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Derek Lowe The 2002 Model

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Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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November 17, 2008

Liable For Generics? You Are Now!

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Posted by Derek

There was a legal ruling last week in California that we’re going to hear a lot more of in this business. Conte v. Wyeth. This case involved metaclopramide, which was sold by Wyeth as Reglan before going off-patent in 1982. The plaintiff had been prescribed the generic version of the drug, was affected by a rare and serious neurological side effect (tardive dyskinesia, familiar to people who’ve worked with CNS drugs) and sued.

But as you can see from the name of the case, this wasn’t a suit against her physician, or against the generic manufacturer. It was a suit against Wyeth, the original producer of the drug, and that’s where things have gotten innovative. As Beck and Herrmann put it at the Drug and Device Law Blog:

The prescribing doctor denied reading any of the generic manufacturer's warnings but was wishy-washy about whether he might have read the pioneer manufacturer's labeling at some point in the more distant past.

Well, since the dawn of product liability, we thought we knew the answer to that question. You can only sue the manufacturer of the product that injured you. Only the manufacturer made a profit from selling the product, and only the manufacturer controls the safety of the product it makes, so only the manufacturer can be liable.

Not any more, it seems. The First District Court of Appeals in San Francisco ruled that Wyeth (and other drug companies) are also liable for harm caused by the generic versions of their drugs. At first glance, you might think “Well, sure – it’s the same drug, and if it causes harm, it causes harm, and the people who put it on the market should bear responsibility”. But these are generic drugs we’re talking about here – they’ve already been on the market for years. Their behavior, their benefits, and their risks are pretty well worked out by the time the patents expire, so we’re not talking about something new or unexpected popping up. (And in this case, we're talking about a drug that has been generic for twenty-six years).

The prescribing information and labeling has been settled for a long time, too, you’d think. At any rate, that’s worked out between the generic manufacturers and the FDA. How Wyeth can be held liable for the use of a product that it did not manufacture, did not label, and did not sell is a mystery to me.

Over at Law and More, a parallel is drawn between this ruling and the history of public nuisance law during the controversy over lead paint; the implication is that this ruling will stand up and be with us for a good long while. But at Cal Biz Lit, the betting is that “this all goes away at the California Supreme Court”. We’ll see, because that’s exactly where it’s headed and maybe beyond that, eventually.

And if this holds up? Well, Beck and Herrmann lay it out in their extensive follow-up post on the issue, which I recommend to those with a legal interest:

Conte-style liability can only drive up the cost of new drugs – all of them. Generic drugs are cheaper precisely because their manufacturers did not incur the cost of drug development – costs which run into the hundreds of millions of dollars for each successful FDA approval. Because they are cheap, generics typically drive the pioneer manufacturer’s drug off the market (or into a very small market share) within a few years, if not sooner. Generic drugs will stay cheap under Conte. But imposing liability in perpetuity upon pioneer manufacturers for products they no longer sell or get any profit from means that the pioneer manufacturers (being for-profit entities) have to recoup that liability expense somewhere. There’s only one place it can come from. That’s as an add-on to the costs of new drugs that still enjoy patent protection.

Exactly right. This decision establishes a fishing license for people to go after the deepest-pocketed defendents. Let’s hope it’s reversed.

Comments (31) + TrackBacks (0) | Category: Regulatory Affairs | The Central Nervous System | Toxicology


1. Tyrosine on November 17, 2008 10:14 AM writes...

I really don't see how normal product liability law applies to drugs at all. Drugs, unlike most other products, have inherently unknown and unforseen adverse events. This is not like manufacturing a defective tire.

The real question is, what could Wyeth have done to avoid this incident? If the answer is nothing, then they should not be liable.

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2. Javaslinger on November 17, 2008 10:19 AM writes...


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3. LabRatUK on November 17, 2008 10:33 AM writes...

Ouch. If the courts really do want to further strangle innovation this is a great way of going about it

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4. paul on November 17, 2008 11:08 AM writes...

This is really astounding. I can't imagine this ruling cold hold up. I mean - why then shouldnt you voluntarily withdraw your product from the marketplace when it loses patent exclusivity? Maybe that would protect you.

Lawyers are ruining the indusstry, both from within and without!

