"same" claim was literally false where probiotics had different strains and different profiles

ExeGi Pharma, LLC v. Brookfield Pharmaceuticals, LLC, --- F.Supp.3d ----, 2023 WL 3142311, No. 20-CV-192-JPS (E.D. Wis. Mar. 21, 2023)

ExeGi sued Brookfield for state and federal false advertising/tortious interference. The court here resolves only the Lanham Act claims, partially in ExeGi’s favor.

The parties compete in the market for probiotics. ExeGi sells Visbiome; Brookfield sells HPP as a food product. “To the extent HPP is marketed as a medical food and deemed a medical food, it is required to be consumed under the supervision of a physician.” Brookfield attempted to copy Visbiome’s formulation based on its expired patent; HPP is produced in a different manufacturing facility than Visbiome, under different conditions, but was made with the same species of bacteria as were listed on the expired patent for the formulation of Visbiome plus an additional species of bacteria. Prior to the expiration of the patent, however, three of the strains listed in the patent were reclassified as different strains from different species. “Thus, HPP has three species of bacteria not in the formulation of Visbiome, and Visbiome has one species of bacteria not in the formulation of HPP.” Also of relevance, “[d]ifferent strains of bacteria within the same genus and species can have different functionalities in and benefits to the human body, and can have widely differing performance characteristics and modes of action.… HPP and Visbiome have sufficiently different metabolic profiles, meaning the two products are … genetically and biologically different.”

Visbiome “is one of the most extensively studied probiotics on the market, having been the subject of more than 70 human clinical trials.”  

Brookfield “formulated” HPP “as a generic to” Visbiome. Its label doesn’t list the exact quantity of each bacteria species or strain designation, noting instead that its blend of bacteria is proprietary. The label indicates that HPP is a medical food for the dietary management of dysbiosis associated with gastrointestinal conditions such as irritable bowel syndrome and ulcerative colitis. It doesn’t explicitly claim to have been the subject of tests or studies. The insert says:

High Potency Probiotic Capsules are labeled as a medical food as defined by the Orphan Drug Act and additional FDA regulations. … This medical food is not subject to NDA or ANDA approval and is not an Orange Book product. This product is intended to be used under active medical supervision.

These statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure or prevent any disease.

INDICATIONS AND USAGE

High Potency Probiotic Capsules are intended for the dietary management of individuals with distinct nutritional requirements relating to dysbiosis associated with GI conditions such as IBS and [ulcerative colitis]. High Potency Probiotic Capsules are a non-drug medical food that addresses distinct nutritional requirements to promote microbial balance in people with dysbiosis associated with IBS that cannot be achieved by modification of diet alone.

Maintenance of a healthy gut microbiota contributes to an overall healthy gastrointestinal environment. [citations]

Brookfield relied upon a summary of scientific literature to support its dietary management claims, along with dossiers created for each of the bacteria used in HPP. No clinical trials have been performed on the HPP formulation as a whole. With regard to the nine individual strains of bacteria contained in HPP, there have been no clinical studies performed on five of those strains.

It also made a number of comparative claims that it was generic, comparable, comparable generic, compared to, competed against, had the “same strains,” had the “same probiotic bacteria,” and had the same GCN as Visbiome (a GCN is a standard number assigned by a drug pricing service to drugs). Although there don’t seem to have been surveys on this, “[m]ost of the public and some clinicians incorrectly refer to genus and species as ‘strains.’”

Brookfield identified its primary customers for HPP as “the large pharmaceutical wholesalers” and retail pharmacies, the latter using rebate programs that typically involve incentivizing one choice over another generic.  It didn’t advertise directly to clinicians or consumers, aside from the product label and package insert.

Brookfield represented in communications directly to individual retailers that it has the “same strains” of bacteria as Visbiome. A Brookfield witness clarified that this statement was not intended to mean that the products contained “all of the same strains,” but rather “many of the same strains.” Its scripted answer to questions regarding similarities is: “Brookfield’s High Potency Probiotic Capsules contain the same probiotic bacteria in the same total potency per capsule (112.5 billion bacteria) as (Visbiome). Since precise formulas are proprietary, we are unable to make an exact comparison to (Visbiome).”

First Databank, the largest of the drug compendia, groups drug and non-drug products under the same GCN if they have the same active ingredients, dosage form, route of administration, and strength. The parties’ products were at one time given the same GCN code, but that is no longer true. Brookfield initially represented to First Databank that HPP contains eight probiotic strains, rather than the nine it actually contains, which was corrected in 2019, when a revised label with nine strains was submitted. Brookfield also represented to First Databank that its product was a “Generic Equivalent” of VSL #3 and Visbiome and a “medical food.” It made similar statements to other drug compendia and wholesalers.

Brookfield’s witness testified that listing VSL #3 and Visbiome as products to which HPP is a “generic equivalent” on the HDA form “point[s]” recipients of the form “in the right direction of what these products are similar to,” though it was not accurate to refer to HPP as a generic equivalent of Visbiome because that term only has meaning in a drug context. ExeGi’s expert also stated that this was inaccurate because HPP and Visbiome are “genetically [and] biologically ... different.”

Unlike a drug, a medical food cannot claim to prevent, treat, cure or mitigate the symptoms of a disease without making a drug claim that would require FDA approval. The statute defines a medical food as “a food which is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.” But what constitutes an established “distinctive nutritional requirement” is not specifically defined by the FDA. The FDA inspected the facility that was manufacturing HPP, and they requested HPP’s label and packaging insert. It has not initiated any enforcement action as a result of its investigation.

