California Court Denies Preliminary Injunction in Lanham Act Case Concerning Unapproved Colchicine DrugsOctober 21, 2009
By Kurt R. Karst –
Earlier this week, the U.S. District Court for the Central District of California a filed by Mutual Pharmaceutical Company, Inc. (“Mutual”), and AR Scientific, Inc. and AR Holding Company, Inc. (“AR”) in a Lanham Act case concerning the continued marketing of unapproved oral dosage form drug products containing colchicine. The court also declined to address a filed by the defendants in the case, deciding instead to grant a Motion to Transfer the case to the District of New Jersey for the convenience of the witnesses and parties.
Colchicine is a near-200 year-old drug FDA approved NDAs for in July 2009 for Mutual and AR (here and here) for the treatment of gout flares (NDA No. 22-351, for which FDA granted 3-year exclusivity) and for the treatment of Familial Mediterranean Fever (“FMF”) (NDA No. 22-352, for which FDA granted 7-year orphan drug exclusivity). The drug products, marketed under the trade name COLCRYS (colchicine) Tablets, were also approved earlier this week for the prevention of gout flares. In February 2008, FDA took enforcement action against companies marketing unapproved injectable colchicine drug products, but the Agency noted that its action was limited to the injectable dosage form of the drug – “FDA is not taking any orally administered colchicine products off the market at this time, whether approved or unapproved.”
The Mutual/AR colchicine case stems from two complaints ( and ) Mutual and AR filed in August 2009 (later consolidated) – just days after FDA approved COLCRYS Tablets – seeking an injunction against both suppliers of colchicine Active Pharmaceutical Ingredient used in unapproved single-entity colchicine prescription drug products and manufacturers and marketers of unapproved single-entity colchicine prescription drug products. Mutual and AR allege in their complaints that the defendants violated the Lanham Act § 43(a) (15 U.S.C. § 1125(a)) the California Business and Professions Code §§ 17200 and 17500, and California unfair competition and misappropriation common law in that they “unlawfully and unfairly advertised, marketed, promoted, distributed, and/or sold in competition with Plaintiffs’ colchicine product (COLCRYS™).” Specifically, Mutual and AR allege that the inclusion of the defendants’ colchicine drug products on various integrated drug dispensing databases and pricing services (“Price Lists”) and drug ordering systems confuses pharmacists into incorrectly believing that the defendants’ products are FDA-approved, and that the labeling for the defendants’ colchicine drug products falsely imply that they are FDA-approved and safer than COLCRYS Tablets. (Mutual and AR did not allege that the defendants made any literally false statements.)
The defendants in the case argued that the injunctive relief sought by Mutual and AR is within FDA’s primary jurisdiction, and that certain “consumer surveys relied upon by [Mutual and AR] to support their false advertising claims do not establish that Defendants have made any false statements and that Plaintiffs’ requested relief is barred by the doctrine of unclean hands.”
Under Lanham Act § 43(a), a party may be held liable for placing into interstate commerce a “false or misleading description of fact, or false or misleading representation of fact” that “in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities.” And to prevail on a false advertising claim under the Lanham Act, a plaintiff must meet six factors:
(1) the defendant made a false statement either about the plaintiff’s or its own product; (2) the statement was made in commercial advertisement or promotion; (3) the statement actually deceived or had the tendency to deceive a substantial segment of its audience; (4) the deception is material; (5) the defendant caused its false statement to enter interstate commerce; and (6) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to the defendant, or by a lessening of goodwill associated with the plaintiff’s product. [(Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829, 835 n.4 (9th Cir. 2002).)]
In support of their Motion for Preliminary Injunction, Mutual and AR primarily rely on a 2006 decision by the U.S. District Court for the Central District of California (Mutual Pharm. Co. v. Ivax Pharm., Inc., 459 F. Supp. 2d 925 (C.D. Cal. 2006) in which Mutual brought a similar Lanham Act action against companies marketing unapproved quinine sulfate after FDA approved Mutual’s QUALAQUIN (quinine sulfate) Capsules. In that case, the court granted (in part) the requested preliminary injunction, and in so doing, rejected the defendants’ primary FDA jurisdiction argument and found that Mutual had established the requisite probability of success on the merits:
Accordingly, the Court finds that the FDCA does not stand as a bar against Mutual litigating its false labeling claim. As this is the only argument raised by defendants as to why Mutual lacks a probability of success on this claim, the Court finds that Mutual has shown a likelihood of success as to its false advertising claim to the extent that claim is based upon defendants’ false representations contained on its product labels.
The court in Mutual’s colchicine Lanham Act case, however, expressed its reluctance to “view the Lanham Act’s false advertising provisions as broadly as did the Ivax court.” The court also stated that:
Defendants have not just relied on the primary jurisdiction doctrine. They also attack the merits of Plaintiffs’ false advertising claim, the sufficiency of the evidence presented by Plaintiffs, and the equities of enjoining Defendants from engaging in the very same behavior that Plaintiffs were also engaged in until days before they commenced this litigation. Even assuming that some portion of Defendants’ marketing activities are [sic] not within the primary jurisdiction of the FDA, this Court still concludes that Plaintiffs have not established a likelihood of success on the merits. . . .
Here, the survey evidence relied upon by Plaintiffs largely establishes only that pharmacists are confused about what the inclusion of a drug on a Price List or drug ordering system means concerning the FDA approval status of a particular drug. As a preliminary matter, the Court is not convinced that having drugs listed on a Price List or drug ordering system maintained by a third party even constitutes a “false statement” in “commercial advertising or promotion” to fall within the scope of the Lanham Act’s false advertising provisions. Moreover, there is little evidence that Defendants have in any way created the confusion experienced by pharmacists, or that this confusion is limited to colchicine products. Plaintiffs’ contentions concerning the product labels and inserts are even weaker, both because the evidence of confusion is weaker and because disputes concerning the content of those labels and inserts falls even more squarely within the primary jurisdiction of the FDA.
Although the case has been transferred to the District of New Jersey, it seems unlikely that a New Jersey court will disagree with the California court’s decision that the matter lies within FDA’s primary jurisdiction. Whether FDA plans to take enforcement action against companies manufacturing and marketing unapproved colchicine tablets drug products is unclear. FDA’s 2006 compliance policy guide provides the Agency’s enforcement priorities with respect to marketed unapproved drugs and states that one of the circumstances in which FDA may take enforcement action is when marketed unapproved drugs “present direct challenges to [the drug approval system], as do unapproved drugs that directly compete with an approved drug, such as when a company obtains approval of a [NDA] for a product that other companies are marketing without approval . . . .” Interestingly, in late 2006, FDA took enforcement action with respect to marketed unapproved quinine sulfate drug products shortly after the Ivax decision. FDA generally allows a grace period for the distribution of unapproved competitive products to secure approval of a marketing application before taking enforcement action, unless FDA perceives the unapproved drugs to pose a health risk.