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5. erin on November 17, 2008 11:28 AM writes...

Absurd as this case is on the flip side-if it by some fluke actually holds-this might be the way for pharma to get a handhold on some of the generic profits. If the primary manufacturer is going to be held liable then they should receive some compensation for that increased risk.

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6. Nick K on November 17, 2008 11:46 AM writes...

Disastrous news for anyone but lawyers. Is there no limit to the insanity of product liability law? Pharma firms already spend a fortune in legal fees, but with rulings like this the risks will become untenable.

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7. TW Andrews on November 17, 2008 11:53 AM writes...

Wow, it's as if the courts are trying to destroy the pharmaceutical industry.

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8. May Glispy on November 17, 2008 12:02 PM writes...

Regarding Generics - are these drugs as effective as the original prescribed formulae. I have been taking a drug (Lotrel)for High Blood Pressure for years and my pressure remained stable and each time I get my pressure checked by my Doctor he kept saying he was proud to see how good my pressure was. However, since I started taking the generic substitute for that drug my pressure has been elevated and I am still taking the generic formula. When I request the original formula, the pharmacist tells me that he has to prescribe the generic formula unless the Doctor prescribes the original (Lotrel) and writes on the prescription (DAW). I am curious as to whether it is a fact that generic drugs are just as effective as the original formulae.

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9. milkshake on November 17, 2008 12:18 PM writes...

I can see a possible case if it could be proven that Wyeth had a pretty good knowledge of this rare complication from the beginning and intentionally supressed it so that it would get more favorable labeling from FDA, and the deception held for all these years until now. Which is a bunch of baloney because metaclopramide is known to cause tarditive diskinesia and should not be prescribed long term or high dose - there are safer alternatives.

This is pretty crazy. The patient shuld have sued the doctor instead.

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10. Curious Wavefunction on November 17, 2008 1:29 PM writes...

This is ridiculous. Common sense is really becoming more and more uncommon these days.

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11. Jose on November 17, 2008 1:32 PM writes...

"Article One Partners" is offering $50k to invalidate via "prior art" several huge pharma patents, like Singulair, Lipitor, and Effexor.
Any guesses are to who's on the take here!?

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12. Sili on November 17, 2008 2:43 PM writes...


What is the world coming to?

I hope this gets overturned. The California Supreme Court seems to be imbued with sanity these days.

I doubt it matters, but far as I can tell the judge was a Republan appointment.

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13. Daniel Newby on November 17, 2008 3:01 PM writes...

The appalling thing is that there is an even more absurd lawsuit over a Wyeth neuroleptic. They are currently fighting a $6M judgment over the inadvertent intra-arterial injection of promethazine despite a dire, explicit warning against it on the label and despite the FDA forbidding a stronger warning on the label.

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14. CMC guy on November 17, 2008 3:51 PM writes...

So if they can reach back to Innovators shouldn't NIH/Universities be held liable for "bad drugs" since, if as some believe, they are responsible for new drugs these days? How much money did (various?) Universities make of COX-2 inhibitors and did they lose anything beyond royality streams when the problems occurred.

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15. MTK on November 17, 2008 4:24 PM writes...

I agree with milkshake on this one in that I could see how an original manufacturer could be held liable if there was deliberate malfeasance or there was gross negligence. Given the facts presented, however, this one is hard to swallow.

I'm trying to think of a comparable analogy and am really drawing a blank. The closest I could think of is if a cheap car manufacturer deciding to make, market, and sell a carbon-copy of the Pinto, then having someone sue Ford once they got into a fiery wreck. Not quite, but close.

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16. The Pharmacoepidemiologist on November 17, 2008 4:28 PM writes...

CMC guy--

The issue isn't who actually did the innovation, it's who submitted the IND. That's the legal "innovator" for the product, the company on the bubble for any torts it creates. The issue (and the only issue) is whether the company could have possibly detected the toxicity prior to marketing it. More times than anyone in the industry wants to acknowledge and accept, the answer is "yes, it could have been avoided". Granted, it may have been an expensive study by clinical development standards, but if it's less than one year's revenues, then it is a very hard case for a company to make that it was simply "blindsided". A lot of the time (and I speak from decades of experience in the industry) the company really doesn't want to know if there's a problem. Sad but true. And as for the claim that it's now generic, the only major pharma I'm aware of which walks away completely from its ethical brands upon patent expiration is Merck. And I don't know if it still does that, anymore. So much of the bellyaching expressed by my fellow commentators above falls on deaf ears here--the fact is that the company usually could have found out if it hadn't played the ostrich game.

