Overview
In a first, a California appellate court recently ruled that federal law preempts Proposition 65's warning requirement from applying to generic over-the-counter medication (OTC). The case is Center for Environmental Health (CEH) v. Perrigo Company (Cal. Ct. App., Mar. 9, 2023, No. A163682) 2023 WL 2421132, at *1. This decision is notable for not just being the first appellate decision on this subject, but also because preemption has rarely been a successful defense in Prop 65 matters, much less at the appellate level.
Proposition 65 is shorthand for the Safe Drinking Water and Toxic Enforcement Act of 1986, Health and Safety Code § 25249.5, et seq. The intended purpose of this law adopted by ballot initiative was advertised as a way for Californians to know what potentially hazardous chemicals were in the products they bought prior to purchase so as to make informed decisions.
The court unanimously upheld the trial court's sustaining demurrers brought by four generic drug manufactures and two retail defendants, finding impossibility preemption existed because the manufacturers cannot place Prop 65 warnings on their labels and still comply with FDA labeling regulations. The manufacturers were Perrigo Company, Apotex Corp., Granules USA, Inc. and Dr. Reddy’s Laboratories, Inc. CEH also served violation notices against retailers Target and 7-Eleven.
The Prop 65 claim involved a chemical that plaintiff alleged was found in the ranitidine pills made and sold by defendants - n-nitrosodimethylamine, or NDMA. Ranitidine was the generic form of Zantac. NDMA is not an added chemical, but one that forms at some point after manufacture. NDMA is a listed Prop 65 chemical, "known to the state" to be a carcinogen. The enforcer alleged exposure of the defendants' medication to the average consumer would exceed the state-created "safe harbor" level of .04 micrograms per day, and that defendants should have and failed to place Prop 65 warnings for cancer.
The manufacturers noted that placing Prop 65 warnings on their labels would make it impossible to comply with labeling obligations under federal law governing drugs, the Food Drug & Cosmetic Act (FDCA). Prop 65 provides that federal law trumps state law where federal law governs warnings "in a manner that preempts state authority." (HSC § 25249.10.). The court found that impossibility exemption in fact existed. Express preemption was not available, given there exists in the federal regulations a unique carve out, intended to allow the enforcement of Proposition 65 above and beyond federal regulations. (21 USC §§ 379r, 379r(c)(2).)
The federal regulation creating the impossibility in this case arises from the FDA's requirement of "sameness" between the labels of the brand name manufacturer and the generic manufacturer. (PLIVA, Inc. v. Mensing (2011) 564 U.S. 604, 612-613; Mut. Pharm. Co. v. Bartlett (2013) 570 U.S. 472, 476.) These cases dealt with the sameness of labeling for prescription generic products. The court in this CEH case agreed with defendants and found the preemption extends as well to generic OTC drugs such as the one at issue. Under current law, the brand manufacturer has the ability to request approval from FDA to change its labeling; if a change is made, the generics must follow suit and update their labels to match. They cannot act unilaterally and cannot provide a different product Prop 65 warning.
Can preemption as to OTC drugs be avoided by communicating Prop 65 warnings through means other than the product labeling? The enforcer argued that almost any form of public communication can serve as a proper warning method for Prop 65. It suggested warnings could be provided at the point-of-sale or through public advertising and would not affect the generic manufacturers’ labeling obligations under federal law. The court, however, agreed with defendants that a manufacturer cannot be liable under Prop 65. It confirmed that a warning about generic medication is labeling and that labeling is governed by the FDA. Prop 65 therefore is preempted. The court said that the methods the enforcer identified and called warnings all qualified as labeling of the OTC drugs under the federal regulations.
What about reformulation instead of warnings? One potential way to avoid Prop 65 claims is to reformulate the product, removing or reducing the amount of the chemical at issue from the product so that the exposure comes in lower than the established safe harbor level. The court found that the possibility the manufacturer can reformulate the drug does not save the Prop 65 claim where all forms of Prop 65 warnings would conflict with federal law.
It is unclear if the enforcer will appeal. If this decision stands, it represents a significant clarification for the pharmaceutical industry, as it may now prevent similar Prop 65 claims against generic drugs - prescription or OTC. This is a welcome development considering that manufacturers are already subject to stringent FDA regulations of the medication and have robust testing programs.
