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Rafferty v. Merck & Co., Inc.

Supreme Judicial Court of Massachusetts, Middlesex

March 16, 2018

MERCK & CO., INC., & another.[1]

          Heard: November 6, 2017.

         Civil action commenced in the Superior Court Department on October 10, 2013. A motion to dismiss was heard by Kenneth J. Fishman, J., and entry of separate and final judgment was ordered by him.

         The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

          Emily E. Smith-Lee for the plaintiff.

          Richard L. Neumeier (Aaron Rice, of Mississippi, & David L. Johnson, of Tennessee, also present) for Merck & Co., Inc.

          The following submitted briefs for amici curiae:

          Michael X. Imbroscio & Gregory L. Halperin, of the District of Columbia, & Paul W. Schmidt for Pharmaceutical Research and Manufacturers of America & others.

          Mark C. Fleming & Tyler L. Sparrow for International Association of Defense Counsel.

          Hugh F. Young, Jr., of Virginia, & David R. Greiger & Richard G. Baldwin for Product Liability Advisory Council, Inc.

          Kannon K. Shanmugam, Allison Jones Rushing, & Connor S. Sullivan, of the District of Columbia, & Jennifer G. Wicht for Chamber of Commerce of the United States of America.

          Lawrence G. Cetrulo, Kyle E. Bjornlund, Elizabeth S. Dillon, & Brian D. Fishman for Massachusetts Defense Lawyers Association.

          Present: Gants, C.J., Gaziano, Budd, & Cypher, JJ.

          GANTS, C.J.

         Under Federal law, a manufacturer of a generic drug must provide its users with a warning label that is identical to the label of the brand-name counterpart. See PLIVA, Inc. v. Mensing, 564 U.S. 604, 613 (2011) (PLIVA). The issue on appeal is whether a plaintiff who alleges that he was injured from his use of a generic drug, because of a failure to warn of the drug's side effects, may bring a common-law general negligence claim and a statutory claim under G. L. c. 93A against the brand-name drug manufacturer that created the warning label. Applying our general principles of tort law and as a matter of public policy, we conclude that the plaintiff may not bring a negligence claim against the brand-name manufacturer for a failure to warn. We further conclude that the plaintiff, if he were to amend his complaint, and if the amended allegations would so warrant, may bring a common-law recklessness claim against the brand-name manufacturer if it intentionally failed to update the label on its drug, knowing or having reason to know of an unreasonable risk of death or grave bodily injury associated with its use. We also conclude that a plaintiff who is injured by a generic drug due to a failure to warn cannot bring a claim under G. L. c. 93A, § 9, against a brand-name manufacturer that did not advertise, offer to sell, or sell that drug because such failure did not occur in the conduct of "trade or commerce" as defined in § 1 (b).[2]


         1. Regulatory background.

         Under the Federal Food, Drug, and Cosmetic Act (act), 21 U.S.C. §§ 301 et seq. (2012), drug manufacturers may not market drugs in interstate commerce without the approval of the United States Food and Drug Administration (FDA). 21 U.S.C. § 355(a). As such, a manufacturer that seeks to market a new brand-name drug must submit a new drug application, showing that the drug is safe and effective. See 21 U.S.C. § 355(b)(1); 21 C.F.R. § 314.50(d)(5)(iv)-(vi) (2017). As part of the new drug application, the manufacturer must also show that the proposed warning label for the drug is accurate and adequate. See 21 U.S.C. § 355(b)(1), (d); 21 C.F.R. § 314.50(c)(2)(i), (d)(5)(v), (d)(5)(viii) (2017). The process of obtaining FDA approval is "both onerous and lengthy, " requiring manufacturers to expend significant time and resources. Mutual Pharm. Co., v. Bartlett, 570 U.S. 472, 476 (2013).

         Originally, the same process was required for generic drugs. See PLIVA, 564 U.S. at 612. This changed in 1984, when Congress enacted the Drug Price Competition and Patent Term Restoration Act, commonly known as the Hatch-Waxman amendments to the act. See Id. The purpose of the amendments was twofold: to improve the affordability of prescription drugs while also encouraging innovation and investment in new drugs. See Abbott Labs, v. Young, 920 F.2d 984, 985 (D.C. Cir. 1990), cert, denied, 502 U.S. 819 (1991), citing H.R. Rep. No. 98-857, 98th Cong., 2nd Sess., pt. 1, at 14-15 (1984), reprinted in 1984 U.S.C.C.A.N. 2647, 2648 (House Report). In striking a balance between these competing goals, Congress made two significant changes to the existing regulatory scheme.

