Late last year, the Third Circuit Court of Appeals, in In re Avandia Mktg., Sales & Prods. Liab. Litig., became one of the first circuit courts in the country to tackle the thorny issue of preemption following the U.S. Supreme Court's "clarifying" language in Merck. In doing so, the court reversed a district court's ruling in favor of preemption and revived 10-year old claims made by two health-care plans against GlaxoSmithKline (GSK) over its marketing of the diabetes drug Avandia. The decision is important for its interpretation of the high court's recent guidance for what constitutes "clear evidence" in cases of alleged preemption and for its persuasive authority in other jurisdictions.

The plans sued back in 2010, alleging that GSK falsely marketed Avandia and concealed data regarding the cardiovascular risks of the drug in violation of various state consumer-protection laws. The plans argued that they would not have covered the cost of treatment with Avandia—which was considerably more expensive than alternatives—had they known that Avandia was not only not protective of cardiovascular health, but increased cardiovascular risk.

U.S. District Judge Cynthia Rufe of Philadelphia granted summary judgment in favor of GSK, finding that the plan's claims were preempted under the doctrine of impossibility preemption.  "Impossibility preemption" is an affirmative defense premised on a claim that a federal regulation would have prohibited the additional warnings that the plaintiff alleges state law requires. In other words, it is "impossible for a private party to comply with both federal and state requirements." Wyeth v. Levine, 555 U.S. 555, 571 (2009). The U.S. Supreme Court has characterized impossibility preemption as a "demanding defense." Wyeth, 555 U.S. at 565 n.3.

Judge Rufe ruled the facts established "clear evidence" that in 2006 and 2007, when GSK and the FDA were discussing new studies regarding Avandia's potential risk of myocardial ischemia, the FDA would not have approved a label change.

The Third Circuit reversed. The court's preemption analysis hinged on the U.S. Supreme Court's 2019 decision in Merck Sharpe & Dohme Corp. v. Albrecht, 139 S.Ct. 1668 (2019). The Merck decision, which built upon the court's prior drug labeling preemption decision in Wyeth, set forth a two-pronged test for establishing "clear evidence": The drug manufacturer must demonstrate (1) "it fully informed the FDA of the justifications for the warning required by state law," and (2) "the FDA, in turn, informed the drug manufacturer that the FDA would not approve changing the drug's label to include that warning." Merck, 139 S.Ct. at 1678. The Third Circuit held that GSK had failed to satisfy this two-pronged test.

GSK had argued that it supplied the FDA with all the existing "material" information relative to the FDA's 2007 inquiry letter and that it did not have access to the additional information requested by the FDA until after the FDA had requested it. The appeals court rejected this argument. According to the court, the FDA's 2007 letter to GSK stated that it had reviewed the data provided by the company and found that the information presented was "inadequate" to make a determination regarding cardiac safety, indicating that GSK needed to address the deficiency. Thus, stated the court, GSK could not logically argue that it had "fully informed" the FDA of the justifications for the warning when the FDA itself stated that it was "inadequately" informed of such justifications.

Writing for the court, Judge Restrepo said "GSK is not the arbiter of which data and information is or is not 'material' to the FDA's decision to approve or reject a change to a drug's label—the FDA, and only the FDA, can determine what information is 'material' to its own decision to approve or reject a labeling change." In re Avandia, 945 F.3d 749, 759 (3d Cir. 2019) (emphasis in original).

The court also rejected GSK's claim that it did not have access to the additional information requested by the FDA until after it received the FDA's 2007 letter. The court held:

If GSK wishes to rely on the [l]etter as proof that the FDA rejected its proposed label change, it must also demonstrate that the FDA possessed all the information it [FDA] deemed necessary to decide whether to approve or reject the proposed warning at the time it issued the letter. By arguing that it [GSK] did not have the FDA's requested data and information until after the FDA issued its letter, however, GSK is, in effect, conceding that the FDA was not "fully informed" at the time of the [l]etter's issuance.