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17. Still Scared of Dinosaurs on November 17, 2008 4:44 PM writes...

May Glispy:

The short answer is that it depends a lot on how the generic was compared to the original. One way that some get approved is that a bunch of people get one or the other and the amount that "actually gets into the patient" is compared between the groups. Ususally this means seeing how much gets is in the blood at a number of time points and performing some type of calculation or manipulation that brings is down to one number for each group.

Now here's the fun part. The new drug is often deemed to be the "same" if the concentration of the new drug is between 80% and 125% of the original (often referred to as the 80/125 rule). So in theory two drugs could both be the same when one exposes the patient to 80% whereas the other exposes him/her to 125%. In this case a given dose of the second generic would actually expose the patient to over 1.5 times as much and the first generic.

Same? You tell me, and remember that this is only based on the exposure to the molecule not what it's doing. For a simple molecule with a well-characterized activity and a wide range of doses that are both safe and effective this is a great model for approving generics.

This model kind of works for blood pressure drugs because of how they are used clinically: Take some for a while and come back. If you need more up the dose, if you're not tolerating it well switch to another drug and start over. The problem with the way this occurs in the pharmacy is that they won't let you switch to the brand name but they are not clear on whether they will switch you from one generic to another without telling you. But don't worry, if something bad happens you can always sue the original developer.

I cannot imagine that biologics would ever be rational candidates for such an approval and I'm sure that the target audience for this blog can name a lot of others. The first candidate as an alternative, however, is the dreaded "non-inferiority" study. Big, expensive, and annoying as hell.

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18. Anonymous BMS Researcher on November 17, 2008 7:15 PM writes...

I first learned the insane monster that product liability has become in this country in a previous career as an engineer. No question then or now, this country has a preposterous legal system.

However, there are a couple of dots that few people connect here: a fundamental root cause of product liability suits in the US is precisely our lack of much safety net compared to most rich countries. In most rich countries an injured person would get their medical care, and lots of other help, from the government. Here an injured person is basically forced to look around for deep pockets.

Another example: GM is moaning that the cost of health care for current and retired employees is one of the reasons they are in trouble. Well, where was GM (and other big companies with humongous medical costs) when the Clintons were trying to fix our healthcare system?!?!? So their plan wasn't perfect, well Corporate America blew a golden opportunity to seize the moment, demonstrate leadership, and come up with a better plan. They didn't.

My point is, NOT having a coherent health care system has enormous indirect costs.

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19. MTK on November 17, 2008 11:10 PM writes...

Whoa, Pharmacoepi.

I see your point about an ostrich game, if there are adverse effects that are either reasonably to be expected given mechanism or target or some hint in clinical trials. That would fall under the umbrella of malfeasance or gross negligence that I mention above.

But if you're talking about a rare, but known, adverse effect, that's a different story. If the original manufacturer has presented all the data and the labeling reflects that I don't see the liability.

The point that you're missing here is that the plaintiff is not targeting the party that is most liable, probably his caregiver, but rather the one with the deepest pockets. Somehow that seems wrong, doesn't it? Trust me I'm not a believer in tort reform, but somehow it seems logical that if you sue for a wrong committed against you, that you should at least sue the one most responsible for that wrong, not the one most likely to pay.

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20. acucucuuc on November 18, 2008 11:01 AM writes...

A general rule of tort law is that liability should be placed on the party best able to prevent the harm. This creates an incentive for the party who most effectively can take action to actually take such action.

Here, it is hard to see how Wyeth can be such a party. The harm (tardive dyskinesia) was already known, so Wyeth has no further power to discover the harm, make it known, and prevent further harm. Wyeth has no control over the prescribing physician or the generic manufacturer. It cannot ensure that they correctly prescribe and label the drug.

The parties best able to prevent the harm at issue here seem clearly to be the prescribing physician and the generic manufacturer. Why, other than wanting to sock it to big, bad pharma, would you want to not hold them liable?

