Serving two masters: US pharmaceutical marketing under FDA and Lanham Act rules
Brett Heavner explains the two governing regimes in the United States that pharmaceutical marketers must be aware of – the FDA and the Lanham Act. While the two regimes are not designed to work with each other, it’s vital for pharma to make sure their products are accurately supported in line with both.
Direct-to-consumer advertising has become a critical part of pharmaceutical marketing strategies since the FDA first allowed it in 1997. As a result, pharmaceutical advertising faces increasing scrutiny both from government authorities and from competitors. Unfortunately, under U.S. law, pharmaceutical marketing is governed by two separate legal regimes that are not designed to work together. Specifically, all pharmaceutical labeling and advertising text must comply with both the U.S. Food and Drug Administration (FDA) regulations, and the provisions of the Lanham Act (which generally governs false advertising for all products).
While both regimes purportedly aim to combat misleading advertising, the definition of what is “misleading” under the two regimes may be different. Consequently, in some cases, the two regimes can provide different conclusions as to what advertising is acceptable, and in fact the FDA rules may even insulate an allegedly “misleading” advertisement from objection by a competitor. Consequently, it is vitally important that pharmaceutical companies consider both the FDA and Lanham Act rules in planning and carrying out their marketing strategies.
I. The interplay of the two statutes
The Food, Drug, and Cosmetic Act (FDCA), broadly forbids pharmaceutical “labeling” that is “false or misleading in any particular,” and forbids “misleading” pharmaceutical containers1. Similarly, pharmaceutical “advertising” must present specific information about the product (such as its formulation, indications, contra-indications, effectiveness, and side effects) in a “clear, conspicuous, and neutral manner”2.
“…under U.S. law, pharmaceutical marketing is governed by two separate legal regimes that are not designed to work together.”
The FDA enforces these broad requirements by requiring pre-approval of pharmaceutical labels, requiring pre-approval of selected television advertising, and allowing for voluntary submission and approval of other types of “advertising”3-5. The FDA regulations are entirely administrative, and there is no private right of action for competitors to challenge the FDA’s review of a pharmaceutical product’s labeling and advertising.
In contrast, the Lanham Act is specifically designed for a private right of action so that an aggrieved party may sue a competitor for any false or misleading description or representation of fact which:
“…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.6”
Thus, while the FDA’s concerns tend to focus on statements or omissions about formulations, indications, contra-indications, effectiveness, and side effects, the Lanham Act is much broader and covers any sort of material false or misleading statements about the pharmaceutical products. Thus, Lanham Act false advertising jurisdiction overlaps with, but is not identical to, the FDA’s false advertising regulation.
While U.S. courts strive to give legal effect to both the FDCA and the Lanham Act, they generally agree that the FDA regulations and approvals pre-empt Lanham Act claims under certain circumstances. Specifically, a plaintiff may not use the Lanham Act as a vehicle to privately enforce the FDCA or its regulations, nor may a plaintiff invoke the Lanham Act to usurp the FDA’s authority to interpret the FDCA7. On the other hand, the mere fact that a statement appears on a pharmaceutical label that has been reviewed by the FDA does not automatically insulate the pharmaceutical manufacturer from liability if that statement is false or misleading8. Specifically, U.S. courts have taken the position that a competitor may only pursue a Lanham Act claim if (1) the subject claims are literally false or misleading to the public, (2) the claim is not based on a naming / labeling violation of the FDA regulations, and (3) the claim does not require interpretation of FDA regulations.
“…a plaintiff may not use the Lanham Act as a vehicle to privately enforce the FDCA or its regulations…”
II. Two case studies
Two recent cases provide excellent examples of how the interplay between FDA regulations and the Lanham Act can effect litigation. In the first case, Merck Eprova AG, the maker of METAFOLIN folate vitamin supplements, sued Gnosis S.p.A., the maker of a competing folate vitamin supplement, under the Lanham Act for false advertising based on Gnosis’s listing of one active chemical as the source of its folate, when in fact the Gnosis product’s folate source was an entirely different inactive chemical. Gnosis argued that the false advertising claim was pre-empted, because the labeling was governed by FDA regulations and the FDA had never objected to the labels. Merck Eprova, on the other hand, argued that the meaning of the labels was straightforward and the court did not require guidance from the FDA’s expertise, or an interpretation of the exact specifications of FDA regulations, to evaluate whether the folate claim on the Gnosis label was true or false. The court agreed with Merck Eprova, finding that it could evaluate the truthfulness of Gnosis’s labels based solely on “accepted standards in the scientific and dietary supplement community”. Accordingly, the court allowed Merck Eprova to pursue its Lanham Act false advertising claim9. On September 30, 2012, after a full trial, the court found that the Gnosis labels were indeed literally false and ruled in favor of Merck Eprova. The court permanently enjoined Gnosis from falsely stating the incorrect source of its folate in its labels, ordered Gnosis to issue corrective adverting regarding the folate source, awarded Merck Eprova damages equal to three times Gnosis’s profits on the falsely labeled product, and ordered Gnosis to pay Merck Eprova’s attorneys fees10.
