pictures (logos) that are used to identify your company’s goods and services. A trademark audit will often identify terms that the auditor views as trademarks that the company may not realize it is using.  You might wonder – how can a company not know it is using a particular trademark?  This could be because marketing designed and distributed a flyer or brochure but did not review the terms being used – possibly due to a short deadline or perhaps they thought it would only be used “once”.  The audit may also identify terms that have been used for a long time that have simply fallen through the cracks.

Harvey Tettlebaum, a Husch Blackwell attorney specializing in healthcare law with an emphasis in post-acute care, contributed an article to the June 2013 issue of the Journal of Health & Life Sciences Law titled “Quality Measurements, Payment, and the Law: Disincentives to Physician-Patient Discussions of End-of-Life Care.”  Here is the abstract of the article.

With …

Are human genes patentable?

Late last week, the U.S. Supreme Court held that isolated segments of naturally occurring DNA are not patent eligible, while synthetically created DNA, such as complementary DNA (cDNA), is patent eligible. In the wake of this decision, patent portfolios should be reviewed to determine whether patents having claims to isolated DNA…

In recent months, two federal courts have dismissed lawsuits alleging that branded drug manufacturers’ discounted subsidies—coverage of co-payments—for branded drugs violate federal racketeering and commercial bribery laws.  The two cases are among a number of similar pending suits, largely coordinated by the healthcare consumer advocacy group Community Catalyst, which concern approximately 20 different branded drugs.  Both cases are significant victories for branded drug manufacturers, who face claims that they have defrauded health plans by offering discounted subsidies directly to consumers—nudging those consumers away from cheaper, generic options preferred by the health plans—in order to preserve market share for branded drugs.

The first action, brought by union health plans against the manufacturer Merck & Co. in the United States District Court for the District of New Jersey, was dismissed on April 29, 2013.  Judge Michael A. Schipp dismissed the action on grounds that the health plans lacked standing—that the health plans failed to allege that Merck’s discounted subsidies caused the health plans’ members to be prescribed or to purchase drugs that they would not have been prescribed or have purchased otherwise.

A second action against the manufacturer Bristol-Myers Squibb, also brought by union health plans under similar legal theories, was dismissed on substantive grounds by Judge J. Paul Oetken of the United States District Court for the Southern District of New York on June 6, 2013.

As Judge Oetken summarized the crux of the dispute between health plans and branded drug manufacturers:  “Insurers are keen to control drug costs, while manufacturers are determined to maintain market share while competing with generics and therapeutic alternatives.  In recent years, manufacturers have launched programs through which they offer to cover the cost of co-payment obligations for their branded drugs.  Insurers, which create tiered co-pay obligations to encourage plan members to select cheaper drugs, oppose these programs and argue that they increase overall drug costs.”

In other words, health plans use tiered co-payment plans to incentivize consumers to purchase less expensive, generic equivalents of branded drugs.  And, against these payment arrangements, branded drug manufacturers endeavor to preserve their market share by countering plan incentives with discounted subsidies.