COMMENTARY

REGULATORY | October 31, 2008

Preempting Innovation

The American healthcare system is undermined, underserved, and undervalued when labeling is written more for corporate liability protection than as a valuable tool for healthcare providers.

PETER J. PITTS

“This is nothing less than a grave menace to the public health.”
The U.S. Food and Drug Administration has the authority, the ability, the means, the mission, and the mandate to manage the healthcare risks and benefits inherent in the products they regulate on behalf of the American public. That’s why opponents of preemption of state liability lawsuits are running scared. 
 
Their latest attempt to muddy the waters of FDA labeling authority comes in the form of a leak of internal agency documents. Staff of Rep. Henry Waxman, D-California, claim that internal FDA documents show that career officials oppose agency regulations that weaken consumers' ability to sue drugmakers.
 
"Much of the argument for why we are proposing to invoke preemption seems to be based on a false assumption that the FDA approved labeling is fully accurate and up-to-date in a real time basis," the report quoted Dr. John Jenkins, who oversees FDA's new drug reviews, as saying. "We know that such an assumption is false."
 
Nobody ever claimed that any FDA label is fully accurate. Such an assumption is indeed false, but nobody has ever said otherwise. What supporters of preemption do say is that the FDA carefully considers the scientific evidence relating to any proposed warning, as well as the public health consequences of including or omitting particular language from drug labeling or advertising. Those who support preemption believe that a drug’s FDA mandated label deserves deference from courts and juries applying state tort law.
 
Jenkins is right, but that doesn’t make preemption wrong.
 
Jane Axelrad, an associate director for policy at the agency, provided a second “smoking gun” statement. She wrote, "We rarely find ourselves in situations where sponsors want to disclose more risk information than we think is necessary," she said. "To the contrary, we usually find ourselves dealing with situations where sponsors want to minimize the risk information."
 
Axelrad is right too. But that doesn’t change the argument for preemption. Of course drug companies would prefer to minimize risk information – and they make their arguments based on sound science. Sometimes the FDA agrees, other times they do not.
 
The “leaked” documents being aggressively peddled to the media do not change the sound legal and public health argument for preemption a whit. What it does show is that there is a robust and collegial debate within the agency on this matter. Taking these conversations out of context, as is now being done by members of Waxman’s staff, just shows how desperate they are – and how weak their arguments are.

America deserves access to high quality healthcare without avoidable medical errors and complications. This achievable goal begins with harnessing and using the power of information. And that begins with clear, accurate, and usable labeling.
 
The American healthcare system is undermined, underserved, and undervalued when labeling is written more for corporate liability protection than as a valuable tool for healthcare providers. Today, labeling includes excessive risk information and exaggerated warnings. And this has set into motion a dangerous dynamic – labeling that does not accurately communicate to either the healthcare professional or the patient the conditions in which any given product can be used safely and effectively. This is nothing less than a grave menace to the public health. 
 
America is suffering from a legal system that is dangerous to its health. Why has this happened? There is, unfortunately, a simple answer – fear of liability. Manufacturers have significant monetary incentives to add dense and confusing “legalese” because, under current law in most states, they can be found liable for failing to provide “adequate” warnings about therapeutic products. Money, not medicine, is driving this dangerous practice. When it comes to labeling written for lawyers rather than doctors and an out of control liability system, more is less.
 
The public’s access to timely, innovative, and affordable healthcare is severely impaired when manufacturers respond to liability costs by withdrawing beneficial products from the marketplace. The signal example of this is BENDECTIN (pyroxidine HCl/doxylamine succinate), a drug approved by FDA in 1956 to prevent nausea during pregnancy. Although FDA and the scientific community have determined that the drug did not cause birth defects, isolated statements to the contrary in the scientific literature beginning in 1969 prompted a flood of lawsuits. By 1983, the costs of these suits were so great that the manufacturer withdrew the product from the market. FDA is particularly concerned about the potential for product liability considerations to create shortages, particularly of vaccines and other therapeutic products useful in treating conditions caused by agents of terrorism.   More liability results in less availability. 
 
