Two federal courts recently addressed jurisdictional issues in the context of Food and Drug Administration ("FDA")-related advertising claims. The first court held that the advertising claims were not within the FDA’s exclusive jurisdiction; the second court held that the FDA did have exclusive jurisdiction over the claims at issue and thus plaintiff lacked standing. Although the two decisions are not necessarily contradictory, these decisions illustrate the importance of taking into account jurisdictional issues when addressing advertising claims related to pharmaceuticals and medical devices.
In the first decision, a District of Minnesota court held that advertisements claiming that defendants’ pharmaceutical products were "generic equivalents," "substitutes," and "alternatives" for plaintiff’s products were not exclusively within the FDA’s jurisdiction under the Food, Drug, and Cosmetic Act ("FDCA"), and could be the subject of a Lanham Act false advertising claim in federal court. See Axcan Scandipharm Inc. v. Ethex Corp., No. 07-2556 (RHK/JSM), 2007 U.S. Dist. LEXIS 77876 (D. Minn. Oct. 19, 2007).
Plaintiff and defendants manufacture and market pancreatic-enzyme-supplement drugs, with defendants selling supposedly generic versions of plaintiff’s drug. Plaintiff alleged that defendants’ "generic equivalent" and other advertising claims were false because defendants’ products include different formulations and unequal amounts of particular pancreatic enzymes. Defendants filed a motion to dismiss, arguing that the FDA had exclusive jurisdiction over this issue and that the federal court did not have subject matter jurisdiction.
The court rejected defendants’ argument, holding that "false statements are actionable under the Lanham Act, even if their truth may be generally within the purview of the FDA," and that while "the FDA’s enforcement of the FDCA is primarily concerned with the safety and efficacy of new drugs, . . . the Lanham Act is focused on the truth or falsity of advertising claims." See id. at *12-13 (internal quotes omitted). According to the court, defendants had misconstrued plaintiff’s claim to be that defendants were improperly representing their drugs as "equivalent to" and "substitutes for" plaintiff’s drugs in the FDA’s sense of that term, i.e., that defendants’ products are pharmaceutically equivalent and bioequivalent to plaintiff’s drug. According to defendants, only the FDA could determine whether defendants’ drugs are equivalent and substitutes in that sense.
But according to the court, plaintiff had not alleged that defendants had falsely implied that defendants’ drugs are "equivalent" and "substitutes" in this FDA sense, but rather as based on "the proper market definitions" and "generally understood meanings" of these terms. See id. at *15. The court held that such an allegation in no way infringes upon the FDA’s exclusive right to determine whether two drugs are "equivalent" based on the FDA’s own definition, and that "the claims do not concern the safety and efficacy of the Defendants’ drugs, but rather the truth or falsity of their advertising claims." See id. at *15-16 (internal quotes omitted). Accordingly, defendants’ motion to dismiss based upon a lack of subject matter jurisdiction was denied.
In the second decision, a Southern District of California court granted defendants’ motion for summary judgment and held that plaintiff’s Lanham Act false advertising claim was within the exclusive jurisdiction of the FDA, and that plaintiff did not have standing for this claim. See Photomedex, Inc. v. RA Med. Sys., Inc., No. 04-CV- 24 (JLS) (CAB), 2007 U.S. Dist. LEXIS 79846 (S.D.Cal. Oct. 29, 2007).
Plaintiff claimed that defendants had falsely advertised that defendants’ medical device was "FDA Approved" when in fact it was only defendants’ "vastly different" predecessor product that had been approved. The court began its analysis by explaining that that there is no private right of action for violations of the FDCA, and that "fraud on the FDA" claims are pre-empted by the FDCA. However, the court also conceded that "some courts have acknowledged that a plaintiff could present a Lanham Act claim if the allegations involved an affirmative misrepresentation of a fact, such as stating that a product was FDA approved when it was not. Those courts have been willing to hear such claims because that determination would not require the court to interpret the application of FDA regulations." See id. at *6-7 (internal cite omitted).
The court held that
[i]n this action, Plaintiff attempts to persuade this Court that its "fraud on the FDA" claim fits within this narrow opening. Plaintiff argues its claims should not be dismissed because it is alleging that Defendants represented [Defendants’ product] was FDA approved when it allegedly was not. This Court disagrees with Plaintiff’s characterization of its claim. . . . Plaintiff’s actual argument before this Court, as shown by its experts’ declarations, relates to whether the design changes made by Defendants to [Defendants’ FDA-approved product] required Defendants to file additional documents with the FDA to obtain further FDA pre-market clearance. This is far different than the question of whether Defendants affirmatively misrepresented that the laser was FDA approved when it was not. It is the former that requires the FDA’s scientific expertise and application of FDA regulations, and therefore, it is the former that is a question lying outside of this Court’s jurisdiction.
See id. at *7-9 (emphasis in original)
These two recent decisions regarding jurisdiction and the interplay of the FDA and the Lanham Act are notable, particularly for those who deal with the FDA, the FDCA, and advertising claims on a regular basis. As these decisions illustrate, it is important that not only should the advertising claims themselves be carefully evaluated in the pharmaceutical and medical device context, but jurisdictional issues should also be closely analyzed.
