Conte Presentation

Innovator Pharmaceutical Companies at Risk for Products Manufactured by Generic Drug Companies in California: Defending Product Liability Claims in the Wake of Conte v. Wyeth Kelly Savage, Esq. Genese Dopson, Esq. FDAnews Webinar January 15, 2009

Pharmaceutical manufacturers all face the prospect of tort litigation now and in the future.

Litigation over pharmaceutical drugs exacts a staggering cost on the industry .

Most Common Potential Claims: Design Defect Claims; Design Defects Based on a Failure to Warn; Manufacturing Defect Claims; Negligence Claims; Fraud and Deceit Claims; Breach of Express and Implied Warranty Claims; and Deceptive Practice Act Claims.

Drug lawsuits cost more than money

Today, you’ll learn more about California’s recent Conte v. Wyeth decision, and how it impacts defending product liability claims against your company here in California. End goal: learn to help your company avoid costly litigation in one of the most litigious states in the country. California’s recent decision in Conte v. Wyeth turns product liability on its head. Preemption, not foreseeability, insulates generic drug manufacturers from liability. Background and fundamentals of preemption as it applies to innovator and generic drug manufacturers. How this relates to your company. How you can use this defense to your advantage whether you are an innovator or generic drug manufacturer.

In Conte, the California Court of Appeal held an innovator drug manufacturer liable for injuries caused by a generic drug competitor’s product under a negligent misrepresentation theory—even though the plaintiff never used the innovator’s product.

For the foreseeable future, in California, brand-name drug manufacturers must provide adequate warnings and instructions concerning not just their own products but also the products of their generic drug competitors.

Under Conte’s broadly expanded notion of negligent misrepresentation, California would make innovator companies the indemnitor of injuries caused by their generic competitors’ products if, at any time, the prescribing physician consulted the Physicians Desk Reference labeling for the innovator’s drug and the patient was either prescribed or dispensed a generic copy of that drug.

Conte represents a dangerous and dramatic departure from well-settled rules of products liability in California, is at odds with the law of at least 14 other states, and adversely affects the public health.

Preemption, not foreseeability, insulates generic drug manufacturers from liability.

Preemption Fundamentals – What is Preemption? Federal preemption arises under the Supremacy Clause of the United States Constitution, which provides that federal law is the Supreme Law of the Land. Simply put, when a plaintiff seeks to force a defendant either to violate federal law or to face civil liability, both the Supremacy Clause of Article VI of the United States Constitution and the doctrine of preemption are implicated. Under this doctrine, any federal law—even a regulation by a federal agency—trumps any conflicting state-law claim.

Types of Preemption Preemption may arise either expressly—where the federal legislation states that any other claims are preempted—or by implication. Implied preemption occurs in one of two situations: (1) through a broad and comprehensive Congressional scheme occupying the entire field (field preemption), or (2) through a conflict between a state remedy and a Congressional enactment (conflict preemption). An actual conflict arises in one of two ways: (1) when compliance “with both federal and state regulations is a physical impossibility,” or (2) when state law “stands as an obstacle to the accomplishment and execution of the full purposes of Congress.”

Why Should Preemption Matter to You? Preemption is a Powerful Defense Preemption is Generic Preemption is a Legal Question Preemption is Severable Preemption Applies to Innovator and Generic Drug Manufacturers

Recent example: Dennis Quaid and Baxter Quaid and his wife sued the makers of Heparin for allegedly giving their twin babies an overdose of the drug. The twins were only a few weeks old when they were given 10,000 units of Heparin at Cedars-Sinai Hospital in Los Angeles. They were supposed to receive 10 units of the blood thinner given in an IV to avoid blood clots. The Quaids allege that Baxter, which makes the blood thinner Heparin, was negligent by making different doses in similar vials with similar blue labels.

Baxter’s “Dear Doctor Letter” IMPORTANT MEDICATION SAFETY ALERT BAXTER HEPARIN SODIUM INJECTION 10,000 UNITS/ML AND HEP-LOCK U/P 10 UNITS/ML February 6, 2007 Dear Healthcare Provider: This important safety information concerns the potential for life threatening medication errors involving two Heparin products: • Heparin Sodium Injection 10,000 units/mL • HEP-LOCK U/P 10 units/mL

Baxter is aware of fatal medication errors that have occurred when two Heparin products with shades of blue labeling were mistaken for each other. Three infant deaths resulted when the higher dosage Heparin Sodium Injection 10,000 units/mL was inadvertently administered instead of the lower dosage of HEP-LOCK U/P 10 units/mL. The currently marketed 1 mL vials of Heparin Sodium Injection 10,000 units/mL and the HEP-LOCK U/P 10 units/mL use shades of blue as the prominent background color on their labels. Healthcare professionals should be reminded to: • Never rely on color as a sole indicator to differentiate product identity. • Always carefully read the product label to verify that the correct product name and strength have been selected. • Always carefully review both the drug name and dose on the label before dispensing and administering these products. • Double-check your inventory as soon as possible, to ensure that there is no mix-up of the products. • Notify all staff of the potential for errors in dispensing and administering these products. It is advised that you provide color photographs (see below) to staff to assist in their understanding of the product similarities.

Baxter filed a motion to dismiss the case, relying on the same preemption argument that is currently pending before the Supreme Court in Levine v. Wyeth , 128 S.Ct. 1118 (2008). ( See also 71 Fed. Reg. 3922 (Jan. 24, 2006)) Baxter argues that the FDA’s approval of its application to market the drug preempts plaintiffs’ lawsuit. So, says Baxter, this suit should not be heard by a judge or jury. The Quaids recently settled the case with Cedars-Sinai for $750,000. The case against Baxter was dismissed on jurisdictional grounds.

NDA vs. ANDA Review Process NDA Requirements Labeling Pharm/Tox Chemistry Manufacturing Controls Inspection Testing Animal Studies Clinical Studies Bioavailability ANDA Requirements Labeling Pharm/Tox Chemistry Manufacturing Controls Inspection Testing Bioequivalence

What are the Basic Generic Drug Requirements? Same active ingredients Same route of administration Same dosage form Same strength Same conditions of use Inactive ingredients already approved in a similar NDA

Labeling “ Same” as brand-name labeling May delete portions of labeling protected by patent or exclusivity (i.e., an indication) May differ in excipients and product description (i.e., colors and shapes)

Innovator Drugs and Preemption

Generic Drugs and Preemption Generic drug manufacturers cannot unilaterally change their labeling after approval, even to add or strengthen the existing warning. If a generic drug manufacturer makes any unilateral change to its label or product insert to add or strengthen a warning so that its marketing ceases to be identical to the innovator drug’s marketing, “the FDA will withdraw approval of a generic maker’s ANDA . . . .” Colacicco v. Apotex Inc. , 521 F.3d 253 (3d Cir. 2008) Plaintiffs cannot force generic drug manufacturers to choose between avoiding civil liability and complying with federal law through tort litigation.

Using Preemption to Your Advantage

Additional Information For additional information, please contact: Kelly Savage ( [email_address] ) Genese Dopson ( [email_address] ) Sedgwick, Detert, Moran & Arnold LLP One Market Plaza Steuart Tower, 8 th Floor San Francisco, California 94105 (415) 781-7900

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