“You Can’t Handle the Truth!” Code Orange: Court Dismisses Lanham Act-Orange Book Therapeutic Equivalence Rating Complaint on Primary Jurisdiction Grounds

By Kurt R. Karst –     

In the 1992 movie A Few Good Men, military lawyer Lt. Daniel Kaffee (played by Tom Cruise) handles the court martial of two U.S. Marines charged with the murder of a fellow Marine.  The Marines contend they were acting under orders – a “code red” that came down from Col. Nathan R. Jessup (played by Jack Nicholson), Commanding Officer Marine Ground Forces Guantanamo Bay, Cuba – when they disciplined their fellow Marine who died.  During the court martial, Lt. Kaffee faces off against prosecuting attorney Capt. Jack Ross (played by Kevin Bacon).  Though there are several memorable scenes from the movie, one scene in particular came to mind when we read a recent decision from the U.S. District Court for the District of New Jersey stemming from a Complaint Endo Pharmaceuticals, Inc. (“Endo”) filed last year against Actavis. Inc. and Actavis South Altantic LLC (collectively “Actavis”) alleging that Actavis violated the federal Lanham Act and the New Jersey Fair Trade and Consumer Fraud Acts by marketing its Oxymorphone HCl Extended-release Tablets drug products (approved under ANDA No. 079046) as “AB-rated” to Endo’s OPANA ER (oxymorphone HCl extended-release) Tablets drug products.  No, it’s not Col. Jessup’s famous “you can‘t handle the truth! ” scene that came to mind, though we did work that into the headline of this post.  It’s the scene where Capt. Ross questions Cpl. Jeffrey Barnes (played by Noah Wyle) about where the extrajudicial punishment “code red” is authorized in various Marine handbooks, and Lt. Kaffee’s cross-exam of Cpl. Barnes.  Here’s the script (you can view the video clip here):

Capt. Ross: Corporal Barnes, I hold here the Marine Outline for Recruit Training. You're familiar with this book?
Cpl. Barnes: Yes, sir.
Capt. Ross: Have you read it?
Cpl. Barnes: Yes, sir.
Capt. Ross: Good. Would you turn to the chapter that deals with code reds, please?
Cpl. Barnes: Sir?
Capt. Ross: Just flip to the page of the book that discusses code reds.
Cpl. Barnes: Well, well, you see, sir code red is a term that we use, I mean, just down at Gitmo, I don't know if it’s actually…
Capt. Ross: Ah, we're in luck then. Standard Operating Procedures, Rifle Security Company, Guantanamo Bay Cuba.  Now I assume we'll find the term code red and its definition in that book.  Am I correct?
Cpl. Barnes: No sir.
Capt. Ross: No?  Corporal Barnes, I'm a Marine.  Is there no book.  No manual or pamphlet, no set of orders or regulations that lets me know that, as a Marine, one of my duties is to perform code reds?
Cpl. Barnes: No sir.  No book, sir.
Capt. Ross: No further questions. [As Ross walks back to his table Lt. Kaffee takes the book out of his hand]
Lt. Kaffee: Corporal, would you turn to the page in this book that says where the mess hall is, please.
Cpl. Barnes: Well, Lt. Kaffee, that's not in the book, sir.
Lt. Kaffee: You mean to say in all your time at Gitmo you’ve never had a meal?
Cpl. Barnes: No, sir. Lt. Three squares a day, sir.
Lt. Kaffee: I don’t understand.  How did you know where the mess hall was if it’s not in this book?
Cpl. Barnes: Well, I guess I just followed the crowd at chow time, sir.
Lt. Kaffee: No more questions.

By way of background, the term “therapeutic equivalence” is not defined in the FDC Act or in FDA’s ANDA regulations.  The Orange Book Preface, however, states that “[d]rug products are considered to be therapeutic equivalents only if they are pharmaceutical equivalents and if they can be expected to have the same clinical effect and safety profile when administered to patients under the conditions specified in the labeling” (i.e., bioequivalent), and that “FDA believes that products classified as therapeutically equivalent can be substituted with the full expectation that the substituted product will produce the same clinical effect and safety profile as the prescribed product.” 

Pharmaceutically equivalent prescription drug products (i.e., multi-source drug products approved under FDC Act § 505) are identified in the Orange Book with either an “A” or “B” therapeutic equivalence code designation, generally, which is further defined by a one-character sub-code.  “A-rated” drug products are considered to be to therapeutically equivalent to other pharmaceutically equivalent products, because there are no known or suspected bioequivalence problems, or such problems have been resolved with adequate evidence supporting bioequivalence.  Drug products assigned an “A” rating fall under one of two categories: (1) those active ingredients or dosage forms for which no in vivo bioequivalence issue is known or suspected, and for which bioequivalence to the Reference Listed Drug (“RLD”) is presumed and considered self-evident based on other data in an application or by a showing that an acceptable in vitro dissolution standard is met; or (2) those active ingredients or dosage forms presenting a potential bioequivalence problem, but the applicant’s approved application contains adequate scientific evidence establishing (through in vivo and/or in vitro studies) the bioequivalence of the product to a selected RLD.  Drug products that fall under the first category are assigned a therapeutic equivalence code depending on the dosage form (e.g., “AA,” “AN,” “AO,” “AP,” or “AT”).   Drug products that fall under the second category are coded “AB.” 

