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New Drug-labeling Rule to Benefit Consumers

Allegations about Federal Preemption Should Not Worry Texans

A new drug-labeling rule from the United States Food and Drug Administration (FDA) aims to give both medical providers and patients clearer information about prescription drugs.

The new rule changes the content and standardizes prescription drug labels to make them more patient-friendly — a welcome change for Americans who often find their prescriptions accompanied by sheets of paper covered in small print jargon. Too often that fine print delivers incomprehensible and overwhelming information, trading cumbersome legal warnings for the clear and concise information that consumers really need.

While the legalese makes prescription drug labels less patient-friendly, pharmaceutical manufacturers rely on these warnings to help defend themselves from almost certain future lawsuits. As such, pharmaceutical companies were rightly concerned that the FDA’s new patient-friendly rules for simplified labels would also be a gold mine for trial lawyers primarily concerned about establishing new profit centers for their businesses.

The potential of receiving large judgments or settlements has long motivated trial lawyers to mine the minutiae and complexity of modern society for the least technicality on which they might hang a lawsuit. Accordingly, pharmaceutical manufacturers could reasonably predict that trial lawyers would use the simplified product labels as an opportunity to sue the companies over every word that had been deleted.

In response to these concerns, the FDA included language in the rule’s preamble formalizing the FDA’s position that federally approved prescription drug labels preempt state liability laws.

The preemption language predictably drew the ire of trial lawyers and their friends who realized that the federal preemption may thwart their efforts to take advantage of the clarity of the new labeling standards. Under the guise of federalism, the trial bar and its allies in many state legislatures charged that the preemption rule, “amounts to an abuse of agency process and a complete disregard for our dual system of government.”

Texans, though, should not be worried about overreaching federal power in this instance. Unlike some other cases of excessive federal involvement in state issues, here there are legitimate concerns about protecting consumer safety in the course of interstate commerce.

The National Highway Traffic Safety Administration (NHTSA) proposed similar rules in 2005 that would preempt state products liability laws if an automaker’s vehicle roofs met federal safety standards. In the case of the automakers, the proposed rules increased the amount of weight a vehicle’s roof must withstand in a rollover accident, including the language that would extend automakers protection for meeting the NHTSA’s safety standards. This is a common sense policy that applies the federal safety standard across all states, rather than binding the automakers’ liability to different standards set in every state.

Such a standard makes sense for pharmaceuticals in particular, precisely because the FDA sets the safety standards for prescription drugs and acts as the gatekeeper on the market. Prescription drugs that satisfy federal safety and labeling standards ought not to be subject to fifty different safety standards once the FDA has approved the safety and efficacy of the product. Furthermore, compliance with FDA labeling requirements designed to give consumers more useful information should not leave manufacturers exposed to liability.

Texans have spent more than a decade reforming the state’s tort system in order to provide an environment where businesses can profitably meet consumers’ needs. This includes not only making better, cheaper products, but safer products as well. The two-pronged approach of simplifying labels and standardizing consumer safety requirements is exactly in line with Texas’ efforts, and should be applauded by advocates of consumer protection, tort reform and federalism alike.

Mary Katherine Stout is the director of the Center for Health Care Policy, and Bill Peacock is the director of the Center for Economic Freedom, at the Texas Public Policy Foundation, an Austin-based research institute.