Opinion
1:10-cv-0544-WSD.
January 27, 2011
OPINION AND ORDER
This matter is before the Court on Plaintiffs U.S. Pharmaceutical Corporation and Grace Procurements, LLC's (collectively "USPC") Motion for Temporary Restraining Order and Preliminary Injunction (the "Injunction Motion") [11]. The Court held a hearing on the Motion on April 27, 2010, and deferred ruling pending the completion of additional discovery. The parties have completed the expedited discovery and submitted additional briefing. Having considered the parties' briefs and evidence, and considered the arguments from the April 27 hearing, the Court now issues this Opinion and Order on the Motion for Preliminary Injunction.
The parties advised the Court that a further evidentiary hearing is not necessary and that the Court may decide the Injunction Motion based on the record and the submissions of the parties.
I. BACKGROUND
This dispute arises out of a line of prescription-only prenatal nutritional supplements that Defendant Trigen Laboratories, Inc. ("Trigen"), a generic supplement manufacturer, developed to compete with supplements sold by USPC. USPC argues that Trigen is engaging in false advertising and unfair competition, which USPC alleges has caused pharmacists and other healthcare providers to fill prenatal nutritional supplement prescriptions with Trigen's line of generic supplements instead of USPC's patented supplements. USPC essentially claims that Trigen is wrongfully representing and advertising its supplements as the functional equivalent of the supplements that USPC manufactures.
A. The Parties And Their Products
USPC is a Georgia corporation with is principal place of business in Georgia. It describes itself as "a market leader in prescription prenatal and hematinic nutritional supplements for the treatment of blood disorders, primarily a need for iron replacement." Compl. ¶ 23. USPC employs approximately 57 sales people to market its products to physicians and healthcare providers. Prescriptions are required to be written for USPC's supplements. Since May of 2009, USPC has sold a line of prescription prenatal nutritional supplements known as Concept DHA, Concept OB, Integra F, and Integra Plus (collectively, "USPC's Supplements"), which account for about 70% of USPC's total annual revenue. USPC's Supplements are multivitamin and multi-mineral supplements that contain, among other ingredients, iron. An insufficient iron level during pregnancy is a risk factor for several adverse pregnancy outcomes. USPC's Supplements also contain Vitamin C, or ascorbic acid, which is believed to have several benefits, including enhancing the body's absorption of iron.
Hematinic is "a medicine, as a compound of iron, that tends to increase the amount of hematin or hemoglobin in the blood." Webster's Encyclopedic Unabridged Dictionary of the English Language 890 (2001).
USPC's Supplements are the only prescription supplements that contain ProAscorb C, USPC's trademarked name for its patented mixture of Vitamin C components and other ingredients. ProAscorb C is protected by United States Patent No. 5,626,883 (the "`883 Patent"), entitled "Ascorbic Acid Compositions Providing Enhanced Human Immune System Activity." Plaintiff Grace Procurements, LLC, has exclusive rights in the `883 Patent, and has granted an exclusive sub-license to Plaintiff U.S. Pharmaceutical Corporation.
Humans are unable to synthesize Vitamin C naturally and it must therefore be ingested in a person's diet. Vitamin C deficiencies lead to well-known diseases, including ailments as severe as scurvy. Vitamin C has a variety of positive health benefits, including the enhancement of certain immune system activity. Except for individuals with certain metabolic disorders, Vitamin C may be ingested in large doses without a negative reaction. Vitamin C may be introduced to the diet directly as ascorbic acid, or as the by-product of a salt or ester form of ascorbic acid, or as a mixture containing different amounts of each of these. Manufacturers sometimes claim that certain formulations of ascorbic acid increase its effectiveness.
The terms "Vitamin C," "ascorbic acid," and " l-xyloascorbic acid" are often used interchangeably.
A salt is "any of a class of compounds formed by the replacement of one or more hydrogen atoms of an acid with elements or groups . . . and which usually ionize in a solution," while an ester is "a compound produced by the reaction between an acid and an alcohol." Webster's Encyclopedic Unabridged Dictionary of the English Language 663, 1695 (2001).
As described by the `883 patent, before Vitamin C's positive effect on the human immune system occurs, the administration of Vitamin C initially causes a period of reduced immune system activity, "the period of inhibition lasting for about two to four hours, followed by enhancement." `833 Patent at col. 5. The `833 Patent claims to prevent or reduce the initial suppression of immune system activity with a unique formulation of ascorbic acid that is a mixture of water and fat soluble forms of ascorbic acid. Fat soluble forms are also referred to as ascorbyl esters or oil soluble esters. The patent recommends ratios of water soluble to fat soluble ascorbic acid of between 37:1 and 25:1. `833 Patent at 3.