In re Avandia, 945 F.3d at 759 (emphasis in original).

GSK also argued that it could not have requested a label change under the Changes Being Effected (CBE) process to warn about ischemic risks until mid-2006, when it submitted its label change request. The CBE regulation "permits drug manufacturers to change a label to reflect newly acquired information if the changes add or strengthen a … warning for which there is evidence of a casual association, without prior approval from the FDA." Merck, 139 S.Ct. at 1679. GSK reasoned that study ICT-42 was the basis for its belief that an ischemic-risk warning should be added to the label, and that study had not been completed until mid-2006. For that reason, claimed the company, it did not have the "newly acquired information" necessary to make a label change before then. Rejecting this argument, the appellate court pointed out that GSK described the results of a prior study (ICT-37), completed in 2005, as "generally similar" to ICT-42, and GSK stated that any numerical differences between the two studies "were not clinically significant." In re Avandia, 945 F.3d at 760. Accordingly, the court found GSK's argument undermined by its own admissions.

The court also rejected GSK's assertion that its informal phone conversations with an FDA official—who advised the company that it could not pursue a label change through the CBE process—constituted official agency action. Quoting Merck, the court stated that "[a]n informal phone conversation with an FDA official is not 'agency action taken pursuant to the FDA's congressionally delegated authority.'" In re Avandia, 945 F.3d at 760 (quoting Merck).

The Third Circuit also held that the drug manufacturer failed the second prong of the Merck test. Here, GSK had argued that it was entitled to preemption because the FDA informed the company in the 2007 letter that it would not approve GSK's requested label change, specifically finding GSK's request "not approvable." The court determined that, while the FDA's letter indeed stated that GSK's request for a label change was denied, it was rejected because the "information presented by GSK was inadequate," and the FDA further required GSK to "amend the supplemental application" for a label change. In other words, it cannot be said that the denial was based on the FDA's determination that there was no need for a stronger warning on myocardial infarction events; rather, denial was based on the various "deficiencies" that the FDA required GSK to remedy before it made its final determination.

As noted by Judge Restrepo, "At most, the [l]etter indicates that it is possible that the FDA could have rejected the label change after receiving the various data and information it requested from GSK, but as the Supreme Court has reiterated, the 'possibility of impossibility [is] not enough.'" In re Avandia, 945 F.3d at 760.

Courts within the Third Circuit have already begun to implement the "clear evidence" standard enunciated in the In re Avandia and Merck decisions. Just last month, in Crokett v. Luitpold Pharms., the Eastern District of Pennsylvania rejected a preemption argument involving a drug called Injectafer, which received approval in 2013. Prior to receiving approval, the drug's manufacturer received two non-approvable letter (in 2006 and 2007) that cited safety concerns involving a condition known as hypophosphatemia (HPP). Upon receiving approval, however, the label did not contain a "warning" for this condition, although it was listed in the "adverse reaction" section. The manufacturer filed a preemption motion based on this regulatory history. Specifically, the defendants argued that the non-approval letters were evidence that the FDA was aware of and considered the severe HPP risk and chose not to warn of it, as evidenced by the FDA's subsequent approval of the drug with its current label.

In rejecting this claim, the district court ruled that defendants had not satisfied the "clear evidence" test for establishing preemption. Relying on Merck and In re Avandia, the court held:

Defendants do not argue or point to any "evidence" that they proposed a stronger warning to the FDA or that the FDA would have rejected a different warning label. Accordingly, Defendants have not shown that they "fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve changing the drug's label to include that warning."

Crocket, 2020 WL 43367, at *7-8 (E.D. Pa. Jan. 28, 2020) (quoting Merck).

To be sure, the Third Circuit's well-reasoned decision in In re Avandia will prove to be of persuasive value to sister courts considering what constitutes "clear evidence" for purposes of impossibility preemption.

R. Jason Richards is a partner with Aylstock, Witkin, Kreis & Overholtz in Pensacola, Florida. He focuses his practice in mass tort, product liability, class action and insurance litigation.