ArentFox Schiff Uses Lanham Act Claim To Secure Victory for Azurity Pharmaceuticals

ArentFox Schiff secured an important victory for Azurity Pharmaceuticals, Inc. when the US Court of Appeals for the First Circuit found that the Food, Drug, and Cosmetic Act permits a pharmaceutical company to pursue false advertising claims against a compounding pharmacy, Edge Pharma, LLC.

A link to the decision is here.

Azurity, which markets a hydrochloride vancomycin drug that received pre-market approval from the US Food and Drug Administration, appealed to the First Circuit after a lower court found that Azurity’s false advertising claims under the Lanham Act would require the court to decide whether Edge Pharma violated the FDCA, which only the FDA can enforce. The appellate court disagreed, ruling that Edge Pharma’s website marketing touting its use of an unapproved “bulk drug substance” to compound its medication rested on a “clear” provision of the law that does not require FDA expertise to determine. 

The ArentFox Schiff team representing Azurity was led by Partner James Hulme and included Partner Valerie Samuels, Counsel Wayne Matelski, Associates Nadia Patel and Morgan Pankow, and Senior Legal Assistant, Jack Hitt. Azurity was represented internally by General Counsel Hanok George and Associate Counsel Shilpa Iyyer. 

Azurity alleges that Edge Pharma, which markets a compounded hydrochloride vancomycin drug that has not been given pre-market FDA approval, is in violation of the Lanham Act and a Massachusetts consumer protection law for making false and/or misleading statements about the drug on its website. More specifically, Azurity asserts that Edge has violated section 503B of the FDCA for failing to conform to the requirements in the “bulk drug substance” provision of that section, which prohibits the use of bulk drug substances in compounding where the bulk drug substance used does not appear on the FDA’s official list of “bulk drug substances for which there is a clinical need,” or on the operative drug shortage list. 

The First Circuit agreed with Azurity that its Lanham Act claim should not have been dismissed. This is the first federal appellate decision holding that the Lanham Act applies to false statements by a competitor concerning its compliance with the drug provisions of the FDCA. The FDCA does not permit private rights of action, so using the Lanham Act to address false advertising claims in the drug context is a key victory for pharmaceutical companies. The case will now proceed to a federal trial court.

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