Pacira BioSciences, Inc. v. Ventis Pharma, Inc., 2025 WL
576549, No. 2:24-cv-07554-MRA-RAO, (C.D. Cal. Jan. 17, 2025)
Pacira alleged that its competitor (here Ventis) violated
the Lanham Act by making claims about its drugs relating to (1) exemption from
FDA approval, (2) FDA approval, and (3) comparative superiority, safety, and
efficacy.
The FDA doesn’t require preapproval of drugs compounded by
registered “outsourcing facilities, aka the “503B exemption.” The exemption
requires that the “bulk drug substances” in the compounded drug must be on the
FDA’s Drug Shortage List or Clinical Need List.
Pacira makes EXPAREL, an FDA-approved injectable drug
product used to manage and reduce post-surgical pain whose active ingredient is
bupivacaine. Pacira allegedly uses a a proprietary multivesicular liposome (pMVL)
technology and created a new category of drugs known as the “Post-Surgical
Non-Opioid Regional Analgesia,” in which EXPAREL is the leading product.
Ventis makes, inter alia, Enduracaine and Endura-KT, which
consist of three bulk drug substances: (1) epinephrine, (2) tetracaine, and (3)
lidocaine. Enduracaine and Endura-KT have not been approved by the FDA. Below
the header “FDA Disclaimer,” Ventis’ website states that under the FDCA, human
drug products compounded by an outsourcing facility “are exempt from the
following three sections of the [FDCA] section 505 (21 U.S.C. 355).” In an
advertisement in Anesthesiology News, Ventis claimed that Endura-KT is
“produced following cGMP manufacturing guidelines under 503B outsourcing
standards overseen by the FDA.” However, none of the three component bulk drug
substances are on the CNL. Lidocaine and epinephrine are on the DSL, but not tetracaine,
and it is not approved for use as an injection.
Ventis also allegedly implied FDA approval, as in a white
paper on its website describing Endura-KT as an “off-label use version of
Enduracaine.” “Off-label use” is allegedly generally recognized as the use of
an FDA-approved product for an unapproved use. Ventis advertised in
Anesthesiology News that Endura-KT is “made from a combination of currently FDA
approved USP products.” But the FDA allegedly does not oversee production of
Endura-KT, and it has not approved the use of bulk drug substances as combined
in Endura-KT.
Ventis also advertised Enduracaine and Endura-KT as
comparable to, and replacements for, EXPAREL. It marketed Endura-KT as “safe
and acceptable for use,” advertised that Endura-KT provides an “EXTENDED
DURATION” of pain relief and that it is “Quick Onset – Long Lasting,” “Safe,”
for “Pediatric Use,” and “Cost Effective.” It advertised that Endura-KT is
“clinically significant over other commercially available products.” But Endura-KT
has allegedly not been reviewed, been approved, or undergone any clinical
trials to confirm its capabilities, efficacy, or safety.
Exemption-based statements: The court rejected defendant’s
preclusion argument under Pom Wonderful. Although the Ninth Circuit
previously did not allow Lanham Act claims that required significant
interpretation of the FDCA, the court here relied more heavily on the general
statements in Pom Wonderful (and it’s hard not to imagine that the
recent rejection of agency interpretive authority in Loper Bright is
having an effect here too). Pom Wonderful characterized the FDCA as
“designed primarily to protect the health and safety of the public at large” rather
than to prevent false advertising. The
mere fact that “an agency enacted regulations that touch on similar subject
matter but do not purport to displace [a] remedy [under the Lanham Act] or even
implement the statute that is its source” cannot displace such a
“well-established federal remedy.” That is because “[a]n agency may not reorder
federal statutory rights without congressional authorization.” (Note that the
issue here is not just regulations “touching on” similar subject matter, but
actually defining that which is legal to produce and market.)