The water soluble portion of the `833 Patent's composition may contain one or a mixture of ingredients from the following group: ascorbic acid, niacinamide ascorbate, and certain mineral salts of ascorbic acid, such as calcium ascorbate, magnesium ascorbate, potassium ascorbate, and sodium ascorbate. The fat soluble portion of the composition may contain any of a number of ascorbyl esters, but ascorbyl palmitate is the most preferred. According to the `833 Patent, the "inclusion of fat soluble ascorbyl esters increases the penetration of ascorbic acid across the bilayer lipid membrane." `833 Patent at col. 6.
The composition may also contain any number of substances that enhance the effectiveness of Vitamin C within the body, including amino acids, metabolic by-products of ascorbic acid break down, and glutathione. The most preferred formulation of ascorbic acid is listed as containing 1-xyloascorbic acid, niacinamide ascorbate, calcium ascorbate, magnesium ascorbate, potassium ascorbate, and sodium ascorbate as the water soluble forms of ascorbic acid, and ascorbyl palmitate as the oil soluble ascorbyl ester. `833 Patent at col. 8. Besides avoiding initial immune system suppression, the patent claims that its formulation causes ascorbic acid to be absorbed more quickly and retained longer by the body. The patent specifically claims that the oil soluble ester form of ascorbic acid aids in the absorption of the ascorbic acid and enhances the effect of Vitamin E.
Trigen is a New Jersey Corporation with its principal place of business in New Jersey. Its business model is to formulate alternatives or substitutes for existing brand-name vitamin products and offer them for sale at lower prices. Before marketing the prescription prenatal vitamins at issue in this case, Trigen marketed several other lines of prenatal vitamins.
In 2009, Trigen planned to introduce six additional lines of prenatal supplements that would have the same active ingredients in the same amounts as six existing brand-name supplements. Of those, four sought to match USPC's Supplements: Taron-C DHA, Folivane-F, Folivane-OB, and Folivane-Plus (collectively "Trigen's Supplements"). Unlike USPC, Trigen does not employ a sales force to market its prescription prenatal supplements. It relies instead on being linked to targeted competitors' supplements in drug information databases, so that when healthcare providers or pharmacists search for a competitor's supplement, the search results include both the competitor's supplements and Trigen's Supplements.
In formulating its proposed alternatives, Trigen looked first to the labels on USPC's Supplements to identify the quantities of each ingredient. Trigen also examined the `833 patent to determine the amount and type of Vitamin C in USPC's Supplements. Based on the patent's preferred formulation, Trigen chose a mixture of ascorbic acid and the ascorbic acid salts preferred by the Patent. Trigen also included several of the metabolites and amino acids preferred by the Patent. Unlike the `833 Patent, however, Trigen did not include the oil-soluble ascorbyl ester. Trigen asserts it did not include the small amount (a ratio of between 1:25 and 1:37.5) of oil soluble ester preferred in the Patent because oil soluble ascorbyl ester is broken down into ascorbic acid before it is absorbed by the body, and thus its omission would not impact the overall effectiveness of the Vitamin C in its formulation. By including everything preferred in the `833 patent except the oil soluble ester, it appears Trigen could mimic USPC's patented formulation without infringing the patent.
Beginning in November of 2009, Trigen applied to have its supplements listed in the drug databases. The list of active ingredients for each of Trigen's Supplements matched the list of active ingredients for the targeted USPC Supplement. Trigen matched the amounts of Vitamin C in each supplement, except that where USPC's Supplements said "Vitamin C (from ProAscorb C)," Trigen's Supplements said "Vitamin C (compare to ProAscorb)" and referenced a footnote. The footnote said: "Compare to ProAscorb, a patented pharmaceutical grade material consisting of ascorbic acid plus Ascorbic Acid Precursors: (1) Acid Metabolites including niacinamide ascorbate, calcium ascorbate, magnesium ascorbate, potassium ascorbate and sodium ascorbate; (2) Basic Amino Acids including lysine acetate and glycine; (3) Flavonoids including hesperidin; and (4) Glutathione." In the applications to have its supplements listed in the drug databases, Trigen specifically listed USPC's Supplements as "reference" drugs that Trigen's Supplements should be linked to.
