Antitrust Law Daily Wrap Up, ADVERTISING—3rd Cir.: Endo’s false advertising claims against Actavis over Opana ER generic equivalency revived, (Dec 5, 2014)

By Linda O’Brien, J.D., LL.M.

In an action by Endo Pharmaceuticals, manufacturer of the pain medication Opana ER, against generic drug manufacturer Actavis for falsely advertising the bioequivalency of its generic version to Endo’s newer formulation of the drug, a district court erred in granting the defendant’s motion to dismiss on the basis of the primary jurisdiction doctrine, the U.S. Court of Appeals in Philadelphia has ruled. The district court order dismissing the complaint was vacated and remanded (Endo Pharmaceuticals Inc. v. Actavis Inc., December 5, 2014, Chagares, M.).

Endo Pharmaceuticals developed and marketed the pain medication Opana ER and its alternate crush-resistant formula. Generic drug maker Actavis sold a generic version of Opana ER, which was “AB rated,” meaning that the Food and Drug Administration (FDA) approved it as bioequivalent to the brand name drug. Actavis’ generic drug was not AB rated to the newer, crush-resistant formula. In May 2012, Endo voluntarily discontinued the original Opana ER, leaving the crust-resistant formula as the only Opana ER on the market.

After Actavis continued to market its generic as “AB rated to Opana ER,” Endo filed a petition with the FDA, seeking a determination that it had withdrawn Opana ER from the market for safety reasons, that any pending applications for generic versions be refused, and approval of formerly approved generics be withdrawn. Endo also suit against Actavis, bringing Lanham Act claims for false advertising and unfair competition. The district court dismissed Endo’s complaint and Endo appealed.

The appellate court found that the district court’s decision to abstain on the grounds of primary jurisdiction was an abuse of discretion. The doctrine of primary jurisdiction applies where a claim is originally cognizable but enforcement requires the resolution of issues which are within the special competence of an administrative body under a regulatory scheme.

Endo argued that the application of primary jurisdiction was misguided because the fact question at issue was not whether Actavis’ generic was biochemically equivalent to Opana ER – a determination within the FDA’s special competence – but whether it had been approved as AB rated to Opana ER, which the district court could resolve by consulting the FDA’s catalog of generics listed for Opana ER.

According to the court, the district court reasonably wanted to know whether approval for Actavis’ generic would be withdrawn as a result of Endo’s petition to the FDA. Subsequent to the district court decision, the FDA determined that Opana ER was not withdrawn for safety or effectiveness reasons and approval of generics related to the original Opana ER would not be withdrawn. The FDA determination rendered the district court’s application of the primary jurisdiction moot and the case should be remanded for the district court to address the remaining arguments of whether Actavis engaged in false advertising by marketing its generic as AB rated to Opana ER, the court concluded.

The case is No. 13-3981.

Attorneys: Robert D. Rhoad (Dechert LLP) and Thomas P. Lihan (Law Office of Thomas Lihan LLC) for Endo Pharmaceuticals Inc. Charles A. Weiss (Holland & Knight) for Actavis Inc. and Actavis South Atlantic LLC.

Companies: Endo Pharmaceuticals Inc.; Actavis Inc.; Actavis South Atlantic LLC

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