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September 12, 2007
My name is Collyn Ann Peddie and I am a foot-soldier in the on-going battle over the federal preemption of state pharmaceutical claims. I want to thank Chairman Leahy, Ranking Member Specter and the members of the Committee for the opportunity to speak on this matter.
For most of my career, I have represented corporate defendants, including many Fortune 500 companies and large pharmaceutical companies. In recent years, I have tried a number of lawsuits for pharmaceutical companies and have personally advised senior executives at Pfizer concerning federal preemption issues and strategy involving the diabetes drug Rezulin.
For the last two years, I have practiced trial and appellate law with the firm of Williams Kherkher Hart Boundas, L.L.P. in Houston, Texas, where I currently take the leading role in several key appeals in Texas and Pennsylvania state and federal courts involving federal preemption of prescription drug or vaccine claims. For some time, I have regularly consulted with other counsels around the nation on preemption issues.
In short, I have been on the front lines virtually every day for the last 5 years dealing first-hand with federal preemption of state pharmaceutical claims and the impact of these decisions on the lives of injured Americans.
Breaking sharply with express Congressional dictates2 and a century-long policy of claiming no preemption of state-law failure to warn claims,3 the FDA has, in the last few years, aggressively asserted the doctrine of implied preemption of state pharmaceutical claims in a series of amicus briefs filed in private lawsuits. This power grab culminated in the FDA including a Preamble to its 2006 drug labeling regulations, in which it announced its position that state failure to warn claims - based upon the failure to include in proposed warnings information that the FDA considered and rejected - are preempted.4 In 2007, in another amicus brief, the FDA retreated somewhat from the position it took in its Preamble and it now asserts a very strict form of direct conflict preemption.5
Since 2006, a few courts have ignored express Congressional directives and federal law, some relying on the FDA amicus briefs and the Preamble to the 2006 drug labeling regulation instead, to expand the application of the preemption doctrine. Thus, in Colacicco v. Apotex, et al., 432 F. Supp. 2d 514 (E.D. Pa. 2006), Judge Michael Baylson solicited an FDA amicus brief himself, held that it and the FDA's prior amicus briefs' and Preamble's statements on preemption were entitled to Chevron6 or conclusive deference, that the federal courts were powerless to reject them, and, on that basis, dismissed the plaintiffs' failure to warn claims. The number of these cases are approaching a critical mass, and soon it will be difficult, if not impossible, to undo the damage done without significant Congressional intervention.
Ruby Ledbetter's7 case is a good example. At the time she began taking Vioxx, Ruby was a 62-year old Texas grandmother who actively gardened, rode horses, cleaned their stalls as well as her own house, and walked up to a mile three times a week. As the result of taking Vioxx for a year and a half, however, she suffered a severe heart attack that has left her unable to live her previously-active life. She sued Merck, Vioxx's manufacturer, for failure to warn her of its potential cardiovascular effects.
A few months before her scheduled trial date, a Texas trial judge dismissed her failure to warn claim as impliedly preempted. Under a recent Texas law, there is a statutory presumption of no liability for a drug manufacturer if its drug was FDA-approved. There is, however, a statutory exception to that law that would have permitted Ruby to show that Merck had withheld or misrepresented to the FDA material information during the Vioxx approval process. Under those circumstances, Texas law would not have permitted Merck to avail itself of the statutory presumption based upon FDA approval as a defense in her case.
In holding her failure to warn claim impliedly preempted, Judge Wilson conceded that Ms. Ledbetter had made the requisite statutory showing that Merck withheld important information from the FDA. Nevertheless, he dismissed her failure to warn claim because he found that her ability even to make that threshold evidentiary showing was impliedly preempted by the Food Drug and Cosmetic Act under the Supreme Court's decision in Buckman because such a showing was somehow analogous to a preempted affirmative claim of fraud on the FDA and attempt to enforce privately violations of FDA regulations.8 He refused, however, to declare the whole statute, including its rebuttable presumption in favor of drug manufacturers, preempted and return it to the Texas Legislature for reconsideration and amendment, but instead claimed that the exception was not wholly preempted. He opined that the statutory exception could be satisfied by proof that FDA itself had found, under the provisions of the Texas Act, that it had been defrauded during the approval process. This is the same conclusion reached by a Sixth Circuit Court of Appeals panel in interpreting a somewhat similar Michigan statute to find its exception preempted.
