Earlier this year we discussed the application of Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), to a variety of private litigation that sought to second-guess the FDA’s drug or medical device classification decisions. Then we followed up with what we described as a “doozy” of a case along the same lines, Exela Pharma Sciences, LLC v. Sandoz, Inc., ___ F. Supp.3d ___, 2020 WL 5535026 (W.D.N.C. Sept. 15, 2020). Today we report on a couple more Buckman-based cases along the same lines.
Nexus Pharmaceuticals, Inc. v. Quva Pharma, Inc., 2020 WL 6498970 (C.D. Cal. Oct. 29, 2020), and Nexus Pharmaceuticals, Inc. v. Central Admixture Pharmacy Services, Inc., 2020 WL 6555052 (C.D. Cal. Oct. 29, 2020), are related decisions in litigation over the compounding of certain prescription drugs. “Compounding” of drugs by pharmacies (see our prior posts here, here, here, and here) exists at the intersection of FDA-regulated drug manufacturing, repackaging, and distribution with state-regulated pharmacy practice. FDA regulations define what compounders can and can’t do:
Defendant[’]s . . . “outsourcing facilities” [are] regulated by Section 503B of the Federal Food Drug & Cosmetics Act (“FDCA”). Defendants compound drugs which means that “a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.”
2020 WL 6555052, at *2 (citation omitted).
In the Quva case, the plaintiff drug manufacturer claimed that the defendants violated various state unfair competition laws because “they have not obtained the approval of [the] FDA (or any other relevant regulatory authority) to “ a compounded product that competed with the plaintiff’s FDA-approved drug. Id. In the Central Admixture case, the same plaintiff sought a preliminary injunction against other compounder defendants’ sale of similar products. 2020 WL 6555052, at *2. Both actions were dismissed under Buckman because they challenged the FDA’s determination that the defendant’s products were not “essentially a copy” of plaintiff’s approved drug in accordance with an FDA Guidance. Id.; Quva, 2020 WL 6555052, at *1.
Implied preemption under Buckman barred both actions. In Quva, plaintiffs’ unfair competition claims were tautological – the competition was only “unfair” because it allegedly violated the FDCA.
[Plaintiff] argues that it is not suing to privately enforce the FDCA because Defendants’ violation of the FDCA is a separate harm of unfair competition. Yet Defendants’ actions are unfair only because they purportedly violate the FDCA. . . . Put another way, [plaintiff] alleges that Defendants’ actions constitute unfair competition because they are not following the rules − and those rules are the FDCA rules.
2020 WL 6555052, at *3. Thus, the unfair competition “claims exist only because of the FDCA’s requirements,” requiring implied preemption under Buckman. Id. The question whether the defendant’s product could, or could not, be marketed as “essentially a copy” of another already approved product was for the FDA to decide:
FDA approval is clearly within the scope of the FDCA’s comprehensive regulatory authority. And whether Defendants’ product is “essentially a copy” of [plaintiff’s] product is a determination which implicates various exceptions that directly implicate the FDA’s rulemaking authority. In effect, [plaintiff] is asking the Court to displace the FDCA, which requires individual determinations by the FDA, and does not afford space for non-federal enforcement.
Id. (citations and most quotation marks omitted).
The plaintiff in Quva sought to avoid Buckman by relying on the infamous Stengel v. Medtronic, Inc., 704 F.3d 1224 (9th Cir. 2013) (en banc), decision. That attempt failed because Stengel involved allegations of “parallel” claims:
[Stengel] held that a negligence claim for failure to warn the FDA was not preempted insofar as the state-law duty parallels a federal-law duty under the MDA. Yet . . ., a parallel duty may save a claim only from express preemption. . . . Implied preemption is another hurdle.”
2020 WL 6555052, at *3 (citations and quotation marks omitted). Buckman does not allow suits over allegations simply that the defendant engaged in “conduct that violates the FDCA.” Id.
Similar reasoning disposed of the injunction request in the Central Admixture case. Private FDCA-based injunctions were no less barred under Buckman than private damages actions:
Congress made the FDA responsible for investigating potential violations of the FDCA, and gave it a number of enforcement mechanisms, including injunction proceedings, civil and criminal penalties, and seizure. Given this scheme, if someone believes the FDCA is being violated, a private lawsuit is generally not the way to address it. While citizens may petition the FDA to take administrative action, private enforcement of the statute is barred.
2020 WL 6555052, at *2 (citations and quotation marks omitted). After repeating its discussion of the tautological nature of the plaintiff’s legal theory described above, id. at *3, Central Admixture reiterated that “whether Defendants’ product is ‘essentially a copy’ of [plaintiffs’], in violation of the FDCA, must be left to FDA.” Id.
The additional injunction requirements did not change the result in Central Admixture. In particular, the “public interest” in “enforcing the law,” could not overcome Congress’ decision that FDCA enforcement was the exclusive province of the FDA.
[T]he law that [plaintiff] seeks to enforce, the FDCA, is to be exclusively enforced through the FDA’s comprehensive regulatory authority. To grant [its] preliminary injunction would ignore Congress’s determination that the public interest is best served when the FDCA is enforced by the FDA.
Id. at *5 (citations and quotation marks omitted).
While the two Nexus Pharmaceuticals cases arose in the context of business disputes, the preemption principles they enforce are equally applicable to product liability and other tort claims (including unfair competition claims) that are brought against our clients. For that reason, we’ll keep bringing them to our readers’ attention.