The generic pharmaceutical industry faced a Catch-22 when a serious adverse reaction arose from use of a generic drug product, and the manufacturer was restrained from unilaterally amending the product label to conform to state requirements, due to the Supreme Court’s decision in PLIVA, Inc. v. Mensing, 131 S.Ct. 2567 (2011). PLIVA held that state requirements to change a label are pre-empted by the Federal Food, Drug and Cosmetic Act’s prohibition of changing labeling without authorization by the FDA.

This quandary was resolved by a recent 5-4 Supreme Court decision in Mutual Pharmaceutical Co., Inc. v. Bartlett (Slip Opinion No. 12-142 – Decided June 24, 2013). In that case, a New Hampshire state court jury had rendered a verdict for $21 million in favor of a user of a generic sulindac product, who suffered severe toxicity from a side effect not reflected on the product’s label. That verdict was upheld on appeal to the First Circuit. However, the Supreme Court reversed and held that when a federal law forbids an action required by state law, the state law is “without effect.” Thus, the generic manufacturer was freed of the quandary posed by PLIVA of either halting its sale of the generic product until such time the label was revised by the FDA, or facing the prospect of expensive product liability claims in state court actions.

George M. Gould is Counsel to the Gibbons Intellectual Property Department. Christopher H. Strate, an Associate in the Gibbons Intellectual Property Department, co-authored this post.