When the specifics are misleading: medical test stats draw false advertising claim

Quidel Corp. v. Siemens Med. Solutions USA, Inc., 2017 WL
4654644, No. 16-cv-3059 (S.D. Cal. Oct. 16, 2017)
Quidel is a “diagnostic healthcare manufacturer” that
“developed, promotes and sells the Thyretain TSI Reporter BioAssay,” which is
“intended for the qualitative detection in serum of thyroid-stimulating
immunoglobins (TSI).” Quidel alleged that Thyretain “is the only commercially
available assay that detects TSI only, as opposed to those that fail to
differentiate between thyroid-stimulating and thyroid-blocking immunoglobins” (TBI),
commonly known as “TRAb” assays. Siemens sells the IMMULITE 2000/2000 XPi TSI
assay, which is intended to compete with Thyretain. In 2016, Siemens obtained FDA
clearance to market IMMULITE, under a “substantial equivalence” finding through
the Section 510(k) premarket notification process.
Quidel cited seven scientific studies and alleged that IMMULITE
detects both TSI and TBI, and therefore “compares similarly to other TRAb assays,
detecting but not differentiating between stimulating and blocking antibodies.”
E.g., one study found that while IMMULITE was “about as sensitive and
consistent as the Thyretain bioassay,” it did not “consistently distinguish[ ]
between stimulating and blocking activities in 20 selected cases of hypothyroid
Hashimoto’s thyroiditis.”  Thus, Quidel
challenged Siemens’ claims about its ability to differentiate TSI from TBI,
e.g., “Unlike TRAb (TSH receptor antibody) assays which detect both stimulating
and blocking antibodies, the Siemens TSI assay specifically detects only
thyroid stimulating antibodies, which are the hallmark of Graves’ disease.”  The “only” claim was later discontinued (though
the press release and marketing statements that included that word have not
been removed from the web), but the current product description claims that
IMMULITE detects TSI with 98.5% specificity, contrasting that to TRAb assays
that detect both TSI and TBI, thus allegedly implying that IMMULITE is TSI
only.  (What I can’t tell from the specificity claim, and I haven’t looked up the underlying documents, is whether this applies when there’s TBI but not TSI present, which would affect how similar IMMULITE is to Thyretain.)  Given that IMMULITE costs less and
works faster than Thyretain, Quidel alleged that this falsity caused it damage,
including the loss of at least one lab customer at a cost of $250,000 a year
and corrective advertising costs.
The court found that Quidel had sufficiently pled falsity
and misleadingness to satisfy Rule 9(b) for its Lanham Act and California state
law false advertising claims, as well as with intentional interference with
economic advantage.  Likewise with
materiality for false advertising: given the alleged cost and time differences,
it is reasonable to infer that an equivalence claim would influence purchasing
decisions.  Siemens argued that
materiality was inadequately pled because labs are sophisticated parties and
are required to independently verify an assay’s performance data, but that’s a
matter of reliance at most, not materiality.

Siemens argued that the FDCA precluded the Lanham Act claim
because the FDA pre-approved Defendants’ product name and performance data and
required Siemens to include that information on the IMMULITE label and
packaging insert. Moreover, Siemens couldn’t IMMULITE’s name or alter its
specificity and sensitivity data without prior FDA approval.  Under Pom
, this argument failed. It’s still true that “a private action
brought under the Lanham Act may not be pursued when…the claim would require
litigation of [an] alleged underlying FDCA violation in a circumstance where
the FDA has not itself concluded that there was a violation.”  However, the claim here didn’t implicate FDA
determination of whether the premarket approval was ok.  Quidel didn’t challenge the product name and
performance data in the labeling, but rather the marketing statements (including
the use of specificity to distinguish IMMULITE from TRAb assays).  Thus, the court’s evaluation of Siemens’
similarity claims/failure to disclose the similarity of IMMULITE to TRAb assays
wouldn’t intrude on FDA’s exclusive enforcement authority.  Likewise, it would not be impossible to
comply both with the FDCA and state false advertising law.  “Removing the phrase ‘TSI only’ from
Defendants’ marketing materials or adding a disclaimer that IMMULITE does not
differentiate between stimulating and blocking antibodies does not reasonably
lead to Defendants being forced to change their assay’s name or performance
data such that Defendants would first need FDA approval.”

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