Demahy v. Actavis, Inc., 08-31204.

CourtUnited States Courts of Appeals. United States Court of Appeals (5th Circuit)
Writing for the CourtPatrick E. Higginbotham
Citation593 F.3d 428
PartiesJulie DEMAHY, Plaintiff-Appellee, v. ACTAVIS, INC., Individually and as Successor in Interest of Purepac Pharmaceutical Company, Defendant-Appellant.
Docket NumberNo. 08-31204.,08-31204.
Decision Date08 January 2010
593 F.3d 428
Julie DEMAHY, Plaintiff-Appellee,
ACTAVIS, INC., Individually and as Successor in Interest of Purepac Pharmaceutical Company, Defendant-Appellant.
No. 08-31204.
United States Court of Appeals, Fifth Circuit.
January 8, 2010.

[593 F.3d 429]

Kristine K. Sims, Brian Leonard Glorioso, Richard Alvin Tonry, II, Tonry, Brinson & Glorioso, Slidell, LA, Louis M. Bograd (argued), Center for Constitutional Lit., P.C., Washington, DC, for Plaintiff-Appellee.

Richard A. Dean (argued), Irene Childress Keyse-Walker, Kristen Lepke Mayer, Tucker, Ellis & West, LLP, Cleveland, OH, Elizabeth Haecker Ryan, Lemle & Kelleher, L.L.P., New Orleans, LA, for Defendant-Appellant.

Joseph P. Thomas, Linda E. Maichl, Ulmer & Berne, L.L.P., Cincinnati, OH, for Pliva, Inc., Amicus Curiae.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before KING, HIGGINBOTHAM and CLEMENT, Circuit Judges.

[593 F.3d 430]


This case presents one issue on appeal: whether the federal regulatory regime governing pharmaceuticals preempts state-law failure-to-warn claims against manufacturers of generic drugs. The Supreme Court held, in Wyeth v. Levine, that such claims are not preempted against name brand drug manufacturers.1 While not directing our result, it shadows our conclusion that the federal regulatory regime governing generics is also without preemptive effect.


Julie Demahy's physician prescribed the drug Reglan to treat her gastroesophageal reflux. For the next four years, Demahy's pharmacy filled her prescription with the generic form of Reglan, metoclopramide, manufactured by Actavis.2 Demahy alleges that its long-term ingestion caused her to develop tardive dyskinesia, a neurological movement disorder.

The Food and Drug Administration (FDA) approved Reglan in 1980, and Actavis began manufacturing generic metoclopramide thereafter. In 1985, the FDA required that Reglan's label be updated to include a warning regarding the risk of developing tardive dyskinesia. Actavis revised its labeling to comport with these changes to the Reglan label. There is no dispute that the generic drug's label was at all relevant times the same as Reglan's. In February 2009, the FDA issued a labeling revision for metoclopramide meant to warn of the risk of prolonged use, defined as use for more than 12 weeks.3

Demahy asserts claims of personal injury under the Louisiana Products Liability Act for, inter alia, failure to warn of the risks of neurological disorder after long-term use of metoclopramide.4 Specifically, Demahy argues that Actavis ignored scientific and medical literature establishing a higher risk of developing tardive dyskinesia, failed to request a labeling revision from the FDA, failed to change the label itself even though no prior FDA approval was required, and failed to report safety information directly to the medical community.

Actavis moved to dismiss Demahy's claims, arguing that they rested on duties imposed by state law that could not be met under federal law—that they were conflict preempted. The district court denied the motion as to the failure-to-warn claims.5 Since then, one sister circuit—the Eighth6 —has considered the issue, which has split

593 F.3d 431

a rapidly growing number of district courts;7 it held that state tort law is not preempted.8 Appeals involving materially identical preemption claims are now pending before the Sixth Circuit.9 Our review here is de novo.10


All prescription drugs marketed in this country must first receive FDA approval. Manufacturers of new drugs must submit a new drug application (NDA) to the FDA that demonstrates the drug's effectiveness and safety for its intended use.11 The 1962 Food, Drug and Cosmetics Act (FDCA) established this avenue for pioneer drugs, with the core objective of ensuring that drugs are both safe and effective;12 the FDA has codified the NDA regulations at 21 C.F.R. Part 314. New drug approval requires, among other deliverables, the results of successful clinical trials13 and labeling

