What's in a name? A false advertising suit against a generic drug maker

Endo Pharmaceuticals, Inc. v. Actavis, Inc., 2016 WL 1090356, No. 12-cv-7591 (D.N.J. Mar. 21, 2016)

 

Endo sued Actavis under federal and state law for allegedly falsely marketing a generic form of oxymorphone hydrochloride extended-release tablets. The court got rid of the New Jersey consumer protection law claims because NJ’s law doesn’t protect competitors, but did allow some claims under the Lanham Act and the New Jersey Fair Trade Act.

 

Endo received FDA approval for an extended release oxymorphone hydrochloride pain reliever under the brand name Opana ER in 2006; Actavis received FDA approval for a generic form of that formulation in 2010.  Actavis’ generic is AB rated to Opana ER, meaning that it’s therapeutically equivalent.  “Concerned about the potential for abuse of the drug, including the possibility that persons would crush the pills and snort or inject the powder, Endo developed a crush-resistant version.”  The FDA approved this version in 2011.  Endo stopped making the old version but didn’t recall existing tablets, and began shipping the new formulation in 2012.  The new crush-resistant formulation was bioequivalent to the original formulation of Opana ER and was sold under the same brand name, distinguised as “Opana ER with Intac.”

 

Endo then filed a Citizen Petition with the FDA, seeking to have the FDA (1) determine that the old formulation of Opana ER was discontinued for reasons of safety, (2) refuse to approve any pending generic approvals for the old formulation, and (3) suspend and withdraw approval for generic versions of the old formulation. Endo also sued Actavis, arguing that Actavis’s marketing of “Generic Oxymorphone ER Tablets” as “AB Rated to Opana® ER”’ became misleading after May 2012, once Endo had stopped selling the old version.  The FDA denied Endo’s petition; the old formulation wasn’t withdrawn for safety or effectiveness reasons, because the data did not support the claim that Opana ER with Intac was superior.

 

Actavis argued that Endo was trying an end run around the FDA’s ruling that approvals of generics AB rated to old Opana ER were okay.  Under Pom Wonderful, there is some wiggle room for a false advertising claim not reliant on interference with FDA decisionmaking.  Endo’s basic argument: “the consumer could now mistakenly infer (as the consumer could not have before) that Actavis’s drug is AB rated to Opana® ER with Intac.”  Can a brand name manufacturer “render the generic manufacturer’s true advertising misleading and then sue on that basis”?

 

Casting some shade on Endo’s arguments, the court noted that “Endo itself simultaneously marketed the two versions of the drug for some months, but of course does not accuse itself of confusing physicians.”  Endo’s scrupulousness in distinguishing between the two versions, however, posed factual issues not suitable for a motion to dismiss.

 

On its face, Actavis’s ad said it was AB rated to Opana ER, which seemed unambiguous and true.  But since then, Endo argued, there was another formulation of Opana ER, with the same name, “sort of.”  Thus, Opana ER might mean two different things, though not too different; because Endo only makes Opana ER with Intac, consumers might now take Actavis’s claim to be one of equivalence to Opana ER with Intac.  A doctor might be misled into thinking there’s just one version of the drug on the market, but actually there are two. 

 

The court noted that Endo didn’t recall its old Opana ER and let two versions exist on the market for a while, selling off the old while it ramped up production of the new.  It took from February 2012 to after the end of May 2012 for the old inventory to clear the pipeline and for Endo to stop marketing old Opana ER.  “The FDA apparently found this highly significant in rejecting Endo’s petition. And Endo in this action will face the question of how it could keep the two drugs straight in physicians’ minds then, but can no longer do so now.”

 

The FDA’s rulings about safety tended to undercut the materiality of the allegedly misleading statements. “Endo’s safety concerns about Old Opana® ER (which seemed to have crested shortly after it sold off the last of its inventory) have not been borne out.” And whether doctors ought to be prescribing one version or another was not a Lanham Act issue, but an FDA issue.

 

Actavis also argued that it no longer advertised that its product was AB rated to Opana ER; the complaint’s ads dated from 2011.  This created a factual issue that would also need to be explored, as did whether Actavis was seeking approval for a crush-resistant version of its own.  Still, on the pleadings, this was not a claim ruled out as a matter of law: Endo pled “false statements about matters the consumer is likely to care about in making a purchasing choice.”  The court noted that targeted discovery and an early motion for summary judgment might well be appropriate.