Antitrust Law Daily Wrap Up, ADVERTISING—C.D. Cal.: Lanham Act claims against three drug makers survive motion to dismiss, (Oct 8, 2014)

By Linda O’Brien, J.D., LL.M.

A specialty healthcare company alleged sufficient facts to pursue Lanham Act claims against three pharmaceutical companies for falsely advertising that their products were approved by the Food and Drug Administration, when the products had not been approved by the agency, the federal district court in Los Angeles has decided (JHP Pharmaceuticals, LLC v. Hospira Inc., October 7, 2014, Pregerson, D.).

JHP Pharmaceuticals, now known as Par Sterile Products (Par), is a manufacturer of injectable epinephrine under the brand name Adrenalin. In 2012, Par submitted a New Drug Application (NDA) and was granted approval by the Food and Drug Administration (FDA) to market and sell Adrenalin. Hospira, American Regent, and International Medical Systems (IMS) manufacture other injectable epinephrine products that have not been approved by the FDA.

Par filed suit against Hospira, American Regent, and IMS, alleging false and misleading advertising and labeling in violation of the Lanham Act. Par asserted that the defendants: (1) represent to consumers that their products are FDA-approved when they are not; (2) misleadingly advertise that their products are safe and effective; (3) advertise products that are illegal to sell under the Food, Drug, and Cosmetic Act (FDCA); and (4) omit from their product labeling certain injection location and adverse reaction information that Par’s product must carry as part of its FDA-approved labeling. The defendants moved to dismiss the complaint.

FDA approval. The court determined that the plaintiff’s claim that the defendants misrepresented their products as being FDA-approved was not precluded by the FDCA. Par alleged that Hospira advertised its product (1) on certain industry lists that consumers expect products to be branded or generic equivalent drugs, (2) as an NDA product when it had not obtained FDA approval of an NDA, and (3) as the generic equivalent of Adrenalin.

The FDCA regulates the labeling and advertising of drugs and is enforced almost exclusively through the FDA. The court noted that the U.S. Supreme Court decision in POM Wonderful LLC v. Coca-Cola Co., 134 S.Ct. 2228 (2014), which held that the Lanham Act and FDCA were complementary statutes and the FDCA did not preclude Lanham Act claims challenging labels regulated by the FDCA, applied to drug marketing, medical device labeling, and any other marketing which fell under both the Lanham Act and FDCA. Thus, Par’s claims were not precluded, since the defendants never had their products approved by the FDA.

Primary jurisdiction did not bar the plaintiff’s claims, according to the court. Under the primary jurisdiction doctrine, a court having jurisdiction to hear a complaint may refer the action to an administrative agency for resolution of a particular technical issue. There was no need to invoke the doctrine regarding this claim because it took no special expertise to determine whether the FDA has granted approval or not. The FDA maintains a comprehensive list of approved brand name and generic drugs and the court did not need to refer the question to the FDA to make a factual determination.

Moreover, the plaintiff’s complaint was factually sufficient to support a Lanham Act claim. Par alleged specific representations by Hospira that its product was an NDA product and that American Regent and IMS put their products on industry price lists that buyers believe all such identified prescribed drugs are FDA-approved. While Par has not yet produced evidence of consumer beliefs, its allegations were sufficient at the current stage of the litigation, the court noted.

Safe and effective claims. However, the plaintiff’s claims that the defendants misleadingly represented their products as “safe and effective” lacked factual sufficiency. Par alleged no facts to show that the defendants’ products were unsafe or ineffective, the court determined.

Legality of products. The plaintiff’s allegation that the defendants falsely represented to consumers that their products complied with all applicable laws required a determination by the FDA. A finding that the drugs were being sold unlawfully was a complex issue and was within the primary authority of the FDA to decide.

Misleading labeling. Finally, the plaintiff failed to plead sufficient facts that the defendants mislead the public by not including in their packaging and labeling the warnings that Par’s products must carry under the terms of its FDA approval. Par did not allege facts to show that the negative message of its product was actually conveyed to consumers or prove the comparative safety of the various products at issue, the court concluded.

The case is No. CV 13-07460.

Attorneys: Brendan J. Hughes (Cooley LLP) for Par Sterile Products, LLC. Jeffrey A. LeVee (Jones Day) for Hospira, Inc., and International Medication Systems Ltd. Bruce G. Chapman (Sheppard Mullin Richter & Hampton LLC) for American Regent Inc.

Companies: Par Sterile Products, LLC; Hospira, Inc.; International Medication Systems, Ltd.; American Regent, Inc.

Cases: Advertising CaliforniaNews