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Repositioning Generics: The Comparative Value of Liability in FDA's Proposed Rule on Labeling

Published online by Cambridge University Press:  06 January 2021

Nicholas Falcone*
Boston University School of Law, Boston University School of Public Health Economics, The College of New Jersey


Generic drugs occupy a unique position in the U.S. pharmaceuticals market. On one hand, generics are a product of basic free-market economic reasoning. Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman) based on the uncontroversial assumption that inexpensive generic competition would reduce prescription drug costs. On the other hand, the generic drug industry is primarily a regulatory creation; Hatch-Waxman facilitates generic competition by permitting generic manufacturers to rely heavily on prior expenditures of pioneer drug manufacturers, including those required to convince the Food and Drug Administration (FDA) that a drug is safe and efficacious. Propelled by federal law, generics have evolved from their minority market position as cheap alternatives to a “dominant” market position—today, they fill about 80% of prescriptions nationwide.

Copyright © American Society of Law, Medicine and Ethics and Boston University 2015

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1 The Drug Price Competition and Patent Term Restoration Act of 1984 is commonly known as the “Hatch-Waxman Act” or “Hatch-Waxman Amendments.” See, e.g., Daniel E. Troy, Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments), FDA (Aug. 1, 2003),

2 Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified at 21 U.S.C. §§ 355, 360cc (2012) and 35 U.S.C. §§ 156, 271, 282 (2012)); see also Nussbaum, Linda P. & Radice, John D., Where Do We Go Now? The Hatch-Waxman Act Twenty-Five Years Later: Successes, Failures, and Prescriptions for the Future, 41 Rutgers L.J. 229, 231 (2009)Google Scholar.

3 See generally 21 U.S.C. § 355(j); 21 C.F.R. § 314.94 (2014).

4 PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2583 (2011) (Sotomayor, J., dissenting).

5 Letter from House Democrats to Margaret Hamburg, Comm'r, FDA, Re: Proposed Rule for Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products 2 (Mar. 5, 2014); The Industry, Generic Pharmaceutical Ass'n, (last visited May 10, 2015).

6 See infra Part II.A.

7 21 U.S.C. § 355(j)(2)(A)(v). The statute requires that an ANDA show the labels are the same “except for changes required because of differences approved under a [suitability petition], or because the new drug and the listed drug are produced or distributed by different manufacturers.” Id.

8 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985, 67,988 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601); see also 21 C.F.R. § 314.150(b)(10). FDA may initiate withdrawal proceedings if a generic applicant violates this requirement. See id.

9 “[I]f an ANDA holder believes that newly acquired safety information should be added to its product labeling, it should provide adequate supporting information to FDA, and FDA will determine whether the labeling for the generic drug(s) and the [reference listed drug] should be revised.” Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. at 67,988.

10 See Pub. Citizen, Generic Drug Labeling: A Report on Serious Warnings Added to Approved Drugs and on Generic Drugs Marketed Without a Brand-Name Equivalent 6 (giving several examples of “severe risks set forth in boxed warnings that were added many years after approval of a drug and introduction of a generic equivalent onto the market”). For instance: “Haloperidol is an antipsychotic drug approved by the FDA in 1967 as brand name Haldol. In 2007, the FDA announced that the sponsor had updated the warning label due to reports of sudden death and heart-related side-effects. In 2008, the FDA required manufacturers of haloperidol and many other antipsychotic drugs to add black box warnings following the release of several studies suggesting that the use of these types of drugs to treat elderly patients with dementia increased the risk of death among these patients.” Id. at 8. This example illustrates that brand-name drug manufacturers, such as the manufacturer of Haldol, may communicate important safety information to patients immediately. Generics manufacturers, on the other hand, may not. Instead, patients on generic medication receive updated warnings only after full FDA review.

