Drug Industry Wins In 2 Supreme Court Rulings

The U.S. Supreme Court handed the pharmaceutical industry two major victories on Thursday. In one case, the court struck down a Vermont law that barred the buying, selling and profiling of doctors' prescription records. And in the second, the court ruled the makers of generic drugs are immune from state lawsuits for failure to warn consumers about possible side effects as long as they copy the warnings on brand-name drugs.

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The U.S. Supreme Court handed down two rulings yesterday that will benefit the pharmaceutical industry. One decision helps drug companies promote more expensive brand name drugs; the other immunizes generic drug makers from most lawsuits for failure to warn consumers about side-effects.

NPR legal affairs correspondent Nina Totenberg reports.

NINA TOTENBERG: Two decisions, one focused on the First Amendment, the other on when federal authority trumps states rights. And both will almost certainly result in enormous, unintended consequences for the nation's health policy.

In one case, a sharply divided Court ruled five-to-four that makers of generic drugs are immune from state lawsuits for failure to warn consumers about possible side-effects. The ruling is directly at odds with a decision just two years ago, in which the Court, by a six-to-three vote, ruled that brand name drug manufacturers are not immune.

Writing for the majority yesterday, Justice Clarence Thomas acknowledged that his opinion dealt what he called: An unfortunate hand that makes little sense to those who are harmed by generic drugs and are unable to sue. But essentially, he said, the law is the law, even if it's schizophrenic, and, in his words, bizarre.

The decision could affect millions of Americans since 75 percent of all drug sales are generic. In a blistering dissent, Justice Sonia Sotomayor called the decision absurd, and said that when consumers are injured because of inadequate drug warnings, their ability to seek restitution will depend entirely on whether the pharmacist who filled their prescription filled it with a generic - you have no recourse, or a brand name - you can sue.

NYU: generics, free from lawsuits, would become even cheaper. But, as NYU law professor Katherine Sharkey puts it, for people who have good insurance or personal resources...

KATHERINE SHARKEY: ...they now have an incentive to have the brand name drug as opposed to the generic. Because with the brand name drug, they are also getting this added liability protection. They can bring the tort lawsuits forward, where as with the generic, they cannot.

TOTENBERG: In a second decision, with enormous potential ramifications, the court, by a six-to-three vote, struck down a Vermont law that barred the buying, selling, and profiling of doctors' prescription drug records. The case arose in the context of federal and state regulations that uniformly require pharmacies to keep records of all doctors' prescriptions. But pharmacies can and do sell those records to data mining companies, with patient identifiers removed. And the data mining companies, in turn, sell the information to drug makers for use in tailoring sales pitches to doctors in an effort to get them to get them to prescribe more brand name drugs - drugs that are more expensive than generics.

The data miners and the pharmaceutical industry challenged the law in court, contending it unconstitutionally cut them out of access to information that is, under the Vermont law, available to researchers and cost cutting state agencies.

Yesterday, the Supreme Court agreed with that argument and struck down the law in a sweeping first amendment decision that appears to bring protections for commercial speech to a new level. Writing for the court majority, Justice Anthony Kennedy dismissed the state's justifications for the law - protecting doctor privacy, the integrity of the doctor patient relationship, and reducing drug costs. Instead, he said, the state had discriminated against the drug companies and their commercial message.

Physicians groups were infuriated by the court's ruling. Dr. Norman Ward, vice president of the Vermont Medical Society, said the court seemed oblivious to the way drug companies and their teams of salesmen work, and impervious to the states effort to bring down medical costs.

NORMAN WARD: With health care costs so out of control, to promote a playing field that arms those wishing to promote specific higher cost brand name drugs, that may or may not have more efficacy than generic alternatives, seems unwise.

TOTENBERG: The dissenters, led by Justice Stephen Bryer, suggested that at the very least, the court was opening up a Pandora's box of first amendment challenges to ordinary regulatory practices. Indeed, within hours of the decision, lawyers representing business and financial interests were contemplating new first amendment challenges to laws that restrict the way securities can be sold; and lawyers for the tobacco industry said they now have fresh ammunition for fighting the FDA's new requirement for graphic depictions of health risks on cigarette packages.

Nina Totenberg, NPR News, Washington.

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