Generic pills in black and white filter
28 April 2015

Why Generic Drug Manufacturers Can’t Revise Their Own Warning Labels

In 2006, GlaxoSmithKline’s patent on Zofran expired, and a wave of generic drug manufacturers quickly entered the market. At one point, no less than 34 different companies manufactured their own versions of Zofran’s active ingredient, ondansetron, for sale in the US. But over the last nine years, that field has dwindled through a series of mergers and acquisitions, leaving only big generic players like Teva Pharmaceuticals and Mylan.

Despite its numerous producers, ondansetron has always been approved for the same indications, the treatment of severe nausea and vomiting in patients undergo ing radiotherapy, chemotherapy and surgical anesthesia. Despite these limited FDA approvals, physicians have found another use for the drug: treating the symptoms of morning sickness during early pregnancy.

But now that four recent studies have linked ondansetron to an increased risk of birth defects, the existence of so many generic equivalents adds a new layer of complexity to the ongoing litigation initiated by seven US families who have brought legal claims against Zofran’s manufacturer.

In this article, we’ll take a look at the FDA approval process and learn how it’s significantly different for companies who make generic drugs. Along the way, we’ll discover a troubling loophole that actually prevents generic pharmaceutical manufacturers from warning the public of emerging health risks, while protecting them from liability when those risks end up harming patients.

Gray Areas: Generic Drugs & The Liability Loophole Generic pills in black and white filter

Pharmaceutical manufacturers pour enormous amounts of money into the development of new drugs, or “new molecular entities” as they are known during the early stages of research and development. According to a study conducted by the Congressional Budget Office, the average cost to develop an “innovative” drug is more than $800 million, and it takes 12 years for the average drug to go from initial conception to final approval.

After a lengthy approval process, new drugs that have found to be safe and effective are released onto the US market. But a drug’s manufacturer is rewarded for their expenditure, as well as the risk they took in developing something innovative in the first place, through patent protection.

Bruce Lehman, president of the International Intellectual Property Institute, writes that “in the pharmaceutical, chemical and biotechnology industries the patent normally equals the product, and protects the extensive investment in research and clinical testing required before placing it on the market.”

How long any one pharmaceutical product will be protected by a patent varies depending on what kind of drug it is, but most brand name medications in the US are legally defended from competition for 20 years. That time period becomes a lot shorter when you consider that most drug manufacturers apply for patents well before beginning the FDA approval process, which can take more than a decade.

Once a new drug is put on the market, it’s not uncommon for the patent to expire within ten or even seven years.

After A Drug’s Patent Expires

It’s only at this point, when an innovative drug’s initial patent expires, that generics enter the picture. After patent protection is gone, a horde of new players can join the fray.

But generic drug manufacturers don’t have to repeat all the work that a drug’s innovator did. Instead, they only have to prove that their generic is “bioequivalent” to the original drug, that it functions within the human body in the same way.

How Are Generic Drugs Approved?

Whereas innovators must submit New Drug Applications (NDA) to the FDA, and include the results of preclinical and clinical trials to establish the safety and efficacy of their product, generic manufacturers need only submit Abbreviated New Drug Applications (ANDA).

NDAs and ANDAs are similar in substantial ways. Both applications must detail a drug’s chemical makeup and process of manufacture, along with its intended labeling. But while NDAs require that innovators demonstrate a drug’s safety and efficacy through studies in animals and humans, generic manufacturers only have to demonstrate bioequivalence to a branded product.

In essence, generic manufacturers can “piggyback” on the results of a branded study’s clinical trials, if they can prove that their drug works in the same way. And when they do, generics flood the market, increasing competition and lowering costs for consumers.

Generic Drugs Save Americans $73.4 Billion Every Year

According to the National Bureau of Economic Research, 70% of all prescriptions sold during 2010 were generic drugs. Only 26 years earlier, brand name medications captured around 81% of the market.

Generics are significantly cheaper than brand name drugs. The Pharmaceutical Care Management Association (PCMA) found that in 2009, the average brand name drug cost $155, while the average generic cost only $40. It’s this vast disparity in price that explains why 70% of all prescriptions sold in the US are for generics, but these sales account for only 22% of America’s total prescription costs.

According to the PCMA, using generics over brands saved the US healthcare system $734 billion from 1999 to 2009. All of which sounds great for the average American consumer. But there’s a critical flaw in the way that generic drugs are regulated in the US, one that may even threaten the safety of the US population.

Learning From Experience: How New Drug Risks Are Identified

A new drug’s labeling is written by its manufacturer, and then submitted to the FDA for review. Labels contain essential information valuable to both patients and physicians. Doctors can learn what conditions a drug is meant to treat, which side effects have been associated with it and whether or not it’s been found safe in specific populations, like pregnant women or pediatric patients.

Drug labels also include the results of preclinical and clinical trials that were performed to demonstrate the product’s safety and efficacy. But since drugs are formally approved only for specific conditions, manufacturers are only required to test them in human subjects suffering from those conditions. In reality, a drug’s safety and efficacy has only been scientifically demonstrated for a limited subset of the population upon initial approval.