11 PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2577-78 (2011).

12 Id.

13 Mut. Pharm. Co. v. Bartlett, 133 S. Ct. 2466, 2479 (2013).

14 PLIVA, 131 S. Ct. at 2574, 2579 (citing Wyeth v. Levine, 555 U.S. 555, 573 (2009)).

15 Wyeth, 555 U.S. at 573.

16 Id. The CBE-0 process is “a narrow exception to the general requirement for FDA approval of revised labeling prior to distribution.” In relevant part, it permits brand-name manufacturers to update drug labels unilaterally to reflect newly acquired patient safety information. For a more thorough description, see infra Part II.B. FDA's proposed rule, detailed infra at Part II.C, would extend this process to generic manufacturers.

17 PLIVA, 131 S. Ct. at 2593 (Sotomayor, J., dissenting). Foreshadowing FDA's reasoning behind its proposed rule, Justice Sotomayor noted that this outcome is inappropriate largely because of generics' growth since their effective debut in 1984, when they “constituted 19 percent of drugs sold in this country” to today, when “they dominate the market.” Id. at 2584.

18 See generally Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601). In November 2014, FDA announced that it will delay finalizing the rule until the fall of 2015. See Ed Silverman, FDA Delays Final Rule on Allowing Generic Drug Makers to Update Labels, Wall St. J. Pharmalot (Nov. 18, 2014, 8:46 AM),

19 See, e.g., Diab, Tony M., Too Good to Last? Will the FDA's Proposed Rule Put an End to Generic Drug Preemption Under Mensing and Bartlett?, 82 Def. Couns. J. 28, 37-40 (2015)Google Scholar (summarizing a likely consequence of FDA's proposal and discussing whether the proposal is inconsistent with statutory labeling requirements).

20 FDA's proposal will generate indirect costs unrelated to liability. For instance, many stakeholders suggest that empowering generics manufacturers to change labeling unilaterally will cause the “same” drug to have different labels, and thus will create consumer confusion. For more information about these confusion costs, see infra note 167.

21 See PLIVA, 131 S. Ct. at 2593 (Sotomayor, J., dissenting).

22 Examining Concerns Regarding FDA's Proposed Changes to Generic Drug Labeling: Hearing Before the Subcomm. on Health of the H. Comm. on Energy & Commerce, 113th Cong. 1 (2014) (statement of Rep. Henry A. Waxman, Ranking Member, H. Comm. on Energy & Commerce).

23 See id.

24 See Allergan, Inc. v. Alcon Labs., Inc., 324 F.3d 1322, 1325 (Fed. Cir. 2003) (explaining that before Hatch-Waxman, mandatory clinical trials “resulted in long delays between the time when a brand name drug manufacturer received a patent for a new drug and the drug reached the market. It also resulted in long delays between the time when the patent expired and generic drug manufacturers were able to market a generic version of the drug. The Hatch-Waxman Act sought to address this situation by providing brand name drug manufacturers with limited extensions of their patent terms in order to restore a portion of the market exclusivity lost through the lengthy process of drug development and FDA approval.”).

25 Id. (“At the same time, to counter [the benefit of patent extensions] to the brand-name manufacturers, the Act provided generic drug manufacturers with a patent infringement exemption for experimentation in connection with an application for FDA approval of a generic drug. It also provided a shortened FDA approval process for generic drugs.”).

26 Federal Food, Drug, and Cosmetic Act § 505(j), 21 U.S.C. § 355(j) (2012).

27 See 35 U.S.C. § 154.

28 See 21 C.F.R. § 314.108 (2014).

29 See id. § 312.20.

30 See id. § 314.2.

31 See id. § 314.105.

32 21 U.S.C. § 355(j)(2)(A)(i).

33 Id. § 355(j)(2)(A)(ii).

34 Id. § 355(j)(2)(A)(iii).

35 Id. § 355(j)(2)(A)(iv).

36 Id. § 355(j)(2)(A)(v).

37 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985, 67,988 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601) (internal citation omitted).

