Incomplete FDA records doom Lanham Act claim

Alpharma, Inc. v. Pennfield Oil Co., 2008 WL 1990783 (D. Neb.)

Alpharma alleged that Pennfield falsely advertised that its animal antibiotic (a feed additive), which contained bacitracin methylene disalicyclate and was marketed as Pennitracin MD 50-G, was approved by the FDA for various uses. In earlier proceedings, the court dismissed Alpharma’s complaint on the ground that the FDA was the proper forum, but the Eighth Circuit reversed. Whether Pennitracin had been approved by the FDA for particular indications is a question courts can resolve by interpreting agency publications in the Federal Register and the CFR, whereas whether it should be approved is for the FDA to decide.

The facts are, to put it mildly, complicated. A summary that skims over numerous details and proceedings: the FDA has long worried about the effects on humans of antibiotics added to animal feed to improve productivity. Because the FDA’s records are incomplete, it’s not entirely clear that Pennitracin (under a different name) was approved under the rules that sort of govern the situation. (Sort of, because the regulations have been halfway updated since 1976, the last major revision, but the crossreferences haven’t, leading to some incoherence, and because the FDA is considering changing everything again.)

Pennfield submitted 1969 labels and other evidence to the court and to the FDA that strongly suggested, but did not establish beyond peradventure, that FDA had approved the drug. (The label essentially tracks the labeling of approved drugs from that time.) Pennfield’s predecessor engaged in extensive negotiations with the FDA, which allowed it to market the drug using the claims that were then approved for bacitracin methylene. As a result of an earlier Alpharma lawsuit against the FDA, the FDA opened a notice-and-comment procedure based on the confused factual and regulatory situation, in which Alpharma participated, but the FDA ultimately declined to act on Pennfield in particular, though it suggested that the entire animal-feed antibiotic field would soon face some broad regulatory changes.

The court found that these facts entitled Pennfield to judgment as a matter of law. Given that the FDA itself admits “there exists considerable confusion with respect to the historical facts of Pennfield’s or its predecessors’ approval,” the fact that the FDA may now consider its prior approval may have been erroneous or improvident was not relevant. The FDA, “properly or not,” approved Pennitracin by the time Pennfield put it on the market. The FDA’s use of a notice and rulemaking procedure showed that the FDA believed that Pennfield had an expectation “deserving of due process protection.” Moreover, through all this, the FDA never told Pennfield to stop marketing Pennitracin. Even if Pennfield didn’t have real approval, it was entitled to rely on the FDA’s representations during the 1990s that Pennitracin was approved.

Thus, Alpharma’s falsity and misleadingness claims failed.