In December of 2009, Trigen succeeded in having its supplements linked to USPC's Supplements in one of the drug information databases. After another database did not link Trigen's Supplements to USPC's Supplements because of differences in the amount of elemental iron, Trigen slightly altered the formulation of iron in the supplements so the second drug database company would link Trigen's Supplements to USPC's Supplements. Trigen changed its label to reflect the new formulation
After the preliminary injunction hearing on this Motion, Trigen made a second label change. After the Court expressed reservations during the hearing about the "Compare To" language in the label, Trigen removed the "Compare to ProAscorb" language from its supplement labels. Trigen sent the revised labels to the drug databases, and Trigen's Supplements were thereafter linked to USPC's Supplements based on the new labels. This "linking" by the drug information databases is at the core of this dispute.
B. The Drug Information Databases And Drug Equivalence
Drug information database companies play a role in the process of the fulfillment of a doctor's medicine prescription and the delivery of the prescribed medication to a patient by a pharmacy or other drug fulfillment source. The databases collect information about the active ingredients and pricing of each drug, and pharmacies, hospitals, and other healthcare providers rely on this information when deciding which prescribed items to dispense. Aside from active ingredients and price, the drug databases also provide information on pharmaceutical equivalence and can provide information about therapeutic equivalence.
Pharmaceutical equivalence is generally understood to mean "drug products in identical dosage forms that contain identical amounts of the identical active drug ingredient." 21 CFR § 320.1(c). In contrast, pharmaceutical alternatives "contain the identical therapeutic moiety, or its precursor, but not necessarily in the same amount or dosage form or as the same salt or ester." Id. § 320.1(d). The database companies rely on the active drug ingredient and other information provided by drug manufacturers to classify drugs based on pharmaceutical equivalence. The companies do not independently verify the accuracy of the ingredient information — most often provided in product labels — or other information that manufacturers provide. The database companies follow internal processes to create generic alphanumeric identifiers based on a drug's active ingredient, strength, dosage, and route of administration. If two drugs are identical across those four attributes then their generic alphanumeric identifiers will also be the same, indicating that they are pharmaceutically equivalent. Two drugs with the same generic identifier are "linked," meaning that searching for one drug in the database will retrieve information on both drugs. When manufacturers submit drug information for listing in a database, they sometimes indicate that their drug should be linked to a competitor's drug, but a drug database company only links them if the two drugs have the same active ingredient, strength, dosage, and route of administration.
"Moiety" refers to "the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt . . ., or other noncovalent derivative . . . of the molecule, responsible for the physiological or pharmacological action of the drug substance." 21 C.F.R. § 314.108(a).
Pharmaceutical equivalence between two drugs does not mean that the two drugs are therapeutically equivalent, even though they have the same active ingredients in the same strength, dosage, and route of administration. Therapeutic equivalence is generally understood to refer to drugs that are pharmaceutically equivalent and that "can be expected to have the same clinical effect and safety profile when administered." Food Drug Admin., Approved Drug Products with Therapeutic Equivalence Evaluations iv (30th ed. 2010) (hereinafter "Orange Book"). Therapeutic equivalence means the drugs are bioequivalent, in that there is no "significant difference in the rate and extent to which the active ingredient . . . becomes available at the site of drug action." Id. at v; see also 21 CFR § 320.1(e). "Different salts and esters of the same therapeutic moiety are regarded as pharmaceutical alternatives . . ., [and] are not considered to be therapeutically equivalent." Orange Book at xi.
The Orange Book, published by the FDA, is the main industry standard for determining whether drugs are therapeutically equivalent rather than only pharmaceutically equivalent. The publication lists all drugs approved on the basis of safety and effectiveness by the FDA under the Food, Drug, and Cosmetic Act. When the FDA determines that a non-name-brand drug is therapeutically equivalent to a name-brand drug, it publishes that finding in the Orange Book. A non-name-brand drug that is published in the Orange Book as therapeutically equivalent to a name-brand drug is often referred to as a generic version of the name-brand drug. The therapeutic equivalences published in the Orange Book are reported in the drug information databases, allowing pharmacists viewing a list of pharmaceutically equivalent drugs to also see which drugs the FDA has determined are therapeutically equivalent.
The prenatal supplements at issue in this case contain ingredients that were in general use before the passage of the FDCA. Thus, they are deemed "grandfathered-in" and may be marketed without an FDA determination of safety and effectiveness. For this reason, they are also not included in the Orange Book and no evaluation is made whether pharmaceutically equivalent supplements are also therapeutically equivalent. When USPC's Supplements are searched for in the database, they are linked to Trigen's Supplements, and results for both are returned, because their linking indicates, at most, that they are pharmaceutically equivalent. The databases, by their nature and function, do not represent that the supplements are therapeutically equivalent. In fact, they explicitly warn that drugs that are listed together as pharmaceutically equivalent may have different efficacies.