         First, the amendments established a simpler and speedier approval process for generic drugs. See 21 U.S.C. § 355 (j) . A manufacturer now seeking to market a generic version of an approved brand-name drug need only submit an abbreviated new-drug application, indicating that the generic drug is equivalent to its brand-name counterpart in certain key respects. 21 U.S.C. § 355(j)(2)(A). Specifically, the manufacturer must show that the proposed generic drug has the same active ingredients, route of administration, dosage form, and strength as the approved brand-name drug. 21 U.S.C. § 355(j)(2)(A)(ii)-(iii). It also must show that the generic drug is "bioequivalent" to the brand-name drug, 21 U.S.C. § 355(j)(2)(A)(iv), meaning that it has the same rate and extent of absorption. 21 U.S.C. § 355(j)(8)(B). Finally, it must show that the proposed warning label for the generic drug is the same as the labeling approved for the brand-name drug. 21 U.S.C. § 355(j)(2)(A)(v). As a result, generic manufacturers can bring their drugs to market much less expensively and can therefore make these lower-cost alternatives more widely available to consumers. See PLIVA, 564 U.S. at 612.

         Second, in order to safeguard the interests of brand-name manufacturers and incentivize continued innovation, the amendments also authorized the FDA to extend the length of its patent terms to offset delays caused by the FDA's regulatory review. See 35 U.S.C. § 156 (2012). See also House Report, supra at 15. For patents issued after the amendments were enacted, patent terms can now be extended for up to five years, depending on the length of the review period, thereby allowing brand-name manufacturers to enjoy a monopoly over their newly developed drugs for a longer period of time. 35 U.S.C. § 156(a), (c), (g)(6)(A).

         A key feature of the current regulatory scheme is that it imposes different labeling responsibilities on brand-name manufacturers and generic manufacturers. See PLIVA, 564 U.S. at 613. A manufacturer of a brand-name drug must ensure that its label is accurate and adequate. See 21 U.S.C. § 355(b)(1), (d). In contrast, a manufacturer of a generic drug must ensure only that its label is identical to the label of the brand-name counterpart. See 21 U.S.C. § 355(j)(2)(A)(v), (j)(4)(G). See also PLIVA, supra. Furthermore, although all drug manufacturers are required to continue to monitor the safety of their products after approval, 21 C.F.R. §§ 314.80, 314.81, 314.98 (2017), only brand-name manufacturers have the power to change the contents of their labels without FDA approval. Under FDA regulations, a manufacturer may, through a process known as "changes being effected, " "add or strengthen" a warning on its label by filing a simultaneous application with the FDA, without waiting for the agency's approval. 21 C.F.R. § 314.70(c)(3), (c)(6)(iii)(A) (2017).[3] This process is not available to generic manufacturers that, pursuant to their "ongoing [F]ederal duty of 'sameness, '" may change a label only when necessary to match an updated brand-name label or to follow FDA instructions. PLIVA, supra at 613, 614-615. See 21 C.F.R. § 314.150(b)(10) (2017) (FDA approval for generic drug may be withdrawn if label is "no longer consistent" with brand-name label).

         This allocation of labeling responsibilities under Federal law has proved difficult to reconcile with the duties required of generic drug manufacturers under State tort law. Many States, including this one, impose on manufacturers a duty to warn consumers of dangers arising from the use of their products where the manufacturers know or should have known of the dangers. See PLIVA, 564 U.S. at 611; Mitchell v. Sky Climber, Inc., 396 Mass. 629, 631 (1986) . Under Federal regulations, however, manufacturers of generic drugs -- because they lack the power to change the warning labels on their products unilaterally -- cannot independently fulfil these State law duties. For this reason, in PLIVA, 564 U.S. at 608-609, the United States Supreme Court held that State tort law claims against generic manufacturers arising out of a failure to warn are preempted by Federal drug regulations. See Mutual Pharm. Co., 570 U.S. at 476 ("[S]tate-law design-defect claims that turn on the adequacy of a drug's warnings are pre-empted by [F]ederal law under PLIVA"). The practical consequence is that a consumer who suffers injury arising from an inaccurate or inadequate drug warning label can sue the manufacturer for damages caused by his or her injury only if the consumer ingested a brand-name version of the drug -- but not if the consumer ingested the generic version. See PLIVA, supra at 625.

         2. Plaintiff's claims.

         We summarize the facts as stated in the plaintiff's complaint. Merck & Co., Inc. (Merck), is the manufacturer of Proscar, an FDA-approved, brand-name version of the drug finasteride. Finasteride is used to treat benign prostatic hyperplasia in persons with an enlarged prostate.

         In August, 2010, Brian Rafferty was prescribed finasteride by his physician to treat an enlarged prostate. Shortly after he started taking finasteride, Rafferty began to experience side effects causing sexual dysfunction, including erectile dysfunction and decrease in libido. In October, 2010, Rafferty weaned himself off of the drug but the side effects continued and even worsened. He was eventually diagnosed with hypogodanism and androgen deficiency allegedly induced by the finasteride, and is now undergoing treatment that, according to his physicians, may continue indefinitely.

         It is undisputed that Rafferty ingested the generic version of finasteride, not Merck's brand-name version Proscar. At the time that Rafferty was prescribed the finasteride, the product label warned of the potential for side effects related to sexual dysfunction, but represented that these side effects would resolve after discontinued use of the ...

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