Volume 3, Number 7 .July 2003

When Is Compliance Necessary?

Pharmaceutical Manufacturers and Prop. 65

By Frederick]. Ufkes

T he pharmaceutical industty has been heavily regulated for many years, start-ing with the original enactment of the Food and Drug Act in 1906. Over theyears, a bewildering array of regulations has been established that affect the

sale and consumption of drugs at both the federal and state levels. While many ofthese past regulations have been subsumed into the FDA's rules and regulations,one of the most difficult and currently pressing questions a pharmaceutical manu-facturer must ask itself is whether to comply with California's Proposition 65. Themanufacturer's decision to comply may have significant adverse affects on market-ing and use of the drug; or conversely, imposition of stiff, costly penalties. This arti-cle provides a basic roadmap of the current landscape for compliance withProposition 65 in the pharmaceutical context.BACKGROUND

In 1986, California voters enacted Prop. 65, "The Safe Drinking Water and ToxicEnforcement Act." See Cal. Health and Safety Code § 25249.5 et seq. The purpose ofProp. 65 is to provide individuals in the State of California with information con-cerning exposures to chemicals that a panel of experts has determined cause can-cer, birth defects and/or reproductive harm.- Any person or company employingmore than ten individuals is subject to Prop. 65, and manufacturers and distributorsof products containing listed chemicals are required to "give a c;lear and reasonablewarning" before exposing anyone to a listed chemical,

Because Prop. 65 was passed as part of the initiative process in California, not asa result of legislative action, it has raised numerous concerns for industty. For exam-ple, there is no risk/benefit analysis allowed; if a manufacturer or distributor knowsof the presence of a chemical that is subject to the regulations, it must provide awarning. Furthermore, Prop. 65 allows for private parties or "bounty hunters" to file

: claims against supposed non-compliers, seeking penalties of up to $2500 per dayI

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Compliancecontinued from page 1

per violation, as well as the paymentof attorneys fees.

RESOONsmn.ny TO CoMPLY

Prop. 65 is applicable to pharma-ceutical manufacturers. See Cal.Health and Safety Code § 25249.6.They, likewise, are required to pro-vide a "clear and reasonable warn-ing" unless they are somehow other-wise exempted from Prop. 65. TheCalifornia Health and WelfareAgency (CHWA), the agency initiallydesignated to administer Prop. 65,adopted an implementing regulation(the Regulation) stating: "for pre-scription drugs, the labelingapproved or otherwise providedunder federal law and the pre-scriber's accepted practice of obtain-ing a patient's informed consent shallbe deemed a clear and reasonablewarning." Cal. Code Reg. tit. 22,Section 12601(b)(2.

Because there is an existing com-prehensive federal regulatoryscheme concerning warnings ondrugs promulgated by the FDA, theconflict for drug manufacturers isobvious: FDA regulations require adetailed review and approval processfor the information provided in pack-age inserts and on labeling for pre-scription drugs. The FDA regulationsrequire similar information, particu-larly relating to safety, on any adver-tising for prescription drugs. Further,once the FDA approves a label, nochanges may be made without itsprior approval. Any unapproved

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FrederickJ. Utkes is a partner at theLos Angeles Office of Kirkpatrick &Lockhart, LLP, and has regional andnational counsel experience in prod-uct liability litigation. His experienceincludes serving as trial counsel innumerous toxic tort cases represent-ing Fortune 500 companies. Ufkes lit-igates a wide range of issues affectingthe chemical and pharmaceuticalindustry, including defending claimsof violations of Proposition 65. Hewould like to thank Nicole Lee, anAssociate at Kirkpatrick & Lockhart,LLP for her assistance in the prepara-tion of this article.

JAMES M. W1100

Ptlarmoceutlcal & Modlcal Do11ce law .ullaIJ~ (1S511538-1692)

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changes to the label may render theproduct "misbranded" under federallaw and subject the manufacturer tosubstantial filles and penalties. SeeCantor v. Warner Lambert Company,99 Cal.App. 4th 780 (2002).THE OTC CoNTEXT

Prop. 65 complaints have beenfiled both by the California AttorneyGeneral's Office as well as by privateattorneys general in numerous casesinvolving over-the-counter drugs andother medical products. For example,manufacturers of dental amalgamhave fought a long, losing battle withthe State of California concerninginformation provided to dentalpatients as to the presence of mercu-ry in dental amalgam.

