The court agreed to review a bid by Mutual Pharmaceutical Co to overturn a $21 million jury award to Karen Bartlett, a New Hampshire woman who had taken its generic non-steroidal anti-inflammatory drug sulindac for shoulder pain.

Bartlett was left with permanent near-blindness and burn-like lesions on two-thirds of her body after suffering a rare hypersensitivity reaction associated with the drug, and sued Mutual for alleged design defects under New Hampshire law.

Mutual, an indirect unit of Japan's Takeda Pharmaceutical Co, countered that federal law barred such claims because its drug had already been approved by the U.S. Food and Drug Administration, and federal law requires generic drugs to have the same design as their brand-name equivalents.

It cited the Supreme Court's June 2011 decision in Pliva Inc v. Mensing that federal law preempted state law claims based on alleged inadequate label warnings about potential side effects, given that federal regulations require brand-name and generic drugs to carry the same labels.

But in May, a unanimous three-judge panel of the 1st U.S. Circuit Court of Appeals in Boston refused to extend this ruling to design defect claims, and upheld Bartlett's award.

In its appeal to the Supreme Court, Mutual said "scores" of federal and state courts had rejected the 1st Circuit's "remarkable claim" that generic drug manufacturers could be liable under state law for refusing to stop selling their federally approved products.

Bartlett countered that the Supreme Court should not take the case, saying that lower courts were not divided over the issue, and that her award was based on New Hampshire law and that did not conflict with federal law.

The Generic Pharmaceutical Association submitted a brief in support of Mutual's appeal. A decision by the Supreme Court is expected by the end of June.

The case is Mutual Pharmaceutical Co v. Bartlett, U.S. Supreme Court, No. 12-142.

(Reporting By Jonathan Stempel; Editing by Kevin Drawbaugh and Tim Dobbyn)

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