In a sharply divided 5-4 decision, the Corporate Court took another step today to immunize generic drug makers from lawsuits under state law holding them accountable for selling prescription drugs that can be particularly dangerous even when taken as directed. Justice Alito's majority opinion in Mutual Pharmaceutical v. Bartlett  undermines the state product liability laws around the country.
States have product liability laws to protect consumers from dangerous products: If a business sells a dangerous product, it's responsible for the damage it causes. It has proven to be an effective way to compensate injured consumers and create an incentive for companies not to market dangerous products. That is why, even though Congress closely regulates prescription drugs, it has not chosen to enact a blanket preemption of state laws also regulating prescription drugs, even while it has adopted such provisions for other products that are regulated by the FDA.
But today, the Corporate Court ruled that pharmaceutical companies that make generic drugs can't be sued under state product liability law for selling a dangerous drug, even when – as in this case – the company learned that it was more dangerous than known at the time of FDA approval.
In 2005, after Karen Bartlett took a generic drug called sulindac, she had a severe reaction that kept her in the hospital for 70 days: 60-65 percent of her skin had deteriorated, burned off, or turned into an open wound. Her injuries were permanent and resulted in near blindness.
She sued Mutual Pharmaceutical under New Hampshire state law, claiming the drug had a design defect. At trial, she showed that after FDA approval, new research and incident reports to the FDA showed the drug had a worse record of causing this reaction than other available drugs, and that its safety record was comparable to drugs that had been taken off the market for safety reasons. A jury awarded her over $20 million in compensatory damages.
Although prescription drugs are regulated by the FDA, the Supreme Court has held in the past that state laws serves as a complementary form of regulation. For instance, they ruled that you can sue a brand-name drug manufacturer under state law for failing to adequately warn consumers about the dangers of their product, even if they are using an FDA-approved warning label. But two years ago in PLIVA v. Mensing, the five conservatives issued a pro-corporate ruling  that generic drug makers doing the same thing can't be sued under state "failure to warn" laws because they have no choice under federal law but to use the same label as the brand name drug; it would be impossible to comply with both state "failure to warn" and federal labeling laws, so you can't sue them for violating the state law. This is called the doctrine of "impossibility pre-emption."
Since a state product liability lawsuit is very different from a "failure to warn" case, it is not "impossible" to obey both and federal and New Hampshire's laws. The generic drug manufacturer had options other than unilaterally changing the federally-approved label (which is could not do under federal law). It could have stopped selling the drug in that state. Alternatively, it could have paid compensation to victims like Bartlett under state law as a cost of doing business there.
There is certainly no reason under federal law to block lawsuits like Karen Bartlett's. Nevertheless, that is just what the Roberts Court has done, and generic drug makers around the world have another way to avoid being held accountable for their actions.
Justice Sotomayor's dissent strongly suggests that the majority is simply imposing its own policy preferences rather than following the law:
[The] Court's solemn affirmation that it merely discharges its duty to "follo[w] the law," and gives effect to Congress' policy judgment, rather than its own, is hard to accept. By once again expanding the scope of impossibility pre-emption, the Court turns Congress' intent on its head and arrives at a holding that is irreconcilable with our precedents. As a result, the Court has left a seriously injured consumer without any remedy despite Congress' explicit efforts to preserve state common-law liability.
Unfortunately, imposing their own policy preferences is the hallmark of the Corporate Court .