38 PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2584 (2011) (Sotomayor, J., dissenting).

39 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. at 67,988.

40 Id.

41 Carrier, Michael A., Unsettling Drug Patent Settlements: A Framework for Presumptive Illegality, 108 Mich. L. Rev. 37, 49-50 (2009)Google ScholarPubMed.

42 Cong. Budget Office, How Increased Competition from Generic Drugs Has Affected Prices and Returns in the Pharmaceutical Industry xiii (1998), available at

43 See Generic Pharm. Ass'n, Overview and Assessment: Food and Drug Administration's Proposed Rule Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products 5 (2014).

44 Id.

45 See Shrank, William H. et al., State Generic Substitution Laws Can Lower Drug Outlays Under Medicaid, 29 Health Aff. 1383, 1383 (2010)CrossRefGoogle ScholarPubMed.

46 Id.

47 These laws “require pharmacists to substitute a generic for a brand name medication if the prescriber did not specify that the latter should be dispensed.” Id. at 1384.

48 These laws permit, but do not require, pharmacists to dispense generics as substitutes for brand-name drugs. See id.

49 See id.

50 See Id. at 1383 (“[S]tep therapy [involves] starting patients on one relatively low cost drug, and moving to a more costly medication if the fist doesn't work.”).

51 See id.

52 See id. at 1388 (“It is not surprising that requiring patients to provide consent would limit generic substitution. Recent surveys indicate that most patients believe that generics are safe and effective, that generics offer greater value than brand-name medications, and that more Americans should use generics. However, a majority of patients do not agree when asked if they, personally, prefer to use generics. Poor patients and less-educated patients—groups more likely to be covered by Medicaid—are least likely to express positive views of generics.”).

53 Id.

54 Valerie Bauman, Insurers Entice Doctors to Prescribe Generic Drugs, USA Today (Oct. 29, 2009, 4:03 PM), (“For example, Independent Health, a Buffalo, N.Y.-based insurer, offered doctors who prescribe 70 percent or more generic prescriptions in a month a bonus of 50 cents per patient per month. A doctor seeing 500 patients per month who meets the 70 percent minimum can collect $3,000 a year.”).

55 State substitution laws and certain health insurance practices can be considered Hatch-Waxman's “progeny” because they too promote large-scale generic competition.

56 Katie Thomas, U.S. Drug Costs Dropped in 2012, but Rises Loom, N.Y. Times (Mar. 18, 2013), Moreover, some concern exists that drug prices, in general, will begin to rise more steadily as a result of the “saturation” and increased prevalence of expensive specialty biologics. See id. In 2013, “IMS Health … predicted that drug sales will rise by more than 4 percent in 2014, because of fewer brand-name drugs losing patent protection and also an influx of newly insured patients with the putting in force of the federal health care law. Sales growth will then dip slightly to just over 2 percent in 2015, another year in which several big drugs are expected to lose their patent protection, before rising faster again in 2016 to nearly 4 percent.” Id.

57 See id.

58 Id.

59 See Ed Silverman, Lawmakers Probe ‘Staggering’ Price Hikes for Generic Drugs, Wall St. J. Pharmalot (Oct. 2, 2014, 4:19 PM),

60 Id. For instance, a 100-pill bottle of Albuteral Sulfate, a treatment for asthma and other lung conditions, cost $11 in October 2013, but $434 by April 2014. “[T]he doxycycline hyclate antibiotic cost $20 last October for a bottle of 500 tablets, but by April, the price was $1,849 ….” Id.

61 See id.; see also Elisabeth Rosenthal, Officials Question the Rising Costs of Generic Drugs, N.Y. Times (Oct. 7, 2014),

62 Drug Amendments of 1962, Pub. L. No. 87-781, 76 Stat. 780 (codified as amended in various sections of 21 U.S.C.).

63 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985, 67,986 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601).

