Federal Court Recognizes Lack of Private Enforcement of FDC Act, But Permits Private Lawsuit Seeking to Block Unapproved Drugs to Proceed Anyway

February 15, 2010

By Douglas B. Farquhar

A recent of a New Jersey federal court is bound to encourage some manufacturers of an FDA-approved version of a long-marketed drug to sue competitors that continue to market unapproved versions of the same drug.
Mutual Pharmaceutical Company, Inc. and two other companies brought a lawsuit after receiving FDA approval of their applications to market colchicine in July 2009.  Colchicine has been used for centuries to treat gout.  Mutual sought a preliminary injunction to block competitors marketing unapproved versions of the drug.  The motion for preliminary injunction was denied by the California federal court, where the case was filed, as discussed in our .  The California court then transferred the case to the court in New Jersey. 

In a decision issued February 8th, Judge Garrett E. Brown, Jr., of the U.S. District Court for the District of New Jersey, held that, although Mutual cannot sue competitors for marketing the drug in violation of the Federal Food, Drug, and Cosmetic Act (inasmuch as the FDC Act does not permit a private right of action), the Court could not determine, at this preliminary stage of the case, whether the unapproved marketers of the drug had engaged in marketing activities that effectively misrepresented the unapproved status of their drugs in violation of the federal Lanham Act.

The decision is unpublished (meaning that it will not be published in the Federal Reporter, where district court judges can decide to place decisions on matters they think should have precedential impact).  However, inasmuch as the judge issued a decision allowing the case to continue, it will likely boost the optimism of similarly situated marketers of approved drugs that lawsuits will at least harass competitors which have not yet received FDA approvals.

The Court's decision is at odds with numerous court rulings in Lanham Act cases which have ruled that plaintiffs have improperly used the Lanham Act as a vehicle to enforce the FDC Act.  For instance, in Schering-Plough Healthcare Products, Inc., v. Schwarz Pharma, Inc., 586 F.3d 500 (7th Cir., 2009), the Seventh Circuit affirmed the dismissal of a Lanham Act case, ruling that the lawsuit sought to usurp FDA's primary jurisdiction concerning the legality of labels that FDA had earlier approved.   Hyman, Phelps & McNamara, P.C. represented Schwarz Pharma, Inc. and Kremers Urban, LLC in that case.  Our firm is writing an article in the next edition of FDLI Update magazine about the interplay between the Lanham Act and the FDC Act.

Categories: Drug Development