593 F.3d 432

that accurately portrays the benefits and risks of the drug, as indicated by those trials and other data.14 "Before approving an NDA ... [the] FDA undertakes a detailed review of the proposed labeling, allowing only information for which there is a scientific basis to be included in the FDA-approved labeling."15 The FDA will reject the proposed labeling if "based on a fair evaluation of all material facts, such labeling is false or misleading in any particular."16

Contrast this with the simpler, less demanding approval process required of generic drugs. In 1984, Congress passed the Hatch-Waxman Amendments to the FDCA, which altered the federal regulatory regime governing generics. Thanks to these Amendments, once a pioneer drug loses patent protection, a drug company may seek permission to market a generic version through a significantly simplified process, known as the abbreviated new drug application procedure, or ANDA.17 ANDA drugs must be the "same as" a name brand drug that has already been approved by the FDA as to active ingredients, route of administration, dosage form, strength, and conditions of use recommended in the labeling.18 Under Hatch-Waxman, generic drug manufacturers need not repeat the clinical work of their name brand counterparts, but instead must only establish the generic drug's bioequivalence with the name brand drug.19 By avoiding "unnecessary," "wasteful," and "unethical" duplication of previously-performed human clinical trials,20 Congress meant "to provide a careful balance between promoting competition among pioneer ... and generic drugs, and encouraging research and innovation."21 In turn, this increased competition, coupled with the elimination of "retesting" of a drug that has already been determined to be safe and effective,22 would result in significant cost savings to the American public.23 Indeed, the Congressional Budget Office estimated that generic drugs save American consumers between $8 billion and $10 billion each year.24 Generic drugs now account for seven out of ten prescriptions filled in the United States.25

593 F.3d 433

In their application, generic manufacturers must also show "that the labeling proposed for the new drug is the same as the labeling approved for the listed drug."26 Applying to market a generic drug, then, requires "[a] statement that the applicant's proposed labeling is the same as the labeling of the reference listed drug except for" enumerated differences irrelevant here; without such a statement, the FDA will deny the application.27


The Supreme Court ruled in Levine that the federal regulatory regime governing pharmaceuticals does not preempt a state-law failure-to-warn claim against the manufacturer of a name brand drug. Actavis urges that generic drugs are different because the manufacturer of a name brand drug may change its label unilaterally— through the "changes being effected" (CBE) process—while seeking the FDA's approval of the change. According to Actavis, a generic manufacturer, in contrast, must produce the same drug and use the same label as the name brand drug manufacturer.

The Levine Court did rely in part on the availability of the CBE process to reject the claim—advanced by a name brand manufacturer—that it was "impossible ... to comply with both the state-law duties underlying those claims and its federal labeling duties."28 The Court explained that once the risk to consumers has become "apparent," triggering a state-law duty to warn of it, "the CBE regulation permit[s] [the manufacturer] to provide such a warning before receiving the FDA's approval."29 Though "the FDA retains authority to reject labeling changes made pursuant to the CBE regulation," the Court declined to "conclude that it was impossible for [the manufacturer] to comply with both federal and state requirements" without "clear evidence that the FDA would not have approved a change" to implement the warning.30

Justice Breyer wrote separately "to emphasize the Court's statement that `we have no occasion in this case to consider the pre-emptive effect of a specific agency regulation bearing the force of law'"31 and to accent the FDA's ability to "determine whether and when state tort law acts as a help or a hindrance to achieving the safe drug-related medical care that Congress sought" through "lawful specific regulations describing, for example, when labeling requirements serve as a ceiling as well as a floor."32 Because no such regulation was at issue in Levine, Breyer agreed with the majority that state law was not preempted.33

Actavis rightly points out that Levine is not the case before us. It does, however, carry important implications for Actavis's situation as well.


Here, as in every preemption case, "[t]he purpose of Congress is the

593 F.3d 434

ultimate touchstone."34 Congressional intent to preempt state law can either be expressed in statutory language or implied in the aim and structure of federal law.35 Implied preemption comes in two forms: field and conflict preemption. Field preemption is inferred where federal law is so pervasive that it leaves no room for state supplementation.36 When Congress has not completely displaced the possibility of state regulation, preemption may nonetheless occur when state law "actually conflicts" with federal law.37 This conflict might be with a federal statute or an "agency regulation with the force of law."38 Actavis asserts that Demahy's claims are conflict preempted: that it is impossible to comply with both federal and state law,39 or, alternatively that state law poses an unacceptable "obstacle to the accomplishment and execution of the full purposes and objectives of Congress."40 More specifically, Actavis contends that it is impossible to comply with both the federal regulatory regime governing generic drugs and the putative state-imposed duty to...

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