Can state courts consider allegations that a drug company misled the Food and Drug Administration to win approval for a drug?


The Supreme Court on Monday wrestled with a Michigan law that shields pharmaceutical companies from product liability lawsuits, unless they committed fraud to get their drug approved.

At issue is whether that fraud exception, which allows lawsuits to proceed, is preempted by federal regulation of pharmaceuticals.

Carter Phillips, a lawyer for Pfizer Inc. told the justices that it should be.

“There is a very unique federal interest” in the Food and Drug Administration’s regulation of pharmaceuticals, he said. “There is no legitimate state interest here.”

The dispute stems from several suits against Warner-Lambert over its diabetes drug Rezulin. Warner-Lambert is now owned by Pfizer.

Justices Stephen Breyer and Anthony Kennedy appeared to side with Pfizer, expressing broad skepticism about product liability suits against pharmaceutical companies. Breyer said they essentially second-guess the FDA’s decision to approve the drug.

Breyer’s remarks are significant because the court has already accepted a case for its next term, which begins in October, that takes on the broader issue of when drug companies can be held liable for products that have been approved by the FDA. That case is Wyeth v. Levine, 06-1249.

Other justices, however, were more sympathetic to allowing the suits to proceed. Justice John Paul Stevens dismissed concerns raised by the Bush administration that they would prove burdensome to the FDA as “theoretical.”

Monday’s case is one of several before the court that tests the limits of federal preemption of state regulations in areas such as drugs, medical devices and online tobacco sales.

The justices ruled last Wednesday in a case involving Medtronic Inc. that federal regulation of advanced medical devices preempts lawsuits in state courts against their manufacturers.

The case before the court Monday won’t provide as broad a shield against lawsuits as the Medtronic case, because it won’t apply to all pharmaceutical suits.

Instead, it focuses on a specific issue: whether state courts can consider allegations that a drug company misled the Food and Drug Administration to win approval for a drug.

In a 2001 ruling, the justices said that lawsuits alleging “fraud on the FDA” are preempted by federal law, because they interfere with the federal government’s regulation of pharmaceuticals.

The question in this case is whether that means the exception in Michigan’s law is also preempted.

The Food and Drug Administration ordered Rezulin off the market in March 2000 after it was linked to nearly 400 deaths and hundreds of cases of liver failure.

A group of 27 Michigan plaintiffs, including relatives of six Rezulin patients who died from liver damage, sued Warner-Lambert after the FDA ordered Rezulin off the market in 2000. The drug has been linked to nearly 400 deaths.

Allison Zieve, a lawyer for the plaintiffs, argued the Michigan law is different than the one struck down by the court in 2001, because proving fraud on the FDA “is just the first step to litigating” the product liability suit. Claims of fraud against the agency aren’t the focus of the case, she said.

The court’s decision could impact laws in seven other states that shield the pharmaceutical industry from liability, but provide some exceptions in the case of fraud.

Chief Justice John Roberts has recused himself from the case. He owns between $15,001 and $50,000 in Pfizer stock, according to his latest financial disclosure form.

The case is Warner-Lambert v. Kent, 06-1498. A decision is expected by July.

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