But once a drug is approved for sale, physicians are free to prescribe it “off-label,” for unapproved uses, and we often learn new things about a drug after it’s been prescribed to a wider segment of the population.

Researchers can perform epidemiological studies, and investigate the effects of a drug after it has been prescribed to people in different circumstances. This is what happened in the case of Zofran. Once the health community learned that Zofran was being prescribed frequently to pregnant women, but had never been studied during pregnancy, teams of researchers in Denmark, Sweden, Australia and the US began looking at the pregnancy outcomes of women who had been prescribed ondansetron. The majority of these studies concluded that babies who had been exposed to ondansetron during the first trimester were more likely to be born with birth defects than babies who had not.

Alternatively, patients and physicians can submit “Adverse Event Reports” to a drug manufacturer, or directly to the FDA, when a prescription causes some harmful effect. Several recent lawsuits have claimed that GlaxoSmithKline has received as many as 200 reports of birth defects associated with exposure to Zofran.

Either way, when new risks are identified, a drug’s label must be revised to include this new information. Notably, Zofran’s warning label has not been amended to include any information on a possible risk of birth defects. Plaintiffs in the Zofran birth defect lawsuits allege that GlaxoSmithKline should have revised its label long ago, but has failed to do so.

When it comes to generic drug labeling, the situation is even more complicated.

The Problem With Generic Drug Labeling

Generics are required to be almost exactly the same as the brand name drugs upon which they are based, and that requirement goes for their labeling, too.

According to 21 CFR 314.94(a)(8)(iv), a statute in the Code of Federal Regulations, labeling for a generic drug “must be the same as the labeling approved” for the branded drug with which it is bioequivalent. “Same” in this case means “identical.” There are certain exceptions to this requirement.

According to the Regulatory Affairs Professionals Society, this controversial regulation is “meant to ensure a generic drug is not seen as more (or less) safe or effective than its innovative product.” But the fact that generics have to mimic branded labeling creates two, closely interconnected problems.

Let’s say that a generic drug manufacturer becomes aware of a serious adverse event associated with one of its products, but the original manufacturer of the drug is still unaware of the danger. Even though the generic company has knowledge of this new risk, federal law does not require the generic manufacturer to update the drug’s label. In fact, it is a difficult process if the generic manufacturer wants to have a different label. And what if the company that created the innovator drug has since gone out of business? Or chooses not to push for a labeling revision?

This is a public health issue: consumers and physicians may not be warned of newly-identified risks, even ones that a drug company is aware of. And it creates a legal problem, too.

When consumers are hurt by prescription drugs, their main avenue for recourse is through a “failure to warn” lawsuit. In these claims, a plaintiff will argue that a drug company was, or should have been, aware of a particular risk, but failed to provide sufficient warning of that risk in the drug’s labeling.

But what happens if a consumer is harmed by a generic drug? Can the generic manufacturer be held liable for “failure to warn” if it is legally prohibited from altering its own labeling?

Protecting The Generic Loophole

Thus far, the US Supreme Court has answered that last question with a resounding “No” in several recent decisions.

In the cases Pliva v. Mensing (2011) and Mutual v. Bartlett (2013), the Court has held that federal regulations prohibiting generic drug manufacturers from revising warning labels pre-empt “failure to warn” claims based on state tort laws.

In both cases, plaintiffs had been injured by generic drugs, and argued that the drug’s labels did not sufficiently warn of the adverse risks they suffered. As a result, they claimed that the manufacturers should be held liable under state “failure to warn” laws. But the Court ruled that the manufacturers could not be held liable for the content of the labels, inadequate or not, since federal regulations required those labels to be identical to the ones on the original branded products at all times.

The Court’s decisions strongly suggest that a generic drug’s manufacturer cannot be held liable for a “failure to warn.” Even though many state laws require drug manufacturers to adequately warn consumers of all known adverse risks, the Court has held that this requirement conflicts with, and is invalidated by, the federal laws prohibiting generic manufacturers from revising their own labels.

Can The Generic Drug Loophole Be Closed?

In November of 2013, the FDA proposed a rule that would allow generic drug manufacturers to immediately revise their warning labels with new safety-related information. Generic companies have strongly opposed this idea, saying it would open them up to significant legal liabilities, including the “failure to warn” lawsuits from which they are currently protected. Some legislators have even expressed concerns that the rule would be illegal, since some generics would inevitably end up with labels different than their innovator drugs. The law as it is currently written prohibits the FDA from allowing such differences.

Resistance was so great that the FDA delayed its ruling on the proposal, pushing the deadline back to 2015. But now that 2015 is here, the FDA has shown signs that it is again considering putting the rule in place.

Take Justice Back, a grassroots organization dedicated to curbing corporate America’s influence in politics and legislation, has started a petition on Change.org. Here’s their statement, and you can add your own electronic signature in support at this link:

“We believe it is critically important that all prescription medicines, including generic drugs, carry current and accurate safety warnings. Both brand name and generic manufacturers should be held accountable for the safety of their products.

We applaud the FDA for your proposal to fix the generic drug safety loophole, but we are concerned that the rule has been delayed. We urge you to finalize the generic drug labeling proposal as promptly as possible. Safety is an issue that cannot wait.”