PA Court Rules that Drug Companies are Liable for Off-Label Generic Use; Touches on Preemption Issue

March 25, 2008

Last week, the Pennsylvania Court of Common Pleas of Philadelphia County (the lowest court of general jurisdiction in Pennsylvania) ruled in Clark v. Pfizer, Inc., Case No. 1819 (June Term 2004) – a class action lawsuit in which the plaintiffs allege that Parke-Davis (then a Warner-Lambert and now a Pfizer subsidiary) fraudulently promoted the anticonvulsant drug product NEURONTIN (gabapentin) for “off-label” uses (i.e., uses not approved by FDA) – that drug companies may have a legal obligation to class members for the money spent on generic versions of the drug product.  The class action lawsuit, brought on behalf of a certified class of persons “who purchased Neurontin, or its generic equivalent, gabapentin, in the Commonwealth of Pennsylvania” for unapproved uses, stems from a May 2004 agreement in which Warner-Lambert pled guilty to charges of illegally marketing NEURONTIN for off-label uses and paid $430 million to resolve federal charges.  NEURONTIN is approved in capsule, tablet, and oral solution dosage forms for the treatment of partial seizures associated with epilepsy and for the management of post-herpetic neuralgia.

The complaint (amended) in the lawsuit alleges that Gregory Clark and other plaintiffs were prescribed NEURONTIN for off-label uses (e.g., knee pain and bipolar disorder) “as a direct result of defendant’s active marketing and promotion of Neurontin for unapproved uses,” and that “plaintiffs and the class members sustained injuries, including ascertainable economic losses, by purchasing Neurontin” “as a direct and proximate result of [such] marketing and promotional schemes.”  The complaint includes several counts, including misrepresentation, negligence, negligence per se, breach of express warranty, and violations of the Pennsylvania unfair trade practices and consumer protection law. 

Judge Mark I. Bernstein’s March 14, 2008 ruling on Pfizer’s Motion for Partial Summary Judgment let stand the class action claims of negligent misrepresentation, negligence, and intentional misrepresentation regarding generic NEURONTIN manufactured by third-party drug companies.  “The legal question presented by this Motion for Partial Summary Judgment is whether under Pennsylvania Law, a drug company which negligently or intentionally perpetrates a fraud upon the medical community may be held responsible for sums paid to other drug manufacturers because of their misrepresentations,” Judge Bernstein states in his opinion. Assuming that the plaintiffs can prove their allegations at trial, “[u]nder Pennsylvania law, a defendant may be liable for misrepresentation to foreseeable plaintiffs even without any direct relations between the parties.”  According to the opinion:

Given the presumption that plaintiffs will be able to factually prove their allegations, the question presented becomes whether under Pennsylvania law, defendants owed any duty for which they can be held liable to purchasers of the drug because defendants had reason to anticipate those individuals would be induced to act.  The sale of generic Gabapentin for non-approved uses was not only foreseeable and predictable, but in fact predicted.  A heavily and successfully marketed drug will, at the time exclusive rights to the formulation have passed, be copied and sold by competitors as a generic equivalent.  The medical literature which plaintiffs claim was manipulated by defendants’, often referred to the generic chemical name rather than the defendants’ brand name.  When generic drugs become available they are often required by law or insurance companies to be prescribed as a substitute unless a physician specifically designates a brand name drug. . . . Defendants themselves estimated that Neurontin would lose between 65 and 95 percent of its market once its patents had expired.  Accordingly, defendant Pfizer proposed manufacturing its own “authorized” generic, to keep a portion of that market.  The significant increased sale of generic Gabapentin was a foreseeable result of defendants actions in marketing Neurontin for “off-label” use. 

The Pennsylvania court’s decision is contrary to other court decisions, which have found that the manufacturer of a brand name (i.e., innovator) drug product does not have a duty to those persons who purchase generic versions of the drug.  For example, the U.S. Court of Appeals for the Fourth Circuit held in 1994 in Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994), that an innovator drug manufacturer does not owe a legal duty to a consumer of a generic drug.  Indeed, the U.S. District Court for the Eastern District of Pennsylvania stated in dicta in its May 2006 opinion in Colacicco v. Apotex, Inc., 432 F. Supp. 2d 514 (E.D.P.A. 2006) (which is on appeal to the U.S. Court of Appeals for the Third Circuit), that “name brand drug manufacturer does not owe a legal duty to consumers of a generic equivalent of its drug . . . .”  Nevertheless Judge Bernstein, citing the Pennsylvania Supreme Court’s 5-part test in Althaus v. Cohen, 756 A.2d 1166 (Pa. 2000), for determining whether a duty exists as discussed, determined that a duty existed for Pfizer. 

Judge Bernstein’s opinion also opines on the Colacicco case with respect to preemption of state law and takes a stab at FDA’s current pro-preemption policy on drug labeling.

Giving excessive deference to [FDA’s] reinterpretation of the Statute and the Regulations it administers as to preemption, the Colacicco Court found state claims preempted.  While taking the opposite position for many years, in 2006 the FDA promulgated a “preemption preamble” [(see pages 3933-36)] which for the first time stated that FDA labeling requirements did not represent a minimal safety standard, but did in fact “establish both ‘floor’ and ‘ceiling’.”  Although it might be said that this preamble was a politically motivated legal opinion about statutory construction and not one of “agency expertise,” in the field of Pharmaceuticals, the Colacicco Court found that the “FDA has acted within its authority and this Court must respect its expert judgment that an October 2003 warning label other than approved by the FDA would have been in direct actual conflict with Federal law.”  In contradiction, it is plaintiff herein who supports the FDA in the proposition that in violation of Federal law, defendants unlawfully manipulated scientific “truth” to convince by misrepresentation the entire medical community of the proposition that Gabapentin could be therapeutically used for indications never approved by the FDA.

While State Courts respect the reasoning of Federal Courts particularly when interpreting Federal law issues of nationwide import which impact upon Federal-State relations, the right of each sovereign State to protect its citizens is a matter of State law interpretation protected by the 10th Amendment to the United States Constitution.  As a Pennsylvania Trial Court, this Court is obligated to enforce state law until such time as the Supreme Court of the United States having actual authority determines that state law has been preempted.


Additional information on Clark v. Pfizer, Inc. is available from The Legal Intelligencer.

By Kurt R. Karst    

Categories: Drug Development