Antitrust Law Daily Wrap Up, ADVERTISING—D.N.J.: Pharmaceutical company must narrow Lanham Act claim, (Mar 22, 2016)

By Greg Hammond, J.D.

Claims that a generic pharmaceutical company falsely marketed a generic form of a prescription drug must be narrowed in light of intervening rulings of the U.S. Food and Drug Administration (FDA), the federal district court in Newark, New Jersey, has decided. The generic pharmaceutical company’s motion to dismiss was therefore denied with regard to false advertising and unfair competition claims brought under the Lanham and New Jersey Fair Trade Acts (Endo Pharmaceuticals, Inc. v. Actavis, Inc., March 21, 2016, McNulty, K.).

Endo Pharmaceuticals, Inc. developed and marketed the pain medication Opana ER and its alternate and newer crush-resistant formula. Generic drug maker Actavis, Inc. sold a generic version of Opana ER, which was “AB rated,” meaning that the FDA approved it as bioequivalent to the brand name drug. Actavis’ generic drug was not AB rated, however, to the newer, crush-resistant formula.

In August 2012, Endo filed a Citizen Petition with the FDA, seeking to have the FDA (1) determine that the old formulation of Opana ER was discontinued for safety reasons; (2) refuse to approve any pending generic approvals for the old formulation; and (2) suspend and withdraw approval for generic versions of the old formulation. Endo also filed suit against Actavis, alleging that Actavis’ marketing of “Generic Oxymorphone ER Tablets” as “AB Rated to Opana ER” became misleading after May 2012—the date Endo stopped selling the old formulation of Opana ER. The FDA subsequently denied Endo’s Citizen Petition and the U.S. Court of Appeals in Philadelphia vacated a district court order that dismissed Endo’s claims on the basis of the primary jurisdiction doctrine.

The action was once again before the district court on Actavis’ motion to dismiss Endo’s false advertising claims under the Lanham Act and New Jersey Fair Trade Act and Endo’s claim under the New Jersey Consumer Fraud Act.

False advertising. Endo’s claims could not survive to the extent it alleged falsity with regard to regulatory matters that the FDA ruled on, including that there were not safety concerns with regard to old Opana ER and that generic versions of old Opana ER may validly remain on the market. Nevertheless, the court identified other issues that still loom, including Endo’s allegations that Actavis “continues to market” its generic as AB rated to Opana ER, and that consumers are likely to rely on and have relied on Actavis’ misrepresentations in distributing, prescribing, dispensing, and purchasing Actavis’ generic. The motion to dismiss the false advertising and unfair competition claims was consequently denied, but Endo will need to redefine or narrow its theory in light of the intervening rulings of the FDA.

The motion to dismiss was granted, however, with regard to the New Jersey Consumer Fraud Act because Endo is not a consumer of Actavis’ product, but a competitor of Actavis.

The case is No. 12-cv-7591 (KM).

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

Cases: Advertising NewJerseyNews