64 Id. (citing 21 C.F.R. § 201.66 (2014)).

65 See id.

66 See id.

67 See id. (citing 21 C.F.R. §§ 314.80(b), 314.98(a), 600.80(b)).

68 Id. According to FDA, “[a]pplication holders must promptly review all adverse drug experience information obtained or otherwise received by the applicant from any source, foreign or domestic, including information derived from commercial marketing experience, postmarketing clinical investigations, postmarketing epidemiological/surveillance studies, reports in the scientific literature, and unpublished scientific papers, and comply with applicable reporting and recordkeeping requirements” in 21 C.F.R. §§ 314.80(b), 314.98(a), and 600.80(b). Id.

69 Id. at 67,986-87; see also 21 C.F.R. §§ 314.70, 314.97, 601.12.

70 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. at 67,987.

71 See 21 C.F.R. §§ 314.70(c)(6)(iii), 601.12(f)(2).

72 Id. § 314.70(c)(6)(iii); see also id. § 601.12(f)(2).

73 See id. § 201.57(c).

74 Id. § 201.57(c)(6)(i).

75 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. at 67,987 (noting that FDA also “has the authority to bring an enforcement action if the added information makes the labeling false or misleading.” Further, “if the newly acquired information changes the benefit/risk balance for the drug, such that the product no longer meets FDA's standard for approval, then FDA will take appropriate action.”).

76 An ANDA holder may submit a CBE-0 supplement “only to update its product labeling to conform with approved labeling for the RLD or to respond to” a specific request for a change from FDA. Id. at 67,988.

77 21 U.S.C. § 355(j)(2)(A)(v) (2012).

78 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. at 67,988.

79 Id.

80 Wyeth v. Levine, 555 U.S. 555 (2009).

81 PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011).

82 Mut. Pharm. Co. v. Bartlett, 133 S. Ct. 2466 (2013).

83 This Note uses both “inequality” and “horizontal inequity” to refer to a situation in which the law treats similarly situated individuals differently. Horizontal inequities exist throughout federal law, often because of express congressional intent. For example, language in the Employee Retirement Income Security Act of 1974 (ERISA) expressly preempts state laws that “relate to any employee benefit plan.” 29 U.S.C. § 1144(a) (2012). As a result, beneficiaries of ERISA-governed welfare plans may not bring certain state law tort claims, while beneficiaries of other plans (e.g., plans stemming from government employment) are free to file suit. Here, however, the main conclusion is that, absent express intent, such an inequity is inappropriate for prescription drug consumers.

84 See Wyeth, 555 U.S. at 559.

85 See id.

86 See id.

87 Id.

88 Phenergan entered Levine's artery “either because the needle penetrated an artery directly or because the drug escaped from the vein into surrounding tissue (a phenomenon called ‘perivascular extravastion’) where it came in contact with arterial blood.” Id.

89 See id.

90 Id.

91 Id. at 560.

92 See id. at 560-61.

93 See id. at 568-69.

94 Id. at 573. The Court also held that Levine's common law claims did not frustrate the purposes behind the FDCA, even despite an FDA statement to the contrary. Id. at 581.

95 PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2593 (2011). Metoclopromide is a common treatment for “digestive tract problems such as diabetic gastroparesis and gastroesophegal reflux disorder.” Id. at 2572. Tardive dyskinesia is a severe neurological disorder. Id.

96 See id. at 2573. Ample data suggested a causal connection between long-term metoclopramide use and tardive dyskinesia. See id. at 2572. While metoclopramide labels had been “strengthened and clarified several times” to communicate this risk, Mensing and Dehamy contended that “despite mounting evidence that long term metoclopramide use carries a risk of tardive dyskinesia far greater than that indicated on the label, none of the Manufacturers had changed their labels to adequately warn of that danger.” Id. at 2573 (internal quotation marks omitted).