When, in a motion for new trial, Judge Wilson was informed that there were no possible circumstances under which the FDA would ever make the requisite findings and, therefore, that no Texas plaintiff would ever be able to file a failure to warn claim under the exception expressly created by the Texas Legislature, he admitted that he would have to declare the entire statute preempted and return it to the Texas Legislature and that, under his interpretation, he was immunizing corporations who lied to the FDA to gain drug approval. Nevertheless, he failed to rule on that motion and let stand his original decision rather than take down the whole statute. As part of multi-district proceedings, his decision potentially affects thousands of Texas Vioxx and pharmaceutical plaintiffs and would bar their claims outright.
Under the guise of furthering perceived Congressional intent then, a Texas judge has immunized from suit in Texas even drug manufacturers who lied to the FDA to gain drug approval and expanded the implied preemption doctrine far beyond even what the FDA claims for itself. In the process, he has potentially locked the courthouse door to thousands of plaintiffs injured by prescription drugs. Is that really what Congress intended?
In Pennsylvania, Hannah Bruesewitz suffered a similar fate. Her personal injury claims have now been dismissed as preempted under the Vaccine Act. While a normal toddler, Hannah Bruesewitz was injected with DPT vaccine. Within 2 hours, she was in convulsions. She is 15 today and has suffered from seizures ever since. Even though she has a normal life expectancy, Hannah's life will never be normal. She will require hundreds of thousands of dollars in medical care for the rest of her life. Before she ever received the vaccine, the VAERS reporting system, created by Congress, had uncovered 2 child deaths and 66 serious injuries associated with the same vaccine lot administered to Hannah; however, no one told Hannah's parents or her doctor about these serious problems with the vaccine.
As required by federal statute, Hannah's parents filed claims seeking compensation for her injuries in the National Vaccine Injury Compensation Program. Because of budget cuts reclassifying her injury, she received no compensation at all through that program. As the result, her parents availed themselves of their express right under the Vaccine Act to sue in state court for her injuries.
Ignoring express Congressional language in the Vaccine Act which preserved suits based on drug side effects that are "avoidable," Judge Baylson, the judge in Colacicco, held that Congress intended to preempt all design defect claims, even those, like Hannah's, that involve vaccines for which there were suitable alternatives, including potentially substituting another lot of the same vaccine. Worse, a second Pennsylvania federal judge, relying in part on the FDA Preamble, would have impliedly preempted Hannah's failure to warn claims too, despite Congress' express reservation of such claims and express preemption of any state law that would stand in their way. In fact, when Judge Baylson specifically solicited an FDA amicus brief to give the FDA an opportunity to state its position on preemption in cases filed after participation in the National Vaccine Program, the FDA stated that it essentially had no dog in the fight at that point.
In short, even though Congress specifically preserved an injured but dissatisfied plaintiff's right to bring state tort claims after exhausting his or her administrative remedies under the Vaccine Act and expressly preempted state laws that would infringe upon that right, two federal court judges have decided that what Congress really meant to do was to limit such plaintiff's remedies, if any, to those afforded under the National Vaccine Program.
These examples reveal an emerging pattern of judicial and executive legislating, and nullification of federal and state laws permitting tort claims against pharmaceutical companies. The FDA and some activist courts are increasingly ignoring Congressional intent and casting aside bedrock legal and constitutional principles that once lent predictability and stability to the law in this area. In Texas and Pennsylvania, this has meant that, while courts have retained the statutory benefits for drug companies, they have removed important checks on those benefits, leaving many injured citizens with no remedy.
