WSJ Editorial Page: Pre-empting Drug Innovation - So much for the 'pro-business' Court

Pre-empting Drug Innovation. WSJ Editorial
So much for the 'pro-business' Court.
WSJ, Mar 05, 2009

The Supreme Court ruled 6-3 yesterday that drug companies can be held liable for harm even when their products are improperly administered by a third party despite warning labels that were obvious and approved by federal regulators. The decision is a huge victory for plaintiffs lawyers, but it's a much bigger defeat for drug innovation and public health.

Wyeth v. Levine involved Diana Levine, a Vermont woman who lost an arm to gangrene after an antinausea medication produced by Wyeth Pharmaceuticals was improperly injected into an artery. Ms. Levine sued the clinic and won a settlement. But then she also sued Wyeth, arguing that the company should have put stronger warnings on the label of the drug, Phenergan, and a Vermont jury awarded her $6.7 million in damages. Wyeth appealed, arguing that the warning label had been approved by the federal Food and Drug Administration, which should pre-empt liability under state law.

A majority of the Court, in an opinion written by Justice John Paul Stevens, sided with Ms. Levine. But the ruling is difficult to square with the Riegel decision last term, where a 7-2 majority held that FDA approval shields medical devices from most lawsuits. Moreover, it's unclear that a stronger warning would have mattered.

The drug's label clearly stated that the "IV push" method employed to deliver the drug to Ms. Levine should be used as a last resort and that "INADVERTENT INTRA-ARTERIAL INJECTION CAN RESULT IN GANGRENE OF THE AFFECTED EXTREMITY." As Justice Samuel Alito explains in his dissent, "the physician assistant who treated [Ms. Levine] disregarded at least six separate warnings that are already on Phenergan's labeling, so [Ms. Levine] would be hard pressed to prove that a seventh would have made a difference."

But Justice Alito's larger point is that "drug labeling by jury verdict" undermines the workability of the federal drug-labeling regime. Juries are presented with tragic plaintiffs who were injured, not the unknown patients who are helped, by a product. Hence, they tend to focus on risks more than overall benefits. By contrast, federal regulators are tasked to take the long view and factor in the interests of all potential users of a drug. Just as importantly, "the FDA conveys its warning with one voice," writes Justice Alito, "rather than whipsawing the medical community with 50 (or more) potentially conflicting ones."

A consequence of this ruling is an almost-certain spike in product-liability suits aimed at drug companies. Merck's Vioxx litigation has already cost the company $4 billion, and Eli Lilly has paid out more than $1 billion to settle suits related to the antipsychotic drug Zyprexa. A legal standard that said the FDA, not a state tort jury, is responsible for regulating warning labels would have given both drug companies a stronger position in these lawsuits.

Yesterday's ruling will expose drug companies to a kind of double innovation jeopardy. They typically spend $1 billion on research and development to bring a drug to market, with an 11% success rate on average. But they endure that burden on the understanding that FDA approval will give them a period to sell that drug with patent protection and that FDA approval provides some protection from lawsuits. Now they will have to contemplate paying up front -- and paying later, even if the tragic mistake in applying the drug is someone else's. Wyeth is a dream come true for the plaintiffs bar.