97 See id.

98 See id.

99 See id.

100 See id. at 2575.

101 Id. at 2575-76. (“If the Manufacturers had independently changed their labels to satisfy their state-law duty, they would have violated federal law …. [S]tate law imposed on the Manufacturers a duty to attach a safer label to their generic metoclopramide. Federal law, however, demanded that generic drug labels be the same at all times as the corresponding brand-name drug labels…. The federal duty to ask the FDA for help in strengthening the corresponding brand-name label, assuming such a duty exists, does not change this analysis. Although requesting FDA assistance would have satisfied the Manufacturers' federal duty, it would not have satisfied their state tort-law duty to provide adequate labeling. State law demanded a safer label; it did not instruct the Manufacturers to communicate with the FDA about the possibility of a safer label. Indeed, Mensing and Demahy deny that their state tort claims are based on the Manufacturers' alleged failure to ask the FDA for assistance in changing the labels.”).

102 Id. at 2581.

103 Id. at 2593 (Sotomayor, J., dissenting). In other words, after PLIVA, “a drug consumer's right to compensation for inadequate warnings … turns on the happenstance of whether her pharmacist filled her prescription with a brand-name drug or a generic.” Id. at 2592.

104 See id. at 2584. In addition to statistics cited above regarding market share, Justice Sotomayor noted that, “[r]eflecting the success of their products, many generic manufacturers, including the Manufacturers and their amici, are huge, multinational companies. In total, generic drug manufacturers sold an estimated $66 billion of drugs in this country in 2009.” Id.

105 See infra Part III.A.

106 PLIVA, 131 S. Ct. at 2592 (Sotomayor, J., dissenting).

107 Mut. Pharm. Co. v. Bartlett, 133 S. Ct. 2466 (2013).

108 Id. at 2472. (“The results [of Bartlett's toxic epidermal necrolysis] were horrific. Sixty to sixty-five percent of the surface of [her] body deteriorated, was burned off, or turned into an open wound. She spent months in a medically induced coma, underwent 12 eye surgeries, and was tube-fed for a year. She is now severely disfigured, has a number of physical disabilities, and is nearly blind.”).

109 Id. (internal quotation marks and citations omitted).

110 Id. at 2470.

111 See id.

112 Id.

113 Id.

114 Id. at 2484 (Sotomayor, J., dissenting) (citing Wyeth v. Levine, 555 U.S. 555, 578 (2009)). For more detail about that role, see infra Part III.A.

115 Teva Pharm. USA, Inc. v. Superior Court of Orange Cnty., 217 Cal. App. 4th 96 (2013).

116 Id. at 101.

117 Id. at 106.

118 Id. at 102. Pikerie also claimed that Teva failed to communicate safety risks to health care professionals via “Dear Doctor” letters. The Court of Appeal applied the same preemption logic to this claim. For the discussion and more details, see id. at 112-15.

119 Id. at 105.

120 Id. at 107.

121 Id. at 108.

122 In order to review the many comments it has received, FDA has delayed finalizing the rule until Fall 2015. See Silverman, supra note 17.

123 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985, 67,985 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601).

124 Id.

125 See id.

126 Id.

127 Id. at 67,986.

128 See generally id.

129 See id. at 67,988.

130 Id.

131 See id. at 67,989; see also infra Part IV.C.

132 See id. at 67,988-89.

133 Id. at 67,989.

134 See, e.g., Bonnie Bertram, Storm Still Brews over Scalding Coffee, N.Y. Times (Oct. 25, 2013), (recounting public perception of the famous “hot coffee” case, Liebeck v. McDonalds).

135 See, e.g., Werber, Stephen J., The Constitutional Dimension of a National Products Liability Statute of Repose, 40 Vill. L. Rev. 985, 989-1006 (1995)Google Scholar (summarizing state and federal attempts to implement statutes of repose, and the relevant judicial treatment of those statutes). For a discussion of repose issues as they relate to the policy debate on generic drug labeling, see infra Part III.B.