The absence of state tort claims also places enormous burdens on the FDA to ensure drug safety, burdens it is increasingly ill-equipped or unwilling to bear. Where private claims are preempted, the FDA becomes the only game in town. According to a recent report to the House Committee on Government Reform,9 however, FDA enforcement actions have declined dramatically in the last 7 years, coincidentally, the period during which the FDA has most vigorously asserted the preemption doctrine. The number of warning letters issued by the FDA for violations of federal requirements, the true measure of enforcement activity, has fallen by over 50%, from 1,154 in 2000 to 535 in 2005, a 15-year low. Id. Internal FDA documents also show at least 138 cases in which FDA field inspectors found violations of FDA safety requirements but the FDA failed to take any enforcement action against the pharmaceutical manufacturer. Id.
In addition, longer term studies indicate that the FDA's response to continual budget cuts and increasing burdens has been to shift from monitoring and pre-approval investigation, actions which are resource-intensive, to product recalls, which are less expensive and time-consuming but make the public unwitting participants in a massive, uncontrolled clinical trial.10 This means that more people will be hurt by prescription drugs in the future. Unfortunately, there is no federal scheme for compensating victims of most prescription drugs.11 Thus, continued preemption holdings by the courts will mean that many victims will simply go uncompensated or the costs of their care will be shifted to American taxpayers through Medicaid or Medicare.
Congress and the courts have traditionally recognized that private tort claims play an important role in ensuring that drugs are safe and that drug companies continue to improve their products. As one federal judge explained: "Rather than working at odds with each other, federal regulations and state common law acting in concert can improve vaccine safety of existing vaccines and spur the development of better safer products."12 The critical role private lawsuits play will be lost if such claims continue to be held preempted.
The recent Prescription Drug User Fee Act [PDUFA] is a good example of how Congress can begin to make its intent clear. The House version of the bill includes language seeking to ensure that the Act does not attempt to "occupy the field of drug labeling," thereby giving pharmaceutical companies additional means to argue preemption of state claims. In addition, during debate on the Senate bill, Senator Kennedy, a chief sponsor and floor manager, stated: We do not intend to alter existing State law duties imposed on the holder of an approved drug application to obtain and disclose information regarding drug safety hazards either before or after the drug receives FDA approval or labeling. Nor are we expressing a belief that the regulatory scheme embodied in the bill is comprehensive enough to preempt the field or every aspect of State law. FDA's approved label has always been understood to be the minimum requirement necessary for approval. In providing the FDA with new tools and enhanced authority to determine drug safety, we do not intend to convert this minimum requirement into a maximum. . . Nor are the bill's requirements that holders disclose certain safety information to the Government intended to substitute for the disclosure requirements that may be required under State law. 153 CONG. REC. S5759 (daily ed., May 9, 2007) (statement of Sen. Kennedy). The language in the House bill enhances the ability of practitioners to fight improper assertions of preemption and arms them with the tools they need to succeed in reversing such holdings.
2. Increase Congressional oversight of the FDA and other safety agencies, in particular, in their assertion of the preemption doctrine and enforcement activities. The United States Supreme Court may soon review cases addressing the question of whether to give agency assertions of preemption so-called Chevron or conclusive deference. This could mean that the FDA Preamble, which was issued in violation of applicable notice and comments requirements and in contravention of the FDA's own statement that its proposed rules involved no substantive changes,14 could be considered dispositive of the preemption question. It is, therefore, incumbent upon Congress, in its oversight capacity, to police such statements and assertions that state law is preempted.
3. Consider legislation limiting preemption. Congress should consider limiting the ability of the state and federal courts to find implied preemption or the executive agencies to assert it by defining and restricting the circumstances under which Congress will permit preemption to be implied.
4. Consider passage of uniform statutory interpretation rules, including those addressing preemption. By providing more guidance to the Courts and agencies in interpreting federal statutes, particularly with regard to preemption, Congress can increase the likelihood that state and federal courts will follow established principles in interpreting federal law. Texas has a code construction act as do many states. While it is obviously not always followed, it does direct the state courts in interpreting state law. Even if it is ignored as it was in Ruby Ledbetter's case, however, it provides practitioners with a basis on which to challenge a trial court's idiosyncratic and improper interpretation of a statute and acts as an important check on judges who legislate from the bench.