Supreme Court rules against Wyeth in liability case

By Lisa Richwine and James Vicini

WASHINGTON (Reuters) - The U.S. Supreme Court ruled against the drugmaker Wyeth on Wednesday, holding that pharmaceutical companies can be held liable for harm from medicines that carry warnings approved by federal regulators.

By a 6-to-3 vote in a major defeat for the pharmaceutical industry, the high court ruled that labeling approvals by the U.S. Food and Drug Administration do not pre-empt state laws and shield companies from legal damages as part of liability claims.

A Vermont jury awarded $7 million in damages to a guitarist, Diana Levine. Part of her arm had to be amputated after she was improperly injected with the anti-nausea drug Phenergan made by Wyeth as part of treatment for a migraine.

The justices affirmed a Vermont Supreme Court ruling that upheld the award and rejected Wyeth's argument that labeling approval by the FDA pre-empts state law liability claims.

"The question we must decide is whether the FDA's approvals provide Wyeth with a complete defense to Levine's tort claims. We conclude that they do not," Justice John Paul Stevens concluded in the court's majority opinion.

Levine's attorneys said Wyeth should have given stronger warnings about the dangers of administering the drug in the way she received it.

Wyeth said its labeling provided clear instructions and warnings on Phenergan. The company also said it believed federal law prohibited it from revising the information.

"We regret that the Supreme Court disagreed," Bert Rein, an outside lawyer for Wyeth, said in a statement.

Federal pre-emption has been a goal of the pharmaceutical industry for years and was supported by the Republican Bush administration and business groups upset by large damage awards.

Stevens, however, rejected the argument that Levine's claims of harm were pre-empted because it would be impossible for Wyeth to comply with both state-law duties and federal labeling requirements.

He said Wyeth could have unilaterally added a stronger warning about the IV-push method of administration used with Levine, and there is no evidence the FDA would ultimately have rejected such a labeling change.

Under federal law and FDA regulations, the manufacturer bears responsibility for the content of its label at all times, Stevens said.

He also rejected Wyeth's argument that requiring it to comply with state-law duties to provide a stronger warning would interfere with Congress' purpose of entrusting an expert agency with drug labeling decisions.

The history of the Food, Drug and Cosmetic Act shows that Congress did not intend to pre-empt failure to warn lawsuits under state law, Stevens said in the 26-page opinion.

Chief Justice John Roberts and justices Antonin Scalia and Samuel Alito dissented. "This case illustrates that tragic facts made bad law," Alito wrote.

(Reporting by Lisa Richwine and James Vicini, editing by Gerald E. McCormick, Dave Zimmerman and Matthew Lewis)