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21. CMC guy on November 18, 2008 11:51 AM writes...

Pharmacoepidemiologist the issue is not about who filed the IND/NDA but is about responsibility and the whole range of risks and credit/blame which do realize gets tricky in the "legal" world verses science/common sense. Bypassing the Patient/MD/Generics/FDA responsibilities the court decision seems to only focus on one party whose role is related via history of the drug. This is about lawyers/money and there has been a shift from "Ambulance chasers" to "Bottle Readers" as MDs are not usual first targets anymore when they can extort more from “deep pocketed” drug companies for what is/not on the labels. I was suggesting tangentially, not seriously, that if one can connect back to the "innovator" of a drug then why then can not that be further extended to others involved in the genesis of a drug/class as there seems to be a strong public/congress view and criticisms that drug companies only exploit work of others such as NIH and do not contribute much to the process.

I also disagree with alluding that companies are burying their heads. I know it does happen at times where people ignore things but mostly it comes from the challenges/complexities faced rather than overt suppression. Based on your moniker I assume you know more about signal/noise difficulties than I do but by the nature of clinical studies and then post-marketing expansion it is extremely hard to determine what are real causes from side effects verses chance factors. Designing/conducting studies for rare AEs is tremendously hard and to propose that these should not consider revenue shows lack of understanding of trials and funding situation. Yes it is much easier to go back and perform a beta analysis to say something was "evident" before and a “simple/less than 1 year cost” would have shown it but does not provide an adequate context to drug development. One can always "do more" but in practice have to draw lines and generally what happens (in development) is that chase two types of events, those that are most serious and also those that are quick/easiest to answer and it is impossible to do everything one might think/wish to study. You seem to suggest companies should do everything and likewise remain perpetually liable for anything they did not do/observe/think of.

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22. The Pharmacoepidemiologist on November 18, 2008 2:42 PM writes...

MTK and acucucuuc

First, the proximate party (the prescriber) isn't always the one with the liability. The manufacturer, under common law, assumes liability for the safety of whatever it manufactures if it could reasonable have detected the problem using the standard research techniques available to it. So the innovator maintains liability even for something rare (like clear cell vaginal carcionoma in DES daughters).

As for Wyeth not having responsibility for what a physician does in prescribing the medication, sorry, that idea went away a quarter century ago. We now have things called risk management programs. They're used with drugs like Thalidomide, Revlimid, Accutane, Clozaril, and others. The premise behind these programs is that the manufacturer has direct responsibility for what prescribers do with the drug. That responsibility includes generics, since generic Clozaril (clozapine) manufacturers use their own risk management plan. And those persons who don't comply with the generic clozapine risk management plan can not get any of their clozapine prescriptions filled anywhere in the United States. That's the law. The same is true with Accutane and Thalidomide, and ... any other drug, branded or generic, for which a risk management program exists in the US.

Again, the responsibility lies with the innovator to maintain the label. Unless the innovator does not participate in the generics market for the drug, the innovator has no basis to claim a lack of interest in maintaining the label and in bearing liability. That's the law. Even before the court ruling.

Oh, and if you're wondering, that same law is the reason there's no longer an asbestos industry in the US and why the tobacco industry in the US finances all the anti-smoking programs run by individual states (and quite a few non-smoking, even non-health programs, to boot).

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23. The Pharmacoepidemiologist on November 18, 2008 2:46 PM writes...


Safety signal detection isn't as difficult as you suggest, either during development or in post-marketing. (You've been listening to your company's legal counsel too much.) It takes resources, sure (and companies really don't like spending those resources on safety, they'd rather hold parties for MDs at scientific meetings as part of their marketing effort). But it is quite doable.


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24. MTK on November 18, 2008 3:34 PM writes...


The tobacco settlements came not due to product liability alone, but product liability coupled with actual malfeasance. That's where they got into trouble. In fact, thanks to the surgeon general's warning they were protected for quite awhile until their bad behavior was unearthed.