136 See, e.g., Mitchell Polinsky, A. & Shavell, Steven, The Uneasy Case for Product Liability, 123 Harv. L. Rev. 1437, 1440-41 (2010)Google Scholar (concluding, for instance, that regulatory efforts are often more effective than the products liability system).

137 See, e.g., Goldberg, John C.P. & Zipursky, Benjamin C., The Easy Case for Products Liability Law: A Response to Professors Polinsky and Shavell, 123 Harv. L. Rev. 1919, 1948 (2010)Google Scholar (concluding that the products liability system “holds manufacturers accountable to persons victimized by their wrongful conduct. It empowers certain injury victims to invoke the law and the apparatus of government to vindicate important interests of theirs. It instantiates notions of equality before the law and articulates and reinforces norms of responsibility. And in doing all these things, it contributes in direct and indirect ways to deterrence and provides welfare-enhancing compensation.”).

138 Hylton, Keith N., The Law and Economics of Products Liability, 88 Notre Dame L. Rev. 2457, 2458 (2013)Google Scholar.

139 See id.

140 Id.

141 Id.

142 Letter from Sally Howard, Deputy Comm'r, Policy, Planning, & Legislation, FDA, to Joseph Pitts, House of Representatives, Re: Proposed Rule for Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products 9 (Feb. 26, 2014), available at

143 PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2592-93 (2011) (Sotomayor, J., dissenting) (emphasis added) (internal citations omitted).

144 See Hylton, supra note 138, at 2470 (citing M. Madden, Stuart, The Duty to Warn in Products Liability: Contours and Criticism, 89 W. Va. L. Rev. 221, 223 (1986)Google Scholar (“Special doctrines have developed in the products liability setting, such as the presumption that the consumer will heed the warning if it is given. These special doctrines reflect efforts by courts to design rules that facilitate the provision of information to courts rather than radical departures from basic negligence law.” (internal citations omitted))).

145 Mut. Pharm. Co. v. Bartlett, 133 S. Ct. 2466, 2485 (2013) (Sotomayor, J., dissenting) (emphasis added) (quoting Sprietsma v. Mercury Marine, 537 U.S. 51, 64 (2002)).

146 Id.

147 Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985, 67,986 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601).

148 Wyeth v. Levine, 555 U.S. 555, 565 n.3 (2009) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)).

149 Id. at 573.

150 See Werber, supra note 135, at 989.

151 See id.

152 See id.

153 Wilson v. Iseminger, 185 U.S. 55, 62 (1902).

154 Werber, supra note 135, at 992-1000.

155 Id. at 990-91 (emphasis added).

156 Raymond v. Eli Lilly & Co., 371 A.2d 170 (N.H. 1977).

157 Id. at 171. Plaintiff's husband also sued the defendant for consequential damages resulting from his wife's blindness. Id.

158 Id. at 172.

159 Id.

160 Id. at 171-72 (quoting Shillady v. Elliot Cmty. Hosp., 320 A.2d 637, 639 (N.H. 1974) (internal quotations omitted)).

161 Id. at 173.

162 See id. The court also cited cases in which other state courts have applied its preferred formulation of the discovery rule in similar circumstances. See, e.g., id. at 174 (citing Breaux v. Aetna Casualty & Surety Co., 272 F. Supp. 668 (E.D. La. 1967) (holding that in a products liability suit against a drug manufacturer for failure to warn, the filing period under a Louisiana statute of limitations did not begin to run until the plaintiff knew or reasonably should have known of the causal connection between his deafness and the defendant's drug Kantrex)).

163 Id. at 176.

164 Id. Specifically, the court discussed the potential for prejudice due to “lost or inaccurate evidence due to the passage of time.” Other reasons that prejudice is unlikely include the documentary nature of evidence and the improvement in scientific information over time. Id.

