Manhattan Institute's Report on FDA and Preemption Is Worth a Read
Yesterday I attended a program where two Manhattan Institute scholars presented the findings from their report: IN THE WAKE OF WYETH V. LEVINE: Making the Case for FDA Preemption and Administrative Compensation. The report was written by James R. Copeland, Director of the MI's Center for Policy Research, and Paul Howard, Director of the MI's Center for Medical Progress. The report is the first in a series of reports that will be issued by the MI's "Project FDA," a committee of physician-scientists, economists, medical ethicists, and policy experts working to show how 21st Century technologies can better inform FDA regulations and accelerate the drug development and drug approval processes, while still maintaining drug safety. The report was touted as a timely response to Wyeth v. Levine and the current congressional proposals to undo Riegel and remove preemption from medical devices.
The report provides good background on the history of FDA regulation, and how the FDA is better equipped than the tort system to balance the risks and utilities of new drugs. It also provides a useful description of Wyeth v. Levine and makes the normative case for preemption, looking at examples of how the tort system has led to the unavailability of drugs that have actual benefits.
The report goes on to recommend that in exchange for broad field preemption of state law claims for FDA-approved medicines and devices, there should be an "administrative review process that more quickly, fairly, and cheaply provides redress to injured consumers" (Report at 11), modeled on the federal Vaccine Injury Compensation Program.
But here's the catch: no one in Congress would ever vote for Copeland and Howard's compensation program, because unlike the vaccine program, their program would not compensate for all injuries caused by a drug. Rather, it would compensate for all injuries caused by a drug that were not warned about on the FDA-approved label. Put differently, Diana Levine would not receive compensation under their plan, because the risk of gangrene resulting from IV push was warned about in six places on the product label.
Don't get me wrong: I personally do not believe Diana Levine was entitled to compensation from a drug company where her medical professionals committed malpractice resulting in a well-known and well-warned-about side effect. And I could get behind an administrative compensation system that did not overcompensate claimants by paying them for foreseeable risks that were already known and should have been evaluated by their physicians. But the idea that in the current political environment key lawmakers would even consider such a proposal seems farfetched to me.
Copeland and Howard theorize that by limiting compensation to unanticipated adverse events, drug companies would have incentives to disclose adverse events quickly and include them in warning labels. They also explained why their proposal differed from the vaccine program, which compensates for any injury caused by a vaccine:
Attributing adverse events to drugs, however, poses unique challenges. Since vaccines are given primarily to healthy individuals, it is usually possible to link a severe side effect to an administered vaccine and not an underlying health condition. Drugs, particularly those used to control chronic illnesses such as diabetes and heart disease, by contrast, are taken by individuals whose health is already substantially compromised, making it more difficult to say definitively that the root cause of an adverse event was drug treatment. Thus, policymakers would have to consider carefully the classes of individuals and injuries to be covered under any compensation program. If they did not, the program would overcompensate some individuals, and thus discourage pharmaceutical companies from developing treatments for certain diseases.
Report at 13.
Copeland and Howard would fund their program with a tax on drugs and devices based, at least initially, on market share, but later perhaps on the size of payouts to the users of the respective products. They also advocate a rigorous post-market review process that would be conducted by FDA personnel separate from those who were responsible for the original drug approval and labeling. They also would leave claimants with state law tort causes of action against their health care providers.
Philip Howard of Covington & Burling and John O'Quinn of Kirkland & Ellis each responded to the report. They reiterated their agreement with the presenters that Levine was wrongly decided on its facts, and that state tort law is simply not equipped to handle the risk-benefit balancing that goes into bringing medical products to market.
O'Quinn noted his belief that Copeland and Howard's program could not be adopted in the current political climate. He also wondered whether engaging in the sort of claim-splitting that precluded state law tort claims against the drug company, but allowed them against the medical providers might create undue pressure to sue the medical providers in most instances.
Ultimately, O'Quinn concluded that Copeland and Howard's proposal was one that should lead to a broader discussion of other potential compensation systems, such as a true no-fault system (although that would be extraordinarily expensive), or even a system in which failure-to-warn claims are not preempted, but merely channeled into a federal system for review by expert tribunals.
Copeland and Howard's report is a good resource for lawyers interested in FDA preemption issues. It will be interesting to see in the months to come whether it can spark renewed Congressional interest in preemption in exchange for a simplified system to compensate claimants.