Another recent case had the opposite result on the pre-emption issue. Pom Wonderful LLC, the manufacturer of pomegranate juice beverages sued the Coca Cola Company, a competing juice maker, under the Lanham Act on the ground that Coca Cola’s product labeled “Pomegranate Blueberry” was misleading because it contained about 99.4% apple juice and only 0.3% pomegranate juice11. Pom Wonderful’s false advertising claim seemed promising because it was consistent with other Lanham Act cases in which a product name or label was found to be misleading when it suggested an ingredient or component that was in fact absent or only present in trace amounts12.
“…FDA regulations allow a juice maker to name the flavoring juice, even if it is not the predominant juice in the beverage by volume.”
Coca Cola, however, sought to have the Lanham Act claim dismissed on the ground that the claim required the court to challenge the FDA’s regulations governing beverage labels. Specifically, Coca Cola argued that the FDA regulations specifically allow manufacturers of multiple juice beverages to “identify their juices with a non-primary characteristic juice”. That is, FDA regulations allow a juice maker to name the flavoring juice, even if it is not the predominant juice in the beverage by volume. The court agreed with Coca-Cola, holding that the only way Pom Wonderful could prevail on the Lanham Act claim was to undermine the FDA’s specific determination that the “Pomegranate Blueberry” label was permissible. Therefore the Lanham Act false advertising claim was preempted by the FDA regulations13.
Pharmaceutical manufacturers need to be aware of both FDA regulations and Lanham Act false advertising when preparing their marketing strategies. Satisfying the FDA’s requirements with respect to formulations, indications, contra-indications, effectiveness, and side effects is an important step toward avoiding false advertising problems in the United States. However, the mere fact that the FDA does not raise an objection to a given label or advertisement does not preclude a competitor from raising a Lanham Act claim if the claim would not call into question any prior specific FDA determination or regulation. A statement that does not draw FDA attention may nevertheless be the basis for substantial liability. Pharmaceutical manufacturers should carefully review all statements in their U.S. marketing materials to ensure that they not only meet applicable FDA rules, but that they are otherwise clear, accurate, and adequately supported.
1. Federal Food, Drug, and Cosmetic Act 21 U.S.C. § 352(a),(i).
2. 21 U.S.C. § 352(a). See also 21 C.F.R. § 202.1 et seq.
3. 21 U.S.C. § 355(b)(1)(F)
4. 21 U.S.C. § 353(b)
5. 21 C.F.R. §202.1(j)(4)
6. 25 U.S.C. § 1125(a)(1)(B)
7. E.g., Pom Wonderful LLC v. Coca-Cola Co., 679 F. 3d 1170, 1175-76 (9th Cir. 2012), Merck Eprova AG v. Brookstone Pharm. LLC, No. 09 Civ. 9684 (RJS), 2011 WL 1142989 at *3 (S.D.N.Y. March 17, 2011).
8. Sandoz Pharm. Corp. v. Richardson-Vicks, Inc., 902 F.2d 222, 231 (3d Cir. 1990).
9. Merck Eprova AG v. Gnosis S.p.A., No. 07 Civ. 5898 (RJS), 2011 U.S. Dist. Lexis 30683 *18-19 (S.D.N.Y. March 17, 2011).
10. Merck Eprova AG v. Gnosis S.p.A., No. 07 Civ. 5898 (RJS), Opinion (S.D.N.Y. September 30, 2012).
11. Pom Wonderful LLC v. The Coca Cola Company, 679 F.3d 1170 (9th Cir. 2012)
12. E.g., Johnson &, Johnson v. GAC Int’l, Inc., 862 F.2d 975 (2d Cir. 1988) (defendant’s POLYSAPHIRE label for was deemed false since the product did not contain actual aluminum oxide crystal sapphires, but instead grains aluminum oxide), Abbott Laboratories v. Mead Johnson &, Co., 971 F.2d 6 (7th Cir. 1992) (defendant’s RICELYTE label is false since product did not contain actual rice, but instead contained rice syrup solids).
13. Id. at 1177-78.
About the author:
B. Brett Heavner is a partner at Finnegan, Henderson, Farabow, Garrett &, Dunner, LLP. Mr. Heavner has a diverse practice that includes all aspects of trademark and unfair competition law, with a particular emphasis on trademark infringement, counterfeiting, and false advertising litigation. His range of clients includes pharmaceutical companies, medical device manufacturers, banking and financial services institutions, major trade associations, food product companies, petroleum exploration and refining companies, and certification / quality testing organizations.
Mr. Heavner can be reached at 202.408.4073 or email@example.com.
How can pharma marketers stay on top of both FDA regulations and Lanham Act false advertising?