In this case, tarkive dyskinesia is a well established possible adverse effect. The label, at least now, clearly states one should not take it for more than 12 weeks. Ms. Conte took it for four years. I could not find what the labeling was during the time she took the drug, but in a similar case, McNeil vs. Wyeth, a Texas judge in 2005 ruled that "the Reglan label specifies that the drug is intended for short-term use of 12 weeks or less, warns against the potential risk of tardive dyskinesia and other movement disorders, and discloses that the risk of developing tardive dyskinesia is highest among elderly women and increases with the duration of treatment and the total cumulative dose." So at least since 2001 the labeling has been pretty clear.

BTW, in reading the judgment, the appeals court took pains to state that they were treating this as a negligence case and not a product liability case and felt that they were breaking no new ground in terms of product liability.

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25. acucucuuc on November 18, 2008 3:42 PM writes...


I don’t know the law in this area and you seem to. So I will assume you are correct in stating what the law is. I am interested in hearing why you think having such law is a good thing. The asbestos industry went away because of such law? Would it be a good thing if brand name pharmaceutical companies went away? The tobacco industry tries to persuade people not to take its products? Is that a good thing for brand name pharmaceutical companies to do? Do you think such law will just make brand name pharmaceutical companies a bit more careful while still producing more or less the same number of new drugs? How do you know they won’t go away (at least to a significant extent) instead?

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26. acucucuuc on November 18, 2008 4:16 PM writes...

Sorry. I never knew apostrophes were such tricky things.

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27. CMC guy on November 18, 2008 5:17 PM writes...

PE we must live in different spheres as this is the message from Clinical and the Biostats people on evaluation of data (in my multiple decades in industry). No legal counsel or marketing perspectives are available/required to know it is very tough to sort through all the direct and indirect data from treatment of sick patients to answer any question reliably, particularly when a possible side effect occurrence is very rare. Sure one can argue that everything is doable. The defining of size of trials, exclusion/inclusion criteria, and the length of time often make some questions prohibitively restrictive as even Pharma does not have unlimited resources, especially as it continuously seeks to discover and develop even more new drugs. Your comments smacks of Academia again where can have the freedom to research "impractical" areas (and I highly value doing some Research for Research sake) but drug industry would not last long if it followed that course of action.

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28. Unknown TLC on November 18, 2008 11:03 PM writes...

So that would mean that Bayer should be in a heap of trouble over the manufacturing of heroin back in the late 1890's. Let's see how that one plays out!

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29. Aster Oidinsky on November 19, 2008 6:54 AM writes...

Ariad Pharma recently had their broad dreams torn to bits in a 112 page rejection letter from the US patent office regarding their NF-kB patent on October 16. Appears the prior art factor did play a role.

This lawsuit was waiting to happen. The lawyers are looking for the deepest pockets and it wasn't the doctor or the generic company. This is a reason why the generics should be required to complete the entire clinical trial process just like the pharmas and the pharmas should be exempt from anything other than known side effects at the end of the patent. Pharmas have no control over what the generics do and they should not be responsible either for what the generics produce.

Expect more lawsuits once imported drugs are allowed freely into this country. People will be suing big pharma because their apparent drug contained the wrong ingredients or only 1/2 the dose. I have no problem letting these drugs in as long as people sign a waiver exempting the apparent manufacture of the drug from any legal action and they accept the risk to save a few bucks. But then who would sign it since people are always looking for a hand-out in this "who can I sue next since I don't take any responsibility for anything" society.

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30. Still Scared of Dinosaurs on November 19, 2008 9:50 AM writes...

Talking about a "signal/noise ratio" made sense when the signals were clearly defined. Speaking as an industry biostatistician my problem characterizing the safety profile of new drugs is that the signals are so poor. The mindbendingly poor quality of a lot of clinical lab data is one of the dirty little secrets of the clinical trials industry. The main signal generator these days is the MEDDRA coding system for AEs and it is such a pathetic botch it barely qualifies as better than nothing.

Yes, nost of the time the volumne of data overwhelms the faults of the points and a reasonable conclusion can be reached as to whether the safety concerns are justified given the expected efficacy. It's only the important cases where these faults tend to inhibit the analysis and interpretation.

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31. utah gastroenterology on December 18, 2008 10:28 PM writes...

It seems the courts have done a few too many "extra-curricular" drugs and have melted some important brain cells. This is ridicules.

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