Anyway, as a result, “courts have adopted a general
presumption that Lanham Act claims pertaining to FDCA-regulated products are
permissible and, often, desirable.” The Ninth Circuit’s decision in PhotoMedex,
Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010), the court reasoned, did not
clearly survive, so it wasn’t necessarily enough for preclusion that “the claim
would require litigation of the alleged underlying FDCA violation in a
circumstance where the FDA has not itself concluded that there was such a
violation.” Regardless, even PhotoMedex said that it didn’t mean that
“the Lanham Act can never support private party claims involving FDA approval
or clearance of drugs or medical devices.” The Ninth Circuit said that, where
an affirmative statement of FDA approval was required to market a product, “a
Lanham Act claim could be pursued for injuries suffered by a competitor as a
result of a false assertion that approval had been granted.”
Defendant argued that FDA policy allows for the compounding
of tetracaine, and thus that allowing this claim to proceed would “clearly
interfere” with the FDA’s policy judgment in that regard. It pointed to the
FDA’s 2017 “Interim Policy on Compounding Using Bulk Drug Substances Under
Section 503(b) of the [FDCA].” As to categories of drugs nominated for
inclusion on the CNL, the FDA stated that “at this time [the] FDA does not
intend to take action against an outsourcing facility for compounding a drug
using a bulk drug substance that does not appear on the [CNL] and that is not
used to compound a drug that appears on the [DSL] at the time of compounding,
distribution, and dispensing,” provided certain conditions are met.
But that wasn’t enough. An FDA policy of non-enforcement was
not equivalent to a finding that the compounding was “exempt.” “Under the plain
terms of section 503B, the compounded bulk drug substance must appear on the
CNL or DSL to qualify for exemption.” Indeed, the interim guidance “would seem
to tacitly acknowledge that the compounding of a Category 1 substance does not
yet satisfy the requirements for 503B exemption, only that the agency does not
presently consider such conduct an enforcement priority.” And nonenforcement of
the FDCA wasn’t relevant, given that the plaintiff “seeks to enforce the Lanham
Act, not the FDCA or its regulations.” “If anything, the FDA’s non-enforcement
cautions against preclusion of Plaintiff’s Lanham Act claim,” given the FDA’s
limited resources. The court pointed to Pom Wonderful’s similar
discussion of FDA nonenforcement:
Because the FDA acknowledges that
it does not necessarily pursue enforcement measures regarding all objectionable
labels, if Lanham Act claims were to be precluded then commercial interests—and
indirectly the public at large—could be left with less effective protection in
the food and beverage labeling realm than in many other, less regulated
industries. It is unlikely that Congress intended the FDCA’s protection of
health and safety to result in less policing of misleading food and beverage
labels than in competitive markets for other products.
“This reasoning applies with added importance in the context
of drug marketing.”
Plus, an FDA interim policy may “touch on similar subject
matter” as a Lanham Act claim, but it “do[es] not purport to displace that
remedy[.]” Nor is it even an “agency regulation[ ] with the force of law that
purport[s] to bar other legal remedies.” The Interim Policy clearly states,
“FDA’s guidance documents do not establish legally enforceable
responsibilities. Instead, guidances describe the Agency’s current thinking on
a topic and should be viewed only as recommendations.” Thus, this is not “a
case where a lawsuit is undermining an agency judgment.”
As the First Circuit said in Azurity Pharmaceuticals, Inc.
v. Edge Pharma, LLC, 45 F.4th 479 (1st Cir. 2022), involving similar
statements, “the parties have identified no FDA regulation that governs the
statements that outsourcing facilities may make in advertising—let alone a
regulation that would risk subjecting [the defendant] to inconsistent
obligations ….” Here, “[i]n claiming 503B exemption specifically, Ventis is
representing that it complies with the statutory requirements. Even under PhotoMedex,
determining the falsity of such statements does not ‘require litigation of the
alleged underlying FDCA violation.’”
