On May 18, the FDA extended the comment period for its proposed generic drug labeling rule until April 2017 – that is, until after the next presidential election.  We believe that, for all practical purposes, this means that the proposed rule is dead.  Here’s why we think that.

As we have maintained from the beginning, the statute, which requires generic labeling to be the “same” as innovator labeling, simply does not support the FDA proposal to allow CBE labeling changes that would result in generic labeling that is not the “same.”  The FDA can do a lot of things, but it can’t do that – the opposite of what its organic statute specifically requires.  The generic drug industry knows this, too, and from day one has vowed an administrative challenge to any rule that violates statutorily-mandated sameness.

As we have also maintained almost from the beginning, the FDA’s proposed rule has been driven by the desire of the political FDA leadership (who broke the rules regarding impartial communication with outside groups) to overturn the generic preemption decisions, PLIVA v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013).  They are doing this as affirmative political payback to satisfy the plaintiffs’ trial bar, for whom they broke the aforesaid rules.  The plaintiffs’ trial bar have, of course, been major political supporters of the current administration, and as long as they tell the FDA’s political leadership to jump, during this administration the response will be “how high.”

Even in our most recent post on the subject – about the last postponement of the proposed rule last December – we speculated that the rest of the FDA was probably looking to run out the (electoral) clock:

This is starting to look like the FDA is playing out the string. With this date, there doesn’t seem any way that the rule becomes effective during this administration, given the time that expected legal challenges would take.

We said that before Justice Scalia died. Now we’re sure of it.

The non-political part – by far the largest part – of the FDA has inherent institutional needs. The Agency hasn’t exactly fared well in recent cases involving agency deference (Levine, Western States, Smoking Everywhere, Caronia, etc.), and we doubt that those in the FDA who are concerned with preserving the Agency’s litigation reputation and judicial credibility are eager for a drawn-out administrative law challenge to any eventual final generic labeling rule.  Given the express language of the Hatch-Waxman amendments, that challenge is almost certainly an stone, cold loser.

Now, nobody has to. No matter what the result of the election, the underlying political calculus that has so-far driven the FDA’s proposed generic labeling rule has ceased to exist.

That’s not necessarily helpful to the generic industry, or to our (defense) side as a whole, but it’s true.

Critically, both Mensing and Bartlett were 5-4 decisions, with Justice Scalia in the majority.  That all four Mensing dissenters continued to dissent in Bartlett tells us that those justices don’t care about stare decisis in this instance and will happily vote to overrule if given the chance. The Supreme Court lineup in Mensing/Bartlett indicates that judicial and political partisanship are strongly aligned with respect to generic drug preemption.  Justice Scalia, and every other justice in the Mensing/Bartlett majority, were Republican appointees.  All four dissenters were Democratic appointees.

While nothing is absolutely certain, this situation means that, if the next president is a Democrat, her likely appointee (or President Obama’s, if the Republicans end their unprecedented Supreme Court nominee boycott) could very well tip the Supreme Court balance on generic drug preemption. At that point it would be much quicker and more certain for the plaintiffs’ bar to renew their judicial assault on Mensing/Bartlett in anticipation of a new Supreme Court justice with a probable anti-preemption stance.  By comparison, pursuing the FDA’s rule becomes a high risk/low benefit option.  It’s a loser on the statutory language, the administrative review process takes a long time, and even if the FDA’s new non-same sameness rule were to be upheld, it would be completely non-retroactive in effect.  Unlike a 5-4 Supreme Court decision overturning Mensing/Bartlett, nothing in the rule could possibly benefit any potential plaintiff who took a generic drug prior to the FDA’s proposed rule having been judicially affirmed and actually taking effect.  With a Democratic White House, the other side has better options than the FDA’s Hail Mary regulatory action.

On the other hand, if the Republicans win the White House, then the FDA’s political leadership will be promptly replaced, and the proposed generic labeling rule will be withdrawn, and perhaps be replaced with the alternative Expedited Agency Review (“EAR”) proposal that would actually expand preemption.

Either way, there will be no need for the FDA to continue with the current controversial generic labeling proposal that carries significant litigation and other (Congressional attempts to cut off funding for implementation) risks to the Agency’s institutional values, which its permanent legal staff would no doubt be happy to avoid.

Let’s see what happens.