Healthcare innovation is thwarted when manufacturers choose to devote their finite research and development resources to creating products they believe will not be associated with uncertain and potentially high stakes liability costs. Today, developers of new medical products increasingly need to set aside billions of dollars, or redirect their research activities from potentially valuable directions, in anticipation of the potentially unlimited risk of mass tort lawsuits. The growing practice of pulling together mass lawsuits based on the FDA’s actions is altering the development of medical products in ways that reduce the quality of healthcare. Liability risk is inversely related to levels of research and development activity.   "The interpretation of this pattern is that risks create incentives for safety at low-risk levels but lead to stagnation of the innovation process beyond some threshold," wrote economists Michael J. Moore & W. Kip Viscusi.The lack of innovation in the areas of vaccines, contraceptive products, and orphan drugs, extensively documented by the federal government and others, only begins to illustrate the point that more liability results in less innovation.

Higher healthcare costs inevitably occur when manufacturers adjust to the out of control tort environment by pricing certain products they perceive as presenting particular liability concerns at a significant premium over others. Higher prices create pressures to reduce the use of approved products, contrary to FDA's objective of rational prescribing. More than ever before, rising costs threaten to price the benefits of modern technology out of the range of many of the patients who most need it. And these cost pressures are going to increase as our population continues to age and more treatment options become available. According to many experts, the differential cost of healthcare between the United States and Canada can be explained by product liability considerations. Higher prices create pressures to reduce the use of valuable, safe, and effective healthcare options. More cost results in less effective healthcare.
 
When the tort system threatened the development of lifesaving medical products in the past, we found creative solutions. Consider the disaster that faced childhood vaccines in the mid 1980s. Under the weight of litigation, prices for vaccines increased 10-fold, and the number of manufacturers dropped from about 20 to only 4 – and only 2 in the US. So Congress took most child vaccine litigation out of the tort system and created the well-respected Vaccine Compensation Fund. Today, it’s widely understood that vaccines are safer than ever not despite these fundamental litigation reforms – but because of them.
 
When public health is put before private gain, tort law and the lawyers who practice it play very important role in protecting and enhancing America’s health. Tort law, appropriately applied, helps patients get redress for truly negligent care. When product manufacturers provide fraudulent information to FDA, or deliberately withhold information about safety problems associated with their products, they should be held accountable. The dedicated members of our legal profession have always provided, and continue to provide, vital protection against those who would prey on consumers or intentionally try to pass off harmful products. The threat of litigation can be an important disincentive to many predatory behaviors.  
 
The problem is that the current liability system doesn’t reward lawyers who focus on these real public health concerns. Instead, the most experienced and well-financed law firms know that the biggest payouts regularly go to those who take advantage of the FDA’s best efforts to promote the safe and effective use of medications. More and more often, these “mass tort” firms specialize in taking a new product warning label or withdrawal decision by the FDA, and view it as a signal to go forward with all guns blazing. Their bullets, unfortunately but not unpredictably, hit multiple innocent targets and result in a wounded American healthcare system. 
 
One woman, speaking to a reporter for the Jackson Clarion-Ledger, summed it up this way: When she read that the drug Propulsid might cause harm, she stopped taking it and signed up for a lawsuit. “Actually, I didn't get hurt by Propulsid,” she told the newspaper. But because she had taken the drug, she said she thought she could join a class-action lawsuit “and I might get a couple of thousand dollars.” Less fairness results in more damages.
 
Labeling can and must be a valuable tool for improving and protecting America’s health. That’s the law. The FDA is concerned that current labeling practices are in direct counterpoint to the principle objective of current regulations, to facilitate a doctor’s ability to “rationally prescribe” any medical product approved by the FDA. Rational prescribing occurs when a healthcare professional orders an approved prescription drug or biological product in circumstances where the risk/benefit profile of the product is optimal. The FDA’s most potent weapon in the battle for accurate, timely, “rational,” prescribing is clear, approved labeling.
 
The FDA’s legal and legislative authority over labeling for prescription drugs and biological products is plenary. The Federal Food, Drug, and Cosmetic Act establishes mandatory and prohibited labeling content and manufacturers have no choice but to comply with these requirements. Less obvious, but equally important, is the principle that the Act also constitutes a “ceiling.” In other words, a manufacturer cannot add risk information to labeling unless the FDA has specifically granted its permission.
 
The act clearly gives the FDA the authority to decide whether or not a product, when used properly, is safe, effective, and properly labeled. A product, used as described in FDA-approved labeling, should be considered safe and effective throughout the United States. Preemption is a well-recognized doctrine of constitutional law derived from the supremacy clause and analyzed by the Supreme Court in several cases. Federal law preempts state law here because FDA intends for federal regulation to be exclusive and preemption does not exceed statutory or constitutional limitations.
 
Peter J. Pitts is President of the Center for Medicine in the Public Interest and a former FDA Associate Commissioner.