165 Id. at 177.

166 Opponents argue that granting generic manufacturers the authority to change their labels unilaterally would result in different labels for the same products and thus would cause confusion among physicians, medical professionals and patients. GPhA asserts that for this reason, the FDA's proposed rule “will not enhance safety.” In particular, GPhA claims that the proposed rule creates confusion costs by “jettison[ing] the fundamental requirement of ‘sameness.’” Generic Pharm. Ass'n, supra note 43, at 10. Racial minority groups, including the National Association for the Advancement of Colored People and the National Hispanic Medical Association, as well as the National Medical Association share GPhA's worry. The groups express concern, specifically, that the proposed rule would introduce confusion into medical decision-making in vulnerable populations. See Michael Johnsen, Minority Groups Raise Concerns Around FDA's Proposed Rule on Generic Labeling, Drug Store News (Oct. 14, 2014),

167 See 21 C.F.R. §§ 314.80(b), 314.98(a), 600.80(b) (2014). Post-marketing monitoring does not result in many labeling changes. According to Public Citizen, “[i]t's not like there are hundreds of changes made each year. We shouldn't expect labeling updates coming every day. There are 182 safety-related changes per year made by branded companies, 48% of which have a generic equivalent on the market. And 420 drugs are sold only in generic form because the brand-name product is no longer sold. But branded companies won't pay as much attention when they're no longer selling product and smaller [generic] companies are not going to be selling 100 different drugs.” Ed Silverman, FDA Rule Change on Generic Labeling is Needed: Zieve Explains, Wall St. J. Pharmalot (Dec. 12, 2014, 12:59 PM),

168 See Generic Pharm. Ass'n, supra note 43, at 10.

169 Id. (citing Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, 78 Fed. Reg. 67,985, 67,991 (proposed Nov. 13, 2013) (to be codified at 21 C.F.R. pts. 314, 601)).

170 See Silverman, supra note 168 (“To have a situation where the FDA is the only one with authority to update labeling is a bad thing for public health. There are thousands of drugs on the market and the FDA can't take primary responsibility for the labeling of every one.”).

171 See Raymond v. Eli Lilly Co., 371 A.2d 170, 176 (N.H. 1977).

172 Silverman, supra note 168.

173 The extent of drug price increases generated by the proposed rule depends on the extent of failure-to-warn liability—including the number of claims, the average cost of litigation, the percentage of successful claims (settlement or judgment), and average payout. Liability insurance premiums also depend on these values, and in turn affect any price increase. The exact magnitude of these links is not determinative though, because they are elements of traditional products liability.

174 See Alex Brill, Matrix Global Advisors, FDA's Proposed Generic Drug Labeling Rule: An Economic Assessment 10 (2014).

175 Id. at 6.

176 See id.

177 See id.

178 FDA, Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products: Preliminary Regulatory Impact Analysis 19 (2013), available at

179 See generally Generic Pharm. Ass'n, supra note 43.

180 See, e.g., Alex Brill, supra note 174, at 4 (“[U]ncertainty is itself a burden, and the FDA's inability to quantify certain consequences arising from the Proposed Rule should be considered a cost to stakeholders.”).

181 See supra Part III.A. Drug manufacturers' arguments that turn on harm to profits are not persuasive. “The argument should not primarily be about profits of generic drug companies when the FDA is trying to promulgate a rule to improve safety of products we all take. It's an incredibly profitable industry, because we need drugs. But this is a health and safety matter. For most generic drugs out there, it's a big company selling those products and there really can't be a legitimate concern about their ability to take responsibility.” Silverman, supra note 167.

182 See supra Part III.A. This issue is complicated further by the drug approval process and nature of generic competition as the “same” as brand-name drugs. In the market for automobiles, there may be an available alternative design that poses fewer risks and has the same utility. But in the generic drug market, a medication's chemical composition is largely fixed. Labeling, therefore, is more important to patient safety in the pharmaceutical market than in the markets for many less regulated products.