SDNY gives Procter & Gamble heartburn

Mylan Pharmaceuticals, Inc. v. Procter & Gamble Co., 2006 WL 435471 (S.D.N.Y.)

Mylan sued P&G over ads for the over-the-counter version of Prilosec (omeprazole). Mylan makes an FDA-approved generic version of prescription omeprazole. P&G, under a license from Astra Zeneca, makers of prescription Prilosec, made and advertised FDA-approved Prilosec OTC.

Mylan alleged that P&G's ads falsely claimed that Prilosec OTC was the same drug as prescription omeprazole and that Prilosec OTC was approved for conditions as to which prescription omeprazole, but not Prilosec OTC, had been proven safe and effective. (Prilosec OTC is only approved for frequent heartburn; omeprazole is approved for Gastroesophageal reflux disease (GERD), erosive esophagitis, duodenal ulcers, gastric ulcers, and pathological hypersecretory conditions.) The court, ruling that some of P&G's statements could be read to expressly claim equivalance between OTC and prescription omeprazole, held that there were material disputes of fact about whether the two were equivalent, which was an objectively verifiable question. Thus, summary judgment was denied to both sides.

Mylan also argued that any claim that Prilosec OTC is the same as prescription omeprazole implies that the OTC version has been approved for the same conditions for which the prescription version has been approved. There is no private cause of action under the Food, Drug and Cosmetics Act for a claim that the product has been unlawfully promoted for a non-approved or off-label use. Furthermore, given that the FDA approved the labeling, there can be no claim that the name Prilosec OTC is inherently misleading because it's associated with the prescription version. In this case, however, Mylan presented a consumer survey showing that P&Gs statements of equivalence confuse consumers into thinking that the two products have been approved for the same condition. The court concluded that this theory was not barred by the Lanham Act, and disputed issues of material fact meant a denial of summary judgment.

This is an important result. There has always been a tension in FDA-related Lanham Act cases: one strand says that which the FDA has approved, let no court put asunder. Another says that consumer deception, if proved to be occurring, is actionable. Here, the idea that the challenged claim was implied through advertising provides a way to manage the tension: Victory for the plaintiff would not necessarily require P&G to change the labeling, which requires FDA approval. But what if a survey showed that the name Prilosec applied to an OTC product would always lead consumers to believe it was approved for all prescription indications? Then we'd be forced to pick which matters more, FDA approval or deception.

Background: because P&G and Astra Zeneca believed that the FDA would not approve Prilosec for OTC use for conditions requiring a doctor's diagnosis, they only sought approval for frequent heartburn. The parties dispute whether the OTC version can in fact safely and effectively treat the other gastrointestinal conditions for which prescription omeprazole is approved; the FDA said at one time that Prilosec OTC was "an appropriate treatment for erosive esophagitis and Barrett's esophagus," though it's not approved for those conditions.

The approved label says that Prilosec OTC may be used to treat "frequent heartburn," warning consumers that certain symptoms "may be signs of a serious condition." The label doesn't explicitly say that Prilosec OTC may not be used to treat conditions other than heartburn. In fact, whever the label, doctors may legally recommend Prilosec OTC for any use.

While approval was pending, generic manufacturers submitted citizen petitions to the FDA, arguing that extending the brand equity of Prilosec to an OTC version would inevitably confuse and mislead consumers about their ability to self-treat more serious diseases. While the Lanham Act suit was pending, the FDA denied these citizen petitions. The FDA's response observed that reports of the use of Prilosec OTC for prescription-labeled conditions represented a miniscule fraction of the amount of Prilosec and Prilosec OTC sold. A number of OTC products have the same active ingredient and product name as a prescription counterpart even though they have different indictations, including Motrin AB, Zantac 75, Pepcid AC, and Tagamet HB. Given that both products contain omeprazole, there's no risk of confusion as to the pharmacalogical effect.

The initial ads made a number of "heritage" claims referring to the prescription version of Prilosec, such as "One of the world's largest selling prescription medicines is now over the counter as Prilosec OTC."

P&G argued that the FDA's approval was a dispositive determination that its packaging and labeling, including the name, are neither false nor misleading. In prior cases, courts have distinguished between ads that merely repeat approved labeling information and those making claims not approved for labeling or packaging; only the former are protected against Lanham Act claims. Indeed, the FTC, not the FDA, directly regulates advertising for OTC drugs, indicating that the FDA is not necessarily the final authority.

The court accepted that three of P&G's ad statements might be literally false:
• "One of the world's largest selling prescription medicines is now over the counter as Prilosec OTC."
• "One of the world's top-selling prescription drugs in its class now over the counter."
• "This was the world's # 1 selling prescription medicine. And now, it's over the counter right in your store." (The court also allowed other, slightly different wordings to go to the jury.)

The basic problem is that Prilosec OTC is not identical to prescription omeprazole, which remains available only by prescription. A reasonable jury could conclude that, though the active ingredient is the same, they have different formulations (OTC has magnesium and is a tablet, whereas the prescription version is a capsule, and P&G concedes they aren't bioequivalent), making the claims literally false.

As for the implied falsity of being approved for the same conditions, Mylan submitted a consumer survey by frequent Lanham Act flyer Jacob Jacoby. Jacoby's survey concluded that two-thirds of respondents were misled by P&G's TV and print ads – they were iether led to believe that Prilosec OTC and prescription omeprazole were the same drug product, or that the two had been approved for the same indications. In addition, P&G's own records reveal "voluminous" complaints from consumers who believed that P&G's ads promised equivalence (and were presumably disappointed).

P&G argued that any gap between the ads and the truth was not material. Though the drugs are not bioequivalent, they are similarly bioavailable, which means that they achieve approximately the same concentrations in the bloodstream. The court found that a reasonable jury could conclude that the falsity (if any) would likely influence consumers' decisions. Given that Prilosec OTC is available as a tablet and the prescription version only as a capsule, and consumers prefer the tablet form, they might use the OTC version if they believed the two were the same. Moreover, it's undisputed that the FDA has approved them for different indications.

Though it's not quite clear, it seems that the court thinks a reasonable jury could conclude that the mere fact of FDA approval for an indication is material, which seems right to me. Even if the underlying evidence is the same, consumers might prefer an FDA-approved product on the theory that the FDA has more experience in evaluating that evidence, which consumers are largely unequipped to evalute on their own. With explicit claims, "our product works" or even "tests show our product works" would be less persuasive than "the FDA agrees our product works," and it should be no different for implicit claims.