Tuesday, March 25, 2008

FDA preemption revisited

Healthpoint, Ltd. v. Allen Pharmaceutical, LLC, 2008 WL 728333 (W.D. Tex.)

Plaintiffs make XenaDerm, a wound-healing ointment. They alleged that they’ve tested it and marketed it so as to build brand awareness. Defendants make AllanDerm and market it as a generic equivalent to and substitute for XenaDerm. Plaintiffs claimed that this was false and misleading; defendants have no studies showing bioequivalence or therapeutic equivalence, nor did they test their product with the same rigor as XenaDerm was tested. Plaintiffs also alleged that AllanDerm is in fact inferior to XenaDerm. As a result of defendants’ acts, they claimed, AllanDerm and XenaDerm have been linked in drug dispensing databases and price systems, which pharmacists use in deciding what to dispense when filling a prescription. However, plaintiffs claim to need discovery to find out the details of the sales pitches, since much of the marketing for the products at issue occurs “under the radar” in “targeted communications with drug wholesalers, retailers and others.”

Defendants filed a motion to dismiss, claiming that resolution of the claim would require interpretation of FDA regulations. Plaintiffs responded that false and misleading representations of generic equivalence are actionable under the Lanham Act, and the FDA’s definition of equivalence provides guidance for courts in such circumstances.

The court declined to require a Lanham Act false advertising claim to be pled with particularity under Rule 9(b). Here, the complaint adequately alleged a specific false or misleading representation: the statement or implication that AllanDerm is a generic equivalent of XenaDerm.

Moreover, after an extensive review of the case law, the court concluded that FDA jurisdiction did not preclude the claims here, at least not at this stage of the case. There’s no bright-line test for distinguishing allowable claims from those that require direct application or interpretation of the FDCA or FDA regulations. Merely putting a product on the market can’t, as a matter of law, constitute a false implication of FDA approval, but other drug- and device-related claims may be actionable under the Lanham Act.

Defendants argued that plaintiffs could only win if the products are not in fact equivalent, and that only the FDA could decide that issue. Plaintiffs responded that, in fact, even if the FDCA did not exist, it would be possible to evaluate the truth or falsity of defendants’ advertising. The cases are, at best, confused about whether plaintiffs (1) must establish the standard for equivalence used in the industry, separate from the FDA definition; (2) may use industry or FDA definitions; or (3) must use the FDA definition. But they agree that a falsity claim is sustainable under the Lanham Act. In the end, defendants aren’t free to make false or misleading claims simply because a federal agency regulates drugs. Even if plaintiffs rely on the FDA definitions of equivalence, the court might not have to interpret those regulations in ruling on the merits. Thus, though it left open the option of revisiting the issue as the exact contours of plaintiffs’ claims emerged, the court refused to dismiss the claims at the pleading stage merely because they related to drugs within the purview of the FDA.

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