when can pharma experts testify about compliance with the FDCA? (also some survey stuff)

ImprimisRX, LLC v. OSRX, Inc., 2023 WL 7390842, No. 21-cv-01305-BAS-DDL (S.D. Cal. Nov. 8, 2023)

Imprimis sued defendants, competitors in the compounding pharmacy industry, for false advertising, trademark and copyright infringement, and related claims. It alleged that defendants falsely advertised that they’re in compliance with Section 503A of the FDCA, governing compounding.

The court here admits the parties’ experts.

Imprimis’s trademark survey expert (for secondary meaning) didn’t use a control group, but that went to weight rather than admissibility in the absence of other serious problems. The survey targeted an appropriate population (ophthalmologists and optometrists as confirmed via a series of employment questions), used a standard question format, provided a “don’t know/have no opinion answer,” excluded respondents who answer questions too quickly, randomized the questions, and surveyed an appropriate population size. Nor did failure to address genericity render the survey inadmissible.

Another expert surveyed prescribers to opine on the extent to which a company’s advertising claim that it operates in full compliance with Section 503A is important to them. In the closed-response survey, the expert included a question asking whether it would be “important to [respondents] when selecting a compounding pharmacy” that the “Pharmacy is in compliance with local zoning requirements” as a control question: Respondents that selected this question were removed from her final estimates. Whether this control adequately accounted for noise went to weight rather than admissibility. Again, there weren’t other serious problems.

Defendants argued that the expert didn’t evaluate the advertising at issue—the survey didn’t ask whether the “small-font claim” on defendants’ actual webpage would be important to prescribers in their purchasing decisions. Using hypotheticals rather than the exact statements at issue went only to weight; it was still relevant to materiality.

Defendants also argued that the survey’s results were logically contradictory and thus fundamentally flawed. Although 54.1% of survey respondents selected “Pharmacy operates in full compliance with Section 503A regarding compounded drugs” under the FDCA as an important factor in selecting a compounding pharmacy, in a separate question, 57.4% of survey respondents answered they were not aware of Section 503A prior to taking the survey. Again, this went to weight rather than admissibility unless “a survey’s results are so illogical as to cast doubt over its reliability, the inquiry can move from weight to admissibility,” which didn’t happen here.

The results were logically possible: “Prescribers can maintain a preference that compounding pharmacies follow all applicable rules and regulations without having an awareness of all the applicable rules and regulations.” Also, the control question attempted to isolate Section 503A’s importance relative to other, hypothetical regulations. Finally, “even if the response is irrational where a respondent believes Section 503A compliance was an important factor in selecting a compounding pharmacy but is unaware of Section 503A, the assumed percentage of irrational responses is not so significantly pervasive as to morph the issue from weight to admissibility.”

Plaintiffs also designated an expert on pharmacology and pharmacy operations to opine on what compound medications are, what the differences are between Section 503A and Section 503B facilities, what restrictions govern Section 503A pharmacies, whether defendants operate in compliance with Section 503A regulations, and why compliance with Section 503A regulations is important.

The proposed expert was qualified: he was clinical faculty at the University of California San Diego School of Pharmacy and Pharmaceutical Studies where he teaches classes in pharmacy law and ethics, among other things. Although he wasn’t a licensed attorney, “his practical and academic experience with compounding regulations qualifies him to offer his opinions about compliance with Section 503A regulations.” And his expertise would assist the jury: he was interpreting the evidence for whether defendants were filling bulk orders in contravention of Section 503A and evaluating their suggestions for order volume according to his familiarity with industry norms and practices.

But did he offer impermissible legal conclusions? “The Ninth Circuit has previously allowed expert testimony about compliance with industry standards and regulations, where that testimony does not reach the ultimate issue of law, even if that testimony was couched in legal terms.” This depends a lot on exactly what the expert says. Here, he wouldn’t be allowed to present statements such as “OSRX routinely violates the rules ... of 503A pharmacies,” but he could testify to his opinions on how to understand Sections 503A and 503B regulations and apply those industry norms, regulations, and practices to the facts at hand.

Defendants’ proposed expert on the same topic got in too. She didn’t need to be a statistician to testify that “OSRX routinely dispenses its compounded drugs pursuant to valid patient-specific prescriptions, as required under section 503A of the [FDCA].” She had “the requisite exposure and experience to select a simple subset of prescriptions to review and is qualified to opine on the subject matter as an expert witness under Rule 702.” But, like plaintiff’s expert, she would not be allowed to say “OSRX’s dispensing practices are compliant with 503A pharmacy requirements.” Instead, she could testify about her review of OSRX’s prescription data and whether defendants appear to prescribe products in bulk. Her review of the records would assist the jury in understanding whether a valid prescription was present for each allegedly bulk order/office stock, which a layperson would struggle to do.