The FDA’s Orange Book provides therapeutic equivalence evaluations, but it doesn’t apply to medical foods.

Did the non-label/package statements qualify as “commercial advertising or promotion”?  Yes: Brookfield disseminated information about HPP to the three largest pharmaceutical wholesalers, as well as directly to individual retailers. These communications were more than “purely negotiation of individual contracts, but rather encompass a variety of media through which Brookfield represented information about HPP.”

FDA/FDCA preclusion: ExeGi argued that it wasn’t asking the court to rule on whether HPP was actually a medical food, but whether Brookfield held HPP out as a medical food “despite having no data upon which to make such claims and affirmatively determining not to gather such data.” That didn’t avoid preclusion: “analyzing the quality of the data proffered by Brookfield in support of its claim that HPP is a medical food—or even determining that there is no data at all, as ExeGi would have the Court find—would require it to analyze an area that the FDA has expressly held out as its own for rulemaking.” Summary judgment granted to Brookfield as to this aspect of the case.

Literal falsity of the other statements: The court rehearsed the Seventh Circuit’s rather incoherent treatment of literal falsity, including the challenging statement that “‘literal’ must be understood in the common colloquial sense in which Americans ... say things like ‘I am literally out of my mind.’ ” Consistent with the Seventh Circuit’s, let’s say confident, approach to judicial factfinding, the court found literal falsity as to “same” claims but not “generic” claims.

Brookfield argued that “same” claims weren’t literally false because, in context, it didn’t mean

“all of the same strains,” but rather “many of the same strains.” The Court disagreed. Dictionaries define “same” as “identical or equal; resembling in every relevant respect” and “resembling in every relevant respect; being one without addition, change, or discontinuance.” The products aren’t the same in that way.  “[D]ifferent strains of bacteria within the same genus and species can provide different benefits to the human body, function differently in the human body, and have ‘widely differing’ performance characteristics and modes of action, as well as ‘sufficiently different’ metabolic profiles.” [Whose burden is it to show that “can” is “do” here?] Visbiome has also been the subject of over 70 human clinical trials, while HPP has not. “Same” was thus literally false. Even if Brookfield meant to say the “same species” instead of the “same strains,” that statement would still be literally false.

Brookfield argued that “same” didn’t mean “all the same,” but it required the court to read “same” as “many of the same” or “some of the same.” This

defies common sense. In the Court’s view, the word “same” unambiguously and unequivocally means “identical” or “equivalent” and, based on the undisputed evidence before it, “could not reasonably be understood to mean anything different.”

Generic/generic equivalent: There was a disputed issue of material fact on whether “generic” or “generic equivalent” had to mean “identical” in the context of non-FDA-approved medical foods. Brookfield noted that ExeGi hadn’t performed any testing to disprove genericity or evidence about the meaning of these terms in the context of non-drug products that are not subject to FDA approval. The parties offered conflicting evidence on whether “generic” meant “can be used as a substitute,” could apply to products with different strains, meant “lower-cost alternative of a similar product,” etc. But Brookfield didn’t show any relevant industry evidence to support its definition of “generic equivalent,” and its own testimony showed that it didn’t consider that HPP was a generic equivalent to Visbiome (it argued that it had used the phrase on a form that presumed FDA-approved drug status and was trying to fit a square peg in a round hole), so that was literally false:

The undisputed evidence indicates that industry players view the term “generic equivalent” as meaning a “substitute” for or an “equivalent” to another product. Thus, the undisputed evidence—particularly that products with different strains of bacteria within the same genus and species can have widely differing effects—makes it wholly clear to the Court that calling these products “generic equivalents” is literally false.

Materiality: Materially requires only a likely effect, not an actual effect, on consumers, so disputes over whether the challenged statements actually influenced drug compendia’s, wholesalers’, retailers’, or ultimate consumers’ decisions as to HPP compared to Visbiome were immaterial. Factors that go to materiality of a representation include “(1) consumer motivation, which typically considers the importance of the product or service feature to which a misrepresentation is directed; (2) consumer reliance, which considers how a misrepresentation is used; and (3) consumer concern, which considers the extent to which a misrepresentation departs from the facts.”

The challenged statements were material, given Brookfield’s marketing goal to get the same GCN as Visbiome. It was irrelevant that drug compendia relied only upon the labels of the products, and not the form claiming “generic equivalence,” in assigning GCNs. “This fact is immaterial given the legal standard of capacity to influence choice, rather than actual influence. While evidence of actual influence is a factor, it is not dispositive.” [Interesting interaction with Article III standing, it seems to me.] Emails from customers inquiring whether Visbiome is the “same” as HPP, among other evidence, showed that equivalence was “a product feature of concern to consumers.”

Actual/likely injury: ExeGi showed evidence of sales diversion, including customer statements explaining that they wanted to buy Visbiome but were sold HPP instead, including one customer who complained to ExeGi that a pharmacist informed her that HPP was the same as Visbiome and FDA-approved, both of which were literally false.

The common-law unfair competition claim received the same treatment; tortious interference with contract had genuine factual issues that precluded summary judgment.

The court also found permanent injunctive relief appropriate. “[T]he scope of ExeGi’s proposed permanent injunction would not remove HPP from the market; it would address only cessation of the challenged statements” that the court found literally false.