Recently, a private attorney generalinitiated action against a manufacturerof an OTC nicotine patch for thecessation of smoking. In Dowhalv. SmithKline Beecham ConsumerHealthcare, Cal.App.4th 8 (2002), theCourt of Appeals overturning the trialcourt's entry of summary judgment onbehalf of the defendants, determinedthat the Modernization Act of 1997had a savings clause which explicitlyprovided that Prop. 65 and federallaw were not in direct conflict. Thisdecision has recently been depub-lished, as the California SupremeCourt has granted review. Dowhalv. SmithKline Beecham ConsumerHealthcare, No. S109306, (2002 WL1486578) (October 23, 2002).

Not only is Smith Kline Beechamchallenging the Dowhal court's deci-sion, but the FDA likewise is chal-lenging it, arguing that it specificallyrejected the proposed Prop. 65 warn-ing as scientifically unreliable andone that might dissuade pregnantwomen from trying to stop smoking,a result that would not be in theinterest of good public health. TheFDA argues that it carefully considersthe warnings that it requires onproducts and, based on its expertise,has mandated the precise warninglanguage that it concludes providesall material information relatingto safety. The FDA has stressedthat strict compliance with Prop. 65may result in a narrow focus thatdisregards entirely the product's

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Compliancecontinued from page 2

satisfied by the FDA-approved label,together with the "prescriber'saccepted practice of obtaining apatient's informed consent." Thecourt did not reach the issue ofimplied or express preemption.

A very recent California trial courtdecision, however, specifically deter-mined that Prop. 65, to the extentthat it requires additional informationother than the FDA-approved labeland package insert, is pre-empted. InThe Vaccine Cases, JCCP No. 4246(Los Angeles Superior Court), plain-tiffs made claims, inter alia, for vio-lation of Prop. 65. Plaintiffs claimedthat they themselves or their childrenwere poisoned with thimerosal-con-raining vaccines, causing personalinjury and violating Prop. 65. Theyclaimed that thimerosal contains mer-cury, one of the listed chemicals onthe Governor's" List, and that there-fore there was a requirement thatusers be warned of reproductive tox-icity. However, the defendants suc-cessfully challenged the plaintiffs'claim. Sustaining a demurrer withoutleave to amend on the Prop. 65 claim(Master Complaint No.3), JudgeVictoria G. Chaney determined thatthe manufacturers of thimerosal andthimerosal-containing vaccines wereentitled to judgment in their favor onthat issue. The court determined thatRegulation 12601(b)(2) providedan absolute safe harbor for the man-ufacturers and distributors of

thimersosal-containing vaccines, andthimerosal manufacturers. Further,the court determined that any impo-sition of Prop. 65 liability in the con-text of prescription drugs would sub-stantially interfere with and impedethe FDA's responsibilities to ensurethat safe and efficacious drugs areavailable to the consuming public.Judge Chaney held that the FDArequirements govern all productinformation materials relating to pre-scription drugs, including advertis-ing, brochures and postings, whetherphysically attached to the product ornot Plaintiffs have recently filed anotice of appeal.CoNCLUSION

Clearly, Prop. 65 is a trap for theunwary. Substantial penalties andattorneys fees can be collected eitherby the state Attorney General or by aprivate litigant acting as a privateattorney general under the publicbenefit portion of Prop. 65. However,recent trends seem to indicate aretrenchment from strict compliancewith Prop. 65, especially in the phar-maceutical context. The CaliforniaSupreme Court's acceptance ofDowhal, and recent trial court deci-sions in Aipharma and The VaccineCases, inqicate that state judgesare more likely to view Prop. 65as impeding the FDA's regulatoryprovisions, and thus pre-empted byfederal law.

significance in reducing knownhealth risks, which the FDA takesinto consideration when approvingwarnings and labeling.PREscRlPnON DRUGS

The rules to be applied to pre-scription drugs are more precise thanfor OTC products. Not only do theenabling regulations to Prop. 65 pro-vide a "safe harbor," but recent trialcourt decisions have determined thatto the extent Regulation 12601(bX2)does not provide for an absolute safeharbor, the imposition of Prop. 65 lia-bility for prescription drugs is pre-empted by federal law.

In State of California v. AlpbannaUSPD Inc., Case No. 992915, the SanFrancisco Superior Court grantedsummary judgment on behalf ofAlpharma against a claim by theAttorney General that Alpharma vio-lated Prop. 65 in the labeling for itsLindane shampoo and lotion. TheAttorney General sued defendantAlpharma, claiming that there werechemicals in Lindane shampoo thatwere "known to the people of theState of California to cause cancer."Alpharma moved for summary judg-ment on the grounds that its Lindaneproducts contained a label approvedby the FDA. The trial court agreedwith Alpharma, finding that its onlyobligations under Prop. 65 were .

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