When the specifics are misleading: medical test stats draw false advertising claim

Quidel Corp. v. Siemens Med. Solutions USA, Inc., 2017 WL 4654644, No. 16-cv-3059 (S.D. Cal. Oct. 16, 2017)

Quidel is a “diagnostic healthcare manufacturer” that “developed, promotes and sells the Thyretain TSI Reporter BioAssay,” which is “intended for the qualitative detection in serum of thyroid-stimulating immunoglobins (TSI).” Quidel alleged that Thyretain “is the only commercially available assay that detects TSI only, as opposed to those that fail to differentiate between thyroid-stimulating and thyroid-blocking immunoglobins” (TBI), commonly known as “TRAb” assays. Siemens sells the IMMULITE 2000/2000 XPi TSI assay, which is intended to compete with Thyretain. In 2016, Siemens obtained FDA clearance to market IMMULITE, under a “substantial equivalence” finding through the Section 510(k) premarket notification process.

Quidel cited seven scientific studies and alleged that IMMULITE detects both TSI and TBI, and therefore “compares similarly to other TRAb assays, detecting but not differentiating between stimulating and blocking antibodies.” E.g., one study found that while IMMULITE was “about as sensitive and consistent as the Thyretain bioassay,” it did not “consistently distinguish[ ] between stimulating and blocking activities in 20 selected cases of hypothyroid Hashimoto’s thyroiditis.”  Thus, Quidel challenged Siemens’ claims about its ability to differentiate TSI from TBI, e.g., “Unlike TRAb (TSH receptor antibody) assays which detect both stimulating and blocking antibodies, the Siemens TSI assay specifically detects only thyroid stimulating antibodies, which are the hallmark of Graves’ disease.”  The “only” claim was later discontinued (though the press release and marketing statements that included that word have not been removed from the web), but the current product description claims that IMMULITE detects TSI with 98.5% specificity, contrasting that to TRAb assays that detect both TSI and TBI, thus allegedly implying that IMMULITE is TSI only.  (What I can't tell from the specificity claim, and I haven't looked up the underlying documents, is whether this applies when there's TBI but not TSI present, which would affect how similar IMMULITE is to Thyretain.)  Given that IMMULITE costs less and works faster than Thyretain, Quidel alleged that this falsity caused it damage, including the loss of at least one lab customer at a cost of $250,000 a year and corrective advertising costs.

The court found that Quidel had sufficiently pled falsity and misleadingness to satisfy Rule 9(b) for its Lanham Act and California state law false advertising claims, as well as with intentional interference with economic advantage.  Likewise with materiality for false advertising: given the alleged cost and time differences, it is reasonable to infer that an equivalence claim would influence purchasing decisions.  Siemens argued that materiality was inadequately pled because labs are sophisticated parties and are required to independently verify an assay’s performance data, but that’s a matter of reliance at most, not materiality.

Siemens argued that the FDCA precluded the Lanham Act claim because the FDA pre-approved Defendants’ product name and performance data and required Siemens to include that information on the IMMULITE label and packaging insert. Moreover, Siemens couldn’t IMMULITE’s name or alter its specificity and sensitivity data without prior FDA approval.  Under Pom Wonderful, this argument failed. It’s still true that “a private action brought under the Lanham Act may not be pursued when...the claim would require litigation of [an] alleged underlying FDCA violation in a circumstance where the FDA has not itself concluded that there was a violation.”  However, the claim here didn’t implicate FDA determination of whether the premarket approval was ok.  Quidel didn’t challenge the product name and performance data in the labeling, but rather the marketing statements (including the use of specificity to distinguish IMMULITE from TRAb assays).  Thus, the court’s evaluation of Siemens’ similarity claims/failure to disclose the similarity of IMMULITE to TRAb assays wouldn’t intrude on FDA’s exclusive enforcement authority.  Likewise, it would not be impossible to comply both with the FDCA and state false advertising law.  “Removing the phrase ‘TSI only’ from Defendants’ marketing materials or adding a disclaimer that IMMULITE does not differentiate between stimulating and blocking antibodies does not reasonably lead to Defendants being forced to change their assay’s name or performance data such that Defendants would first need FDA approval.”