Based on the information contained in the drug databases, pharmacists will sometimes substitute the drug or substance that customers have been prescribed by their doctor for a less expensive alternative. State law governs how and when these substitutions may be or must be made. Pediamed Pharm., Inc. v. Breckenridge Pharm., Inc., 419 F. Supp. 2d 715 (D. Md. 2006) ("The substitution of a brand name drug with a generic drug is governed by state law."). Some states mandate that a pharmacist may only substitute a drug if the Orange Book indicates that it is therapeutically equivalent. See id. "In fewer than ten states, a generic need only be pharmaceutically equivalent (i.e., the drug has identical active ingredients, strength, and dosage form) in order to be substituted." Solvay Pharm., Inc. v. Global Pharm., 298 F. Supp. 2d 880 (D. Minn. 2004). Georgia is one of the states that allow pharmacists to substitute one drug for another on a mere showing of pharmaceutical equivalence, rather than the more rigorous therapeutic equivalence standard. Graceway Pharm., LLC v. River's Edge Pharm., LLC, No. 2:08-cv-0067-RWS, 2009 WL 3753586, at *3 (N.D. Ga. Nov. 6, 2009). Other states may use different systems. See generally, Healthpoint, Ltd. v. Ethex Corp., 273 F. Supp. 2d 817 (W.D. Tex. 2001) (describing variations on state systems allowing pharmacists to substitute one prescribed drug for another).
C. Procedural Background
After USPC's Supplements were linked to Trigen's Supplements in the databases, USPC wrote to one of the database companies requesting that USPC's products be delinked from Trigen's products. The database company refused. After it did, USPC, on February 25, 2010, initiated this litigation, arguing that when Trigen requested the linking between its products and USPC's Supplements, it was engaging in misleading advertising and unfair competition.
On March 19, 2010, USPC moved for a temporary restraining order and a preliminary injunction to prohibit alleged misrepresentations that the Trigen Supplements that competed with the USPC Supplements were equivalent. On April 27, 2010, the Court held a hearing on USPC's temporary restraining order request. As a result of the hearing, the Court ordered the parties to conduct expedited discovery into how the database companies interpreted the labeling information that USPC and Trigen submitted to them, and whether the database companies independently determined whether to link the supplements or relied on Trigen's recommendation about the appropriate reference drug.
The parties completed the expedited discovery that the Court ordered and have submitted supplemental briefing on USPC's motion for preliminary injunction relief. The parties also submitted a third round of briefs after USPC filed its Emergency Motion for Hearing or for Status Conference on Motion for Preliminary Injunction [48]. This motion was apparently prompted by threats, made by a company that provides preferred drug lists to state Medicaid programs, to remove USPC's Supplements from its list of approved prescription drugs. After considering the briefs submitted by the parties on the motion for preliminary injunction relief and on the motion for emergency hearing or status conference, as well as the arguments presented during the April 2010 hearing, the Court now considers USPC's request for injunctive relief.
II. DISCUSSION
A. Legal Standard
To be eligible for a preliminary injunction under Federal Rule of Civil Procedure 65, a movant must show: (1) a substantial likelihood of prevailing on the merits; (2) that Plaintiff will suffer irreparable injury if the relief is not granted; (3) that the threatened injury outweighs the harm the relief would inflict on the opposing party; and (4) that if granted, the injunction would not be adverse to the public interest. See Schiavo ex rel. Schindler v. Schiavo, 403 F.3d 1223, 1225-26 (11th Cir. 2005);Parker v. State Bd. of Pardons Paroles, 275 F.3d 1032, 1034-35 (11th Cir. 2001); Baker v. Buckeye Cellulose Corp., 856 F.2d 167, 169 (11th Cir. 1995).
Preliminary injunctive relief is a drastic and extraordinary remedy that should not be granted unless the movant can clearly establish each of the four elements. Four Seasons Hotels Resorts, B.V. v. Consorcio Barr, S.A., 320 F.3d 1205, 1210 (11th Cir. 2003). "The burden of persuasion on all of the four requirements for a preliminary injunction is at all times upon the plaintiff." Canal Auth. of Fla. v. Callaway, 489 F.2d 567, 573 (5th Cir. 1974).
B. Discussion
The Court first addresses the requirement that the movant prove a likelihood of success on the merits.