OPANA ER is approved under two NDAs.  NDA No. 021610 covers an old formulation of OPANA ER and is no longer marketed.  It is listed in the “Discontinued Drug Product List” section of FDA’s Orange Book without a therapeutic equivalence rating, and is the NDA referenced in Actavis’s approved ANDA No. 079046.  Endo currently markets a crush-resistant version of OPANA ER approved under NDA No. 201655, for which there are currently no approved therapeutic equivalents, though ANDAs are pending.  As such, there is no therapeutic equivalence rating for the drug product in the Orange Book.  (For additional background on these products, see our previous posts here and here.)  

According to Endo’s Complaint:

Despite the fact that its Generic Oxymorphone ER Tablets are not crush-resistant and were not approved based on the current Opana® ER [NDA], Actavis is falsely marketing its Generic Oxymorphone ER Tablets as “AB Rated to Opana® ER” . . . .  Actavis’s Generic Oxymorphone ER Tablets are not and never have been AB rated to the only Opana® ER tablets sold by Endo since May 2012, i.e., the crush-resistant tablets, and those Generic Oxymorphone ER Tablets are not designed to be crush-resistant like Opana®ER.

Endo goes further in a Cross-Motion for Partial Summary Judgment, saying:

[T]he [Orange Book] listings for both the currently available Opana® ER CRF formulation and the discontinued original Opana® ER formulation state that “There are no Therapeutic Equivalents” . . . .  FDA removed the Actavis AB rating to the Discontinued Formulation of Opana® ER from the Orange Book when it moved that version of Opana® ER to the discontinued drug products list, such that Actavis’s Tablets have not been listed by FDA as AB rated to any version of Opana® ER since June 2012. . . .  Accordingly, Actavis’s implication that its oxymorphone ER Tablets are currently listed in the Orange Book as AB rated to the Discontinued Formulation of Opana® ER is incorrect. . . . [and] Actavis’s advertising is literally false. [Emphasis in original]

As such, says Endo, “Actavis’s misrepresentations concerning the nature, characteristics and qualities of the Generic Oxymorphone ER Tablets in connection with its commercial advertising and promotion of such Tablets constitutes a violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a),” and the court should order Actavis to immediately cease making such representations.

Actavis filed a Motion to Dismiss the case, arguing that the federal Lanham Act cannot be used as a tool to privately enforce the FDC Act:

The courts of appeal (including the Third Circuit [in Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222 (3d Cir. 1990)]) have uniformly held that matters pertaining to the identity or bioequivalence of generic drugs are vested in FDA’s regulatory authority under the FD&C Act.  Accordingly, the courts have uniformly held that the Lanham Act cannot be used by companies like Endo as an end-run around the lack of a private right of action under the FD&C Act.

We’ve previously tackled that topic here.

After the completion of briefing in the case (see additional briefs here, here, and here), Judge Dennis M. Cavanaugh of the New Jersey District Court issued his ruling granting Actavis’s Motion to Dismiss.  Applying the doctrine of primary jurisdiction, Judge Cavanaugh said that the issue of AB-rating is one for FDA to decide.  “This Court defers to the FDA to determine whether the new formulation of Opana ER is no longer AB equivalent to the generic Actavis product. . . . [I]t would be improper for the Court to make a determination on this matter before the FDA has had an opportunity to do so,” says the opinion. 

Judge Cavanaugh did not delve into the issue raised by Endo as to whether or not “Actavis’s implication that its oxymorphone ER Tablets are currently listed in the Orange Book as AB rated to the Discontinued Formulation of Opana® ER” is literally false and violates the Lanham Act.  It’s an interesting question: Is a generic version of an RLD that is discontinued A-rated to that RLD?  As noted above, the Orange Book does not list therapeutic equialence ratings for discontinued drug products.  But is such a rating implicit?  Some might say so; thus, we come full circle to A Few Good Men and Lt. Kaffee’s cross-exam of Cpl. Barnes:

Lt. Kaffee:  How did you know where the mess hall was if it’s not in this book?
Cpl. Barnes:  Well, I guess I just followed the crowd at chow time, sir.
Lt. Kaffee:  No more questions.