Was the statement non-actionable opinion? The general rule is that, “[a]bsent a clear
and unambiguous ruling from a court or agency of competent jurisdiction,
statements by laypersons that purport to interpret the meaning of a statute or
regulation are opinion statements, and not statements of fact. Statements of
opinion are not generally actionable under the Lanham Act.” But that didn’t
make “exempt” a statement of opinion:
In advertising that its product is
exempt from FDA approval under section 503B, Defendant is not interpreting the
FDCA and related regulations. Given the unambiguous text of section 503B,
“there is no interpretation necessary to determine” the conditions for
establishing exemption under section 503B. Section 503B “plainly” provides that
the bulk drug substances in the compounded drug must appear on either the CNL
or DSL. By purportedly invoking 503B exemption, Defendant represents that it
has satisfied these criteria. Yet, as Azurity observed, “one of these
lists does not yet even exist, while there is no dispute that [Plaintiff] has
plausibly alleged that the other list does not include the bulk drug substance
in question.”
The FDA’s interim policy doesn’t purport to mean that section
503B “does not impose the condition that it plainly imposes with respect to the
use of ‘bulk drug substances.’ ” Anyway, the opinion versus fact distinction was
for a factfinder. (Both of these things can’t be true.)
Turning to allegedly approval-based statements, like “produced
following cGMP manufacturing guidelines under 503B outsourcing standards
overseen by the FDA,” “made from a combination of currently FDA approved USP
products,” and “off-label use version of Enduracaine,” defendant argued that
there was no false statement or implication of FDA approval.
Mylan Laboratories, Inc. v. Matkari, 7 F3d 1130 (4th Cir.
1993), rejected a theory that “the very act of placing a drug on the market,
with standard package inserts often used for FDA-approved drugs, somehow
implies (falsely) that the drug had been ‘properly approved by the FDA.’ ” Several
district courts have relied on Mylan to hold more broadly that “[f]alse
advertising claims based on allegations of implied governmental approval have
not been allowed, for ‘the law does not impute representations of government
approval … in the absence of explicit claims.’ ” Here, though, the court
found that plaintiff plausibly alleged that defendant’s description of
Endura-KT as an “off-label” use of Enduracaine falsely implied that Enduracaine
is FDA approved. It didn’t evaluate the other statements one way or another.
Comparison-based statements: Ventis allegedly falsely
advertised its products as “superior to liposomal bupivacaine products like
EXPAREL” and that its products are “equivalent or are otherwise substitutable.”
An infographic on the site purported to summarize the findings of two studies,
and stated in a footer that “[t]he preponderance of evidence fails to support
the routine use of liposomal over plain bupivacaine.”
Defendant argued that this was nonactionable scientific
opinion, under Pacira BioSciences, Inc. v. Am. Soc’y of Anesthesiologists,
Inc., 63 F.4th 240 (3d Cir. 2023), which held that the studies summarized in
the infographic were nonactionable opinion. But that conclusion didn’t insulate
the infographic. First, unconvincingly, the court said that the Third Circuit
was only dealing with trade libel, not Lanham Act claims. Second, the Third
Circuit relied the context in which the statements were made: “a peer-reviewed
journal for anesthesiology specialists.” But the infographic wasn’t an academic
article, and the footer statement wasn’t attributed to either study. In
publishing the infographic on its website, the defendant “los[t] the benefits
that scholarly articles and scientific debate typically enjoy.”
What about “EXTENDED DURATION,” “Quick Onset,” “Long
Lasting,” “Safe,” and “Cost Effective,” and “safe and acceptable for use”? Are
they fact or puffery? Finally, the defendant won an argument: these were
“generic adjectives without any specific, objectively verifiable measure.”
As to alleged comparative superiority/ “generic or
substitutable” statements, plaintiff didn’t specifically identify where and
when Ventis made those statements in advertising or promotion. A general
statement that “Medications can only be ordered by healthcare providers when it
is determined the product is clinically significant over other commercially
available product” wasn’t specific to either EXPAREL or Endura-KT, and thus
couldn’t form the basis of a claim.
from Blogger http://tushnet.blogspot.com/2025/02/fda-preclusion-doesnt-work-as-often.html
Rebecca Tushnet 