Washington (CNN) -- Two women who say they suffered severe medical complications from a generic drug are asking the Supreme Court to allow their separate lawsuits against the pharmaceutical manufactures to proceed. The justices, in oral arguments Wednesday, gave no clear indication where they were leaning.
The high court two years ago said federal warning requirements by the Food and Drug Administration did not preempt, or block, state court claims against brand-name prescription drug makers. These latest cases test whether the lucrative generic drug industry can be held to the same liability.
At issue: should generic drug companies share responsibility with makers of brand-name equivalents to update their warning labels when significant new risks emerge?
The financial and safety implications from the court's ruling, which is due by June, could prove enormous. Generic drugs currently account for more than 70% of prescriptions filled in the United States. That number is expected to rise in the coming years, with patent protection due to expire on several popular and lucrative consumer drugs, including Lipitor and Viagra. The blockbuster health care reform bill championed by President Barack Obama would also encourage greater use of generics. About a third of generic drugs have no brand name competitors.
The justices offered conflicting observations about whether Congress intended separate state lawsuits in the generic market.
"Do you think Congress really intended to create a market in which consumers can only sue brand-named products?" asked Justice Sonia Sotomayor. "Because if that's the case, why would anybody ever take a generic? And why in the world would Congress -- or even the FDA -- create a different obligation on brand-named products than generic products?"
But Justice Samuel Alito pursued another legal avenue. "Has the FDA made any calculation of the economic consequences of imposing this duty on generic drug manufacturers?" he asked. "I don't know whether this is a good idea or not, but it does seem to me that it may significantly increase the costs for generic drug manufacturers, and therefore counteract one of the objectives of the statute, which was to provide generic drugs at a low cost."
Gladys Mensing of Minnesota and Julie Demahy of Louisiana both were prescribed metoclopramide -- marketed as Reglan by Wyeth Pharmaceuticals -- to treat their heartburn and acid reflux. Their pharmacists separately filled the prescription with a generic equivalent made by PLIVA, Inc. and Actavis, Inc.
After four years of taking the drugs, the women each developed tardive dyskinesia, a severe longterm neurological disorder that causes involuntary muscle movements.
They sued the generic manufacturers of the metoclopramide, claiming that inadequate warnings were provided about the long-term risks of taking the medicine. It was also alleged there was growing evidence of the dangers posed by the drug, but that the companies took no steps to change the warning labels.
In 2009, the FDA acted on its own and issued an order to the makers of both brand-name and generic versions of metoclopramide to add a specific warning about the increased risks of developing tardive dyskinesia.
The generic drug makers are trying to dismiss the lawsuits. They cite a 1984 congressional law pre-empting state "failure-to-warn" claims.
Drug companies have long asserted various doctrines of pre-emption, saying they are protected from most product-liability claims if they have met federal safety approval standards. They argue that federal regulatory judgments trump state consumer safety laws, which are often tougher than Washington's standards.
But the high court had given a big victory to patients and consumer rights groups in 2009 when it ruled in favor of plaintiff Diana Winn Levine, when she sued Wyeth -- now owned by Pfizer -- after losing an arm to gangrene from a common anti-nausea prescription medication. She had won a $7 million judgment from a Vermont jury for her claims.
In arguments Wednesday, attorney Jay Lefkowitz told the court that generic drug companies could not have complied with often strict state consumer laws because that would require labeling their products differently than what appears on the brand-name label drug, which they claim is a violation of federal law.
But Justice Stephen Breyer seemed unconvinced. "So your argument is that if we run across this tremendous... really serious problem, you're saying the state has no right to say -- even if we purposely didn't tell anybody -- they can't get involved?"
Lefkowitz conceded that that was the law as he understood it and that "states simply don't have a business trying to enforce those [federal] obligations."
Justice Ruth Bader Ginsburg disagreed. "The federal agency says that these [state] suits complement, they're not at odds with the federal regime, because they give the manufacturers an incentive to come forward," she said. "Everyone is interested in making sure that only safe drugs are marketed."
Louis Bograd, representing the plaintiffs, met some resistance from several justices about the effect that greater tort liability would have on the generic drug industry.
Scalia said generic drug makers typically don't have the research and oversight apparatus that brand-name companies -- with their higher prices -- possess.
"The argument here is whether it will be the FDA ultimately that determines whether there was a grave enough risk to modify the label or whether that call will be made by a state court guessing what the FDA would have done, right?" he said. "I don't see how you can hold them [generic companies] liable, so long as they continued to give the warnings that they had to give."
But Bograd, citing the growing popularity of generics, said when problems occur, "If generics are not responsible, in many of these cases no one is responsible."
The Obama administration is backing the plaintiffs, concerned that if state lawsuits are pre-empted by federal law, that will reduce the incentive for generic drug makers to provide the most current safety information to the FDA.
Chief Justice John Roberts said generic makers would find an easy way around that, something which may not benefit consumers.
"Every time a generic manufacturer gets an adverse incident report, it will send that on to the FDA, and there will be a boilerplate sentence at the end of it saying, 'We think you should consider revising the labels because of this,' and then, under your theory, that manufacturer is completely protected from state suits?"
He said a flood of such reports would overwhelm the federal agency, and make it hard to separate serious, immediate concerns.
The cases are PLIVA, Inc. v. Mensing (09-993); Actavis Elizabeth, LLC v. Mensing (09-1039); Actavis, Inc. v. Demahy (09-1501).