Big Pharma companies with weak pipelines likely envy the makers of generic drugs, whose profits stand to increase as innovators’ drugs lose patent protection. But business for generic-drug manufacturers is not necessarily simple. In fact, a lawsuit to be heard by the US Supreme Court shows that these companies may face significant risks, even if they play by the rules.

Gladys Mensing sued PLIVA (Zagreb, Croatia), alleging that metoclopramide, which she took to treat diabetic gastroparesis, gave her tardive dyskinesia, a neurological movement disorder. As required by federal rules, the labels for generic metoclopramide matched those of the innovators, which did not warn about tardive dyskinesia while Mensing was taking the medicine. The US Food and Drug Administration ordered such warnings to be added in February 2009.

A federal judge threw out Mensing’s lawsuit, saying that it was preempted by federal regulations requiring the labels to match. The Eighth US Circuit Court of Appeals overturned this decision, however. “The generic defendants were not compelled to market metoclopramide,” the appeals court said, according to the Associated Press. “If they realized their label was insufficient but did not believe they could even propose a label change, they could have simply stopped selling the product. Instead, they are alleged to have placed a drug with inadequate labeling on the market and profited from its sale.”

It would seem unfair to punish PLIVA after it had marketed its product according to federal regulations. But the Eighth Circuit Judge raises a crucial point: ethical considerations should have stopped PLIVA from selling its drug if it knew that the label was insufficient. But how much did PLIVA know about metoclopramide’s potential side effects?

The fact that FDA originally approved the drug without a warning, only to add it later, reminds me of the controversy surrounding GlaxoSmithKline’s (GSK, London) Avandia. During a 10-year period after the drug was approved, more than 47,000 people taking it needlessly suffered a heart attack, stroke, heart failure, or death, according to one study. It would be wrong to blame the unfortunate adverse events entirely on FDA for approving the drug; the agency may not have gotten all of the relevant data. Senate investigators concluded that GSK did not share with regulatory authorities clear indications that Avandia increased heart risks.

The Avandia story illustrates that, despite its best efforts, FDA cannot yet completely protect us against drugs’ harmful side effects. The belated modification of the metoclopramide label indicates to me that the drug entails a significant risk of causing tardive dyskinesia. Given that FDA sometimes fails to mandate that drugs carry adequate warnings, I think that patients who can demonstrate that approved drugs have harmed them should have legal redress. I look forward to seeing how the Supreme Court decides this case.