United States: Beginning To Close The POM Circle? – "POM Wonderful" And Drug Advertising: "JHP Pharmaceuticals"

Earlier this year, in POM Wonderful LLC v. Coca-Cola Co.,1 the Supreme Court examined the interaction between the Lanham Act's prohibition against false advertising and the FDCA's prohibition against food, drug and cosmetics labeling that is "false or misleading." In POM Wonderful, POM alleged that Coca-Cola's labeling and marketing of its "Pomegranate Blueberry" juice was false and misleading. Coca-Cola sought dismissal of POM's Lanhan Act and state law claims on the grounds that because its labeling complied with the requirement of the Food, Drug and Cosmetics Act (FDCA), POM's claims were precluded. The Supreme Court disagreed, holding that the FDCA and Lanham Act were complementary statutory schemes and allowed competitor advertising claims under the Lanham Act that challenge food and beverage labeling regulated under the FDCA.

POM Wonderful was directed at the FDCA regulatory regime covering food and beverage products, leaving open the question of whether, and if so, the extent to which Lanham Act challenges to drug labeling and advertising regulated under the FDCA also were subject to POM Wonderful. Notably, the Supreme Court's decision differentiated food and drug labeling, which is not subject to an FDA pre-approval process, and drug labeling, the content of which is typically pre-approved by the FDA, indicating the potentiality of different treatment.

Background

In a recent decision, JHP Pharmaceuticals LLC v. Hospira, Inc.,2 Par Sterile Products (formerly JHP Pharmaceuticals), a manufacturer of ADRENALIN, an FDA-approved injectable epinephrine product, brought Lanham Act claims against several defendants, American Regent Inc., Hospira Inc. and International Medical Systems, Ltd. (IMS) alleging that the defendants falsely advertised their "generic" injectable epinephrine products. It was undisputed that none of the defendants' epinephrine products had been approved for sale by the FDA.

Par asserted four violations of the Lanham Act, namely that defendants falsely represented to consumers: 1) that their products were FDA approved; 2) that their products were "safe" and "effective;" 3) that their products were being marketed in full compliance with all laws; and 4) that Par's product was more dangerous because defendants failed to disclose adverse reaction and other information that Par's labeling must contain. Defendants moved to dismiss Par's Lanham Act claims asserting that the claims were precluded by the FDCA. The resolution of Defendants' initial motions were stayed until after POM Wonderful was decided. After the Supreme Court issued its decision, defendants renewed their motions to dismiss.

The Decision

The district court dismissed Par's claims alleging that defendants misrepresented the "safety and efficacy" of their products, and the claim alleging that defendants' labeling and packaging implied that defendants' products were safer than Par's on the grounds that Par's complaint lacked sufficient factual support to state a claim.

With respect to the surviving clams, the court began its analysis by addressing the effect of the POM Wonderful holding on the preclusion of Lanham Act claims challenging FDCA-regulated drug labeling and advertising. The district courted reiterated the Supreme Court decision that the Lanham Act and the FDCA are discrete regulatory schemes, with neither statute precluding claims made under the other.3 The district court explained that POM Wonderful created a strong presumption that Lanham Act claims are not barred by the FDCA.4

Although the court acknowledged that the references to "food and beverage" in POM Wonderful "suggests a difference between food labeling, which is not subject to FDA preapproval, and drug labeling, which is," the district court explained that "[t]he logical building blocks of the Court's specific holding with regard to food and beverage labeling would seem equally applicable to food and beverage advertising, drug marketing, medical device labeling, cosmetics branding or any other kind of marketing or representation which would fall under both the Lanham Act and the FDCA unless preclusion is required for some specific reason."5

However, the broad reach of POM Wonderful embraced by the district court was not without reservation. The court noted that the Supreme Court envisioned some Lanham Act claims might be subject to preclusion. For example, "the court might find a Lanham Act claim precluded by the FDCA where it turns on the content of a drug label, especially if that drug label were preapproved by the FDA."6

So, while the district court recognized that POM Wonderful envisioned a broad presumption in favor of Lanham Act claims, in the context of FDA-regulated activity, affirmative regulatory action by the FDA over the specifically challenged activity may preclude a Lanham Act claim.

Against this backdrop, the district court turned to plaintiff's surviving allegations. With respect to defendants' alleged misrepresentations of FDA approval, the court found no preclusion. It explained that falsely representing FDA approval may confer a competitive disadvantage upon the approved drug. Thus, false representations of approval "undermine the Lanham Act's public policy goals both by confusing consumers and by enabling unfair competition by producers who do have not bothered to get FDA approval."7

With respect to Par's claim that the defendants misrepresented the legality of their products, the court explained that the evaluation of this claim "directly implicates the FDA's rulemaking authority," and required the expertise of the FDA to resolve.8 The court noted that "[t]he determination of whether a drug is 'new,' and whether it can be lawfully marketed under the FDCA, involves complex issues of history, public safety and administrative priorities that Congress has delegated exclusively to the FDA."9 Unlike Par's allegations of alleged misrepresentations of FDA approval, its allegations based on stations of "legality" would be precluded in the absence of prior review by the FDA.

However, the district court emphasized that its holding did not categorically preclude Lanham Act claims alleging illegality under the FDCA. Instead, it explained that Par could pursue such a claim if it first received a clear determination that the challenged products were being marketed illegally, relieving the court from having to decide the alleged FDCA violation.

Conclusion

The JHP Pharmaceuticals decision is the first judicial decision to apply POM Wonderful to Lanham Act challenges to drug labeling and advertising. While the misrepresentation of FDA approval presents a relatively straightforward analysis, further expansion of POM Wonderful will likely be more complicated.

For example, in Apotex Inc. v. Acorda Therapeutics, Inc., a recent decision that did not involve POM Wonderful, the district court noted: "In the context of prescription drugs, courts have generally rejected Lanham Act claims based on advertising that merely repeat labeling information that has been approved the FDA."10 This labeling situation is analogous to that addressed in POM Wonderful and it will be interesting to see how courts deal with the drug labeling side of the equation.

Footnotes

[1] 134 S. Ct. 2228 (2014)

[2] ___ F. Supp. 3d ____, 2014 WL 4988016 (C.D. Cal., Oct. 7, 2014)

[3] Id. at *3

[4] Id. at *4

[5] Id. at *5

[6] Id. at *3

[7] Id. at *5. The district court rejected defendants' attempt to invoke the primary jurisdiction doctrine noting that there was no special expertise necessary to determine whether or not the FDA has approved a particular drug.

[8] Id. at *9

[9] Id.

[10] Apotex Inc. and Apotex Corp. v. Acorda Therapeutics, Inc., No. 11 Civ. 8803(AT) (S.D.N.Y., Oct. 23, 2014) (citing cases).

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