February 02, 2021 Practice Points

The MODERN Labeling Act and Its Impact on Generic Drug Manufacturers

Those representing pharmaceutical drug manufacturers should understand what the act is and what it may mean for your clients.

By Steven Harkins and Taryn Harper

On November 17, 2020, the U.S. House of Representatives passed the Making Objective Drug Evidence Revisions for New (MODERN) Labeling Act of 2020 (H.R. 5668). With bipartisan support, the bill was poised to be passed by the Senate. Per government websites which track legislation, the bill is listed as having passed the House only or specifically to have died in in the Senate at the end of the 2020 legislative session. See govtrack.us, H.R. 5668 (116th): MODERN Labeling Act of 2020; congress.gov, H.R. 5668—MODERN Labeling Act of 2020. However, while the stand-alone bill did indeed stall, the text of the bill was adopted wholesale into the Consolidated Appropriations Act, 2021. As such, those representing pharmaceutical drug manufacturers should understand what the act is and what it may mean for your clients.

The MODERN Labeling Act, codified with the addition of Section 503D to Chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.), permits the U.S. Food and Drug Administration (FDA) to require generic drug manufacturers to update the labeling for certain generic drugs to reflect new scientific evidence, updated requirements for format or content, new clinical uses, or other changes to benefit public health. The act aims to address an issue that occurs where a generic drug label, which, pursuant to the Hatch-Waxman Act (Drug Price competition and Patent Term Restoration Act of 1984 (Public Law 98-417)), must be identical to that of the branded drug product (also referred to as the reference listed drug (RLD)), essentially becomes frozen in time because the RLD leaves the market for reasons other than safety or efficacy. Under this scenario, historically, as new scientific information relevant to the drug’s indications, safety or efficacy became available, the generic manufacturer could not unilaterally update its label to incorporate that information, resulting in generic drug labels that may be, in some instances, lacking relevant and updated information.

The act attempts to resolve that issue by allowing the FDA to identify generic drug products that remain on the market after the RLD has been removed, and whose labeling needs to be updated to reflect new information, either through “cooperative agreements or contracts with public or private entities” or after seeking public input concerning certain drugs. See H.R. 5668 Sec. 503D(b). Specifically, the act states that the FDA could require a generic drug manufacturer to update its drug label where: (1) “there is new scientific evidence available pertaining to the existing conditions of use,” (2) “the approved labeling does not reflect current legal and regulatory requirements for content or format,” (3) “there is a relevant accepted use in clinical practice that is not reflected in the approved labeling,” or (4) “updating the labeling would benefit the public health.” Id. Sec. 503D(a)(1)(C). Notably, the act does not impose any obligations on generic drug manufacturers to take affirmative action prior to the FDA identifying a product and determining there is a basis to require updated labeling.

If the FDA believes a labeling update is appropriate under the act, it must first provide notice to the generic drug manufacturer. Id. Sec. 503D(d). The act requires that the notice both “summarize[] the findings supporting the determination . . . that the available scientific evidence meets the standards . . . for adding or modifying information or providing supplemental information to the labeling,” as well as “provide[] a clear statement regarding the additional, modified, or supplemental information for such labeling.” Id. Sec. 503D(d)(1)–(2). The act further provides that the manufacturer, within thirty days of receiving such notice, must either agree to the proposed labeling changes or notify the FDA that it does not believe the changes are warranted and submit a statement in support of its position. Id. Sec. 503D(e). After considering the generic manufacturer’s response, the FDA may then order that the manufacturer make the changes the FDA deems appropriate, and the manufacturer would be required to (1) “update its paper labeling for the drug at the next printing of that labeling,” (2) “update any electronic labeling for the drug within 30 days of such order,” and (3) “submit the revised labeling through the form, ‘Supplement—Changes Being Effected.’” Id. Sec. 503D(f).

The MODERN Labeling Act creates a number of potential litigation issues for generic drug manufacturers to consider, in addition to the requirements of responding to specific FDA action contemplated by the act. Failure to warn claims previously preempted on the basis that the generic manufacturer cannot unilaterally alter, amend, or change the warning label may see renewed scrutiny. It remains to be seen how FDA action contemplated by the act, particularly for claims that arise after the FDA provides notice but prior to a revision of the label, will impact preemption arguments. Plaintiffs may also seek to revisit an argument from PLIVA v. Mensing, 131 S. Ct. 2567 (2011), where the FDA took the position that manufacturers of generic drugs, although unable to make unilateral labeling changes, nevertheless have a duty to propose stronger warnings to the FDA upon finding reasonable evidence of an association with a serious hazard, and thereby prompt the FDA to work with the manufacturer of the branded drug to update the label. 564 U.S. at 616, 618–19 (relying on 21 U.S.C. § 352(f)(2) and 21 C.F.R. § 201.57(e)). The Mensing court did not decide the issue.

The act does not demand additional monitoring for safety or efficacy on the part of generic manufacturers, and, in the absence of a specific request from the FDA, the act does not expand the responsibility for initiating a labeling change in response to new information to the generic manufacturers. The public policy of allowing generic manufacturers to rely on their branded counterparts and the FDA for monitoring and responding to new safety and efficacy information, in exchange for providing lower cost drugs to the market remains undisturbed. Accordingly, the act should not threaten this paradigm and the well-established jurisprudence supporting the defense of generic preemption in state tort liability claims under Mensing and its progeny.

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Steven Harkins and Taryn Harper are associates in Greenberg Traurig, LLP’s Atlanta, Georgia, office. 


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