(Adds comments from musician, drugmakers group)
By Lisa Richwine
WASHINGTON, Oct 31 (Reuters) - The U.S. Supreme Court hears arguments on Monday in a closely watched case that could limit liability claims against drugmakers if one of their medicines causes harm.
The case pits drug giant Wyeth WYE.N against a guitarist who lost part of an arm after she was improperly injected with an anti-nausea drug made by the company.
A Vermont jury awarded the woman, Diana Levine, $7 million in damages. Her attorneys argued Wyeth should have given stronger warnings about the dangers of administering the drug in the way she received it.
Wyeth says it acted properly by including the U.S. Food and Drug Administration's approved warnings on the label for the drug, Phenergan.
"We were under federal command to put out the label exactly as FDA approved it," Bert Rein, an outside lawyer for Wyeth, said in an interview.
"We were doing something we thought was consistent with the public health and so did FDA."
The key legal question is whether the FDA-approved label preempts state product safety laws, as Wyeth and other drug companies argue. They say state juries looking at the experience of one patient do not have the expertise to determine if a drug has proper warnings.
Federal preemption has been a goal of the pharmaceutical industry for years and the position has been supported by the Republican George W. Bush administration. The Supreme Court's decision could limit the ability of patients to sue and save drugmakers billions of dollars.
The case also could affect millions of other businesses outside the pharmaceutical industry that face liability claims, the U.S. Chamber of Commerce says.
Preemption opponents say the FDA does not always make the right judgment and therefore companies should not be fully protected by the agency's backing.
By providing a legal shield with the FDA label, "it decreases manufacturers' incentives to improve safety and to inform FDA of risks," Levine's lawyers said in a brief for the Supreme Court.
In her case, the drug accidentally hit an artery when it was injected, leading to gangrene that required amputation of her right hand and arm below the elbow.
"I lost my whole livelihood and my love -- my instrument," Levine said by phone.
She faults Wyeth for not placing stronger warnings on Phenergan telling doctors to avoid the risky injection method. That method was "an accident waiting to happen," she said.
"It's just not worth the risk," she said, adding there were other safe ways to use the drug.
The Supreme Court already ruled in favor of federal preemption earlier this year. In February, the justices sided 8-1 with medical device maker Medtronic Inc (MDT.N) after it was sued by a man harmed by a catheter during an artery- clearing procedure.
Preemption "is not about providing blanket immunity" for drugmakers and "will not deny patients their day in court," said Ken Johnson, a spokesman for the Pharmaceutical Research and Manufacturers of America, a drug industry group.
Judges and juries still could award damages if manufacturers fail to meet with FDA standards, he said.
If the Supreme Court strongly backs preemption again, Democrats in Congress have pledged to push legislation to preserve a patient's right to sue under state law.
"I think we could see the backlash come through very quickly in Congress," said Kim Monk, a health-care industry analyst with Capital Alpha Partners.
The case at the Supreme Court is Wyeth vs. Levine. (Additional reporting by Susan Heavey; Editing by Brian Moss and Andre Grenon)