The US Court of Appeals for the First Circuit affirmed-in-part and vacated-in-part a district court ruling dismissing claims under the Lanham Act and Massachusetts consumer protection law based on statements on a website regarding compliance with the Food, Drug, and Cosmetic Act (FDCA). Azurity Pharmaceuticals, Inc. v. Edge Pharma, LLC, Case No. 21-1492 (1st Cir. Aug. 12, 2022) (Barron, Howard, Thompson, JJ.)
Azurity is a specialty pharmaceutical company that markets a hydrochloride vancomycin drug that received pre-market approval from the US Food & Drug Administration (FDA). Edge Pharma is a drug compounding company that also markets a hydrochloride vancomycin drug that competes with Azurity’s drug but has not yet received FDA approval. In 2020, Azurity filed suit against Edge in the US District Court for the District of Massachusetts under both the Lanham Act and a Massachusetts consumer protection law based on statements that Edge allegedly made on its website. Azurity argued that these statements represented or conveyed the impression that Edge was not in violation of Section 503B of the FDCA, which authorizes drug compounders that meet certain conditions to market their drugs without first obtaining FDA approval. Azurity alleged that these statements were literally false and/or misleading and that other statements holding out Edge’s drug as superior to Azurity’s were similarly false and/or misleading. Edge moved to dismiss Azurity’s claims for failure to state a claim on which relief could be granted.
The district court granted Edge’s motion as to Azurity’s Lanham Act claim on the ground that the FDCA precluded Azurity’s claim. The district court stated that the claim would require it to interpret the meaning of Section 503B in a way that would interfere with the FDA’s authority to administer and enforce the FDCA. The district court also ruled that Azurity’s consumer protection claim failed because it was premised on the same allegations as Azurity’s Lanham Act claim. Azurity appealed.
The FDCA requires FDA pre-approval to market any drug. However, there are exemptions for “compounded” drugs and “outsourcing facilities” that manufacture compounded drugs. The FDCA provides registration and compliance requirements to be considered an “outsourcing facility.”
Edge made several statements on its website regarding alleged FDCA compliance, FDCA registration and other commercially available options for its compounded drug. The First Circuit referred to these as compliance statements, registration statements and superiority statements, respectively. With respect to Edge’s compliance and registration statements, the Court did not find that the FDCA precluded Azurity’s claims and instead adopted the framework used by the Ninth and District of Columbia Circuits. The First Circuit noted that those circuits established 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,” and thus, as such, are “not generally actionable under the Lanham Act.” The Court found that Azurity’s reliance on a non-binding FDA guidance document regarding “essentially a copy” provision of Section 503B was not a [...]