By Terry Baynes

(Reuters) - A federal appeals court on Wednesday offered a glimmer of hope to plaintiffs' lawyers seeking to hold generic drugmakers liable for injuries allegedly caused by copycat products.

The 6th U.S. Circuit Court of Appeals in Cincinnati revived a lawsuit by Eleanor Fulgenzi, a woman who claimed generic drug company PLIVA Inc failed to warn her of the risks of developing a neurological movement disorder after using its gastric reflux drug for an extended period of time.

The ruling is significant because plaintiffs like Fulgenzi making "failure-to-warn" claims against generic makers have made little headway in the wake of the 2011 U.S. Supreme Court ruling PLIVA v. Mensing. In that case, the high court found that consumers could not bring failure-to-warn claims against generics under state law because federal law requires that the labels on generic drugs must match the labels on their brand-name counterparts.

However, during the course of the Mensing litigation, it emerged that PLIVA had failed to update the label on its gastric reflux drug, metoclopromide, to bring it in line with the brand version, Reglan, made by Schwarz Pharma.

The Food and Drug Administration approved Reglan in 1980, and generics began producing copycat versions five years later. The initial warning label on the drug read: "Therapy longer than 12 weeks has not been evaluated and cannot be recommended."

Over time, evidence mounted suggesting that long-term use of the drug could cause tardive dyskinesia, a neurological disorder affecting the lower face. In 2004, the FDA approved a label change proposed by the brand drugmaker stating in bold type: "Therapy should not exceed 12 weeks in duration." PLIVA did not update the label for its generic version and did not communicate the change to any physicians, according to the court's opinion. In 2009, the FDA ordered a black-box warning for the drug, saying that treatment for more than 12 weeks should be avoided in all but rare cases.

In her lawsuit, filed in 2009, Fulgenzi argued that because she took the drug between 2004 and 2007, when PLIVA's warning label was out-of-date, the generic drugmaker should be liable for her neurological injuries allegedly caused by the drug.

PLIVA responded that Fulgenzi was attempting to bring a failure-to-warn claim against a generic drugmaker, which was barred by the Supreme Court's Mensing decision. The company also argued that her suit was an attempt to enforce a federal labeling requirement, a power reserved to the FDA.

The district court in Akron, Ohio, agreed with PLIVA that the Mensing ruling knocked out Fulgenzi's claims and dismissed the case, but a three-judge panel of the 6th Circuit disagreed on Wednesday, reviving the suit.

The panel found Fulgenzi's case was different from the Mensing case, where the plaintiff had taken the generic drug when its label conformed to the brand drugmaker's label. In Mensing, it would have been impossible for the generic company to provide a stronger warning while following federal law, which required the generic to have the same label as the brand. In Fulgenzi's case, PLIVA's obligation to provide an adequate warning under state law was in line with its duty under federal law to adopt the brand drugmaker's stronger warning, the panel found.

"In our case, not only could PLIVA have independently updated its labeling to match that of the branded manufacturer ... it had a federal duty to do so," Judge Danny Boggs wrote for the unanimous panel.

FAILURE-TO-UPDATE CLAIMS

The court also rejected PLIVA's argument that Fulgenzi's suit was barred because she was attempting to enforce the federal law that requires the labels to match.

"The federal duty of sameness is not 'a critical element' in Fulgenzi's case. Her suit instead relies upon the adequacy of the warnings and the causation of her injuries," Boggs wrote.

While allowing the lawsuit to proceed, the court did note that Fulgenzi will face significant hurdles in winning her case. She will have to prove that PLIVA should have adopted the brand drugmaker's updated warning in 2004; that, if it had, doctors would likely not have prescribed her the drug; and that the drug caused her injury.

Teva Pharmaceuticals, which owns Croatia-based PLIVA, declined to comment on the ruling. PLIVA's lawyer, Jeffrey Peck at Ulmer & Berne, also declined to comment.

Plaintiffs around the country have attempted to bring similar "failure-to-update" claims against PLIVA after Mensing wiped out traditional failure-to-warn claims. The 6th Circuit is the first federal court of appeals to issue a precedential opinion on whether such cases can proceed.

In an unpublished per curiam opinion issued in February, Morris v. PLIVA, the 5th Circuit reached the opposite conclusion, finding that another plaintiff's failure-to-update claims over generic Reglan were pre-empted by Mensing.

The 6th Circuit's ruling is not likely to have a far-reaching effect because most generic manufacturers update their drug labels, said James Beck, a lawyer at Reed Smith who defends pharmaceutical companies in personal injury and product liability cases

Lawyers for Fulgenzi and plaintiffs in similar cases, however, said there is evidence of failure to update. They pointed to a study published in 2012 in the journal Pharmacoepidemiology and Drug Safety, which found that around 80 percent of generic manufacturers had labels that differed from the brands.

"This is not an obscure problem. It's a common problem," said Fulgenzi's lawyer, Louis Bograd.

The case is Fulgenzi v. PLIVA Inc, 6th U.S. Circuit Court of Appeals, No. 12-3504.

For Fulgenzi: Louis Bograd of the Center for Constitutional Litigation and Richard Schulte of Behnke, Martin & Schulte.

For PLIVA: Jeffrey Peck, Linda Maichl and Joseph Thomas of Ulmer & Berne.

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