Wisconsin Court Adds to Precedent Holding that the FDC Act Cannot Be Privately Enforced

On February 29, 2008, Judge Stadtmueller of the United States District Court for the Eastern District of Wisconsin dismissed a lawsuit brought by Schering-Plough Healthcare Products, Inc. (“Schering”) against three manufacturers of prescription polyethylene glycol 3350 (“PEG”), a laxative drug product.  In its lawsuit, Schering sought to use the Lanham Act, 15 U.S.C. § 1125, (along with state law claims) to privately enforce the Federal Food, Drug, and Cosmetic Act (“FDC Act”).  The court, following the reasoning of many other courts, held that Schering could not do so and dismissed the case.  Hyman, Phelps & McNamara, P.C., represented one of the defendants in the case. 

In October 2006, FDA approved Schering’s New Drug Application (“NDA”) (#22-015) to switch the company’s PEG product, MIRALAX, from prescription to Over-the-Counter (“OTC”) use – a so-called “Rx-to-OTC switch.”  MIRALAX was first approved in February 1999 under NDA #20-698 for prescription use only.  Schering began marketing OTC MIRALAX in early 2007.  Schering received 3 years of market exclusivity for the Rx-to-OTC switch. 

Prior to Schering’s switch, FDA had approved three Abbreviated New Drug Applications (“ANDAs”) for prescription PEG drug products.  Those three manufacturers had used prescription MIRALAX as their reference listed drug (“RLD”) in their ANDA submissions.

Following FDA’s approval of Schering’s OTC switch NDA, an Agency employee sent letters to the three generic manufacturers of prescription PEG products expressing the views that: (1) the FDC Act prohibits simultaneous prescription and OTC marketing of the same drug; and (2) the generic manufacturers’ prescription products were misbranded because they were labeled as “Rx only.”  FDA did not attempt to withdraw ANDA approval, however.

Schering brought suit alleging that the labeling of the generic prescription PEG products was false and misleading under the Lanham Act and Wisconsin law because the products’ labeling contained the statements “prescription only” and “Rx only.”   Schering sought partial summary judgment as to liability under the theory that the generic manufacturers’ prescription labeling was “literally false,” a claim, that if proven, establishes liability under the Lanham Act, even in the absence of a showing of consumer confusion.  The defendants opposed Schering’s motion for partial summary judgment, arguing that their labeling was not false, but in fact true and required by FDA, and that the terms “prescription only” and “Rx only” referred to each of their own products, and not to all PEG products.  The court found the defendants’ arguments persuasive and denied Schering’s motion for partial summary judgment.

Additionally, the defendants sought dismissal of Schering’s complaint on the grounds that it constituted an attempt to privately enforce the FDC Act in an area where FDA had not definitively interpreted the law.  The court agreed with the defendants, and dismissed the complaint.  In so deciding, the court rejected Schering’s argument that FDA opined on the defendants’ labeling because FDA employees had sent letters to the defendants.  Following established precedent, and FDA’s own regulations, the court reasoned that the letters did not constitute an official FDA determination.

By James P. Ellison