1. Likelihood Of Success
USPC requests preliminary injunctive relief from Trigen's alleged false advertising and unfair competition under Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). USPC also asserts a claim of unfair competition based on O.C.G.A. § 23-2-55 and Georgia Common Law. The Lanham Act and Georgia's prohibition against unfair competition are "co-extensive," so the Court will focus its discussion on the Lanham Act. See Optimum Techs., Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231, 1248 n. 11 (11th Cir. 2007) ("the analysis of a Georgia unfair competition claim is `co-extensive' with the analysis of a Lanham Act claim"). Because USPC's claim of unfair competition encompasses the same actions as its false advertising claim, the Court also will discuss these claims together. See Graceway Pharm., LLC v. River's Edge Pharm., LLC, No. 2:08-cv-0067-RWS, 2009 WL 3753586, at *6 n. 13 (N.D. Ga. Nov. 6, 2009).
To succeed on its false advertising claim under 15 U.S.C. § 43(a)(1)(B), USPC must establish that:
(1) the advertisements of the opposing party were false or misleading; (2) the advertisements deceived, or had the capacity to deceive, consumers; (3) the deception had a material effect on purchasing decisions; (4) the misrepresented product or service affects interstate commerce; and (5) the movant has been-or is likely to be-injured as a result of the false advertising.Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1260-61 (11th Cir. 2004). The parties dispute centers on the first three factors.
Under the first prong, USPC must show either that Trigen's statements are "literally false as a factual matter," or else are "literally true or ambiguous but which implicitly convey a false impression, are misleading in context, or likely to deceive consumers." Id. at 1261 (internal quotation marks omitted). USPC concedes that the statements are literally true, but argues that they mislead pharmacists, healthcare providers, and consumers into thinking that the two companies' supplements are equivalent or substitutable when, in fact, they are not.
To establish that Trigen's statements are true but misleading, USPC "must present evidence of deception in the form on consumer surveys, market research, expert testimony, or other evidence." Id. (internal quotation marks omitted). USPC alleges that it is being harmed because misleading statements by Trigen caused Trigen's Supplements to be linked to USPC's Supplements in the databases, and that because of this misleading linkage pharmacists are dispensing Trigen's Supplements to consumers in place of USPC's Supplements. USPC acknowledges that Trigen is otherwise free to sell its supplements.
Under the circumstances of this case, the question is not whether the labels on Trigen's Supplements directly confuse customers, because the decision to purchase supplements is mediated by doctors and pharmacists, who in turn decide which to dispense based, in part, on the information that drug database companies provide. Thus, the relevant entities for considering whether Trigen's statements or actions were misleading are the database companies, which relied on Trigen's statements to link the supplements in the databases, and pharmacists, which rely on the information in the databases to choose, if state law allows it, to dispense Trigen's Supplements in place of USPC's Supplements.
End consumers of the Supplements may arguably have been misled by the "Compare to ProAscorb" language on Trigen's Supplements' labels, but Trigen has represented to the Court that this language has been removed. While USPC may be able to prove the elements of false advertising with regard to past statements that misled consumers, this past injury from past statements is not appropriate for a preliminary injunction and is not considered here.
Other healthcare providers besides pharmacists may also rely on the drug database linkages when deciding between USPC's and Trigen's Supplements. Since such actors arguably have similar expertise to pharmacists and would allegedly be deceived by the linkage in a similar manner, the Court focuses its analysis on how pharmacists might be deceived, and on the role of the databases in a pharmacist's decision which supplement to dispense.
The question before the Court is whether USPC has shown that it is likely to succeed in proving that Trigen's statements or actions were misleading, that they did deceive or were capable of deceiving drug database companies or pharmacists, and that this deception had a material effect on decisions to dispense Trigen or USPC Supplements. The relevant statements or actions are Trigen's statement to the drug database companies that its Vitamin C can be compared to ProAscorb, its statement to the drug database companies that USPC's Supplements are reference drugs, and its act of requesting and allowing the database linkage between its supplements and USPC's Supplements. It is not credible to claim that database companies are misled by the information provided to them by Trigen.
a) The "Compare To ProAscorb" Language
USPC alleges that the language on the old labels for Trigen's Supplements saying to "compare" Trigen's Vitamin C formulation to ProAscorb is misleading because ProAscorb is a patented formulation of Vitamin C and Trigen is causing consumers and healthcare providers to purchase Trigen's Supplements on the belief they have the same properties as patented ProAscorb formulations. Trigen says the language is not misleading because it is says only that the Vitamin C formulation is comparable, not identical, and that its Vitamin C was specifically formulated to be comparable to ProAscorb.
At first blush it may seem that the "compare to" language is misleading. In particular, the ingredient language refers to and is informed by a specific footnote that says to compare Trigen's Vitamin C to ProAscorb and then lists the components of Trigen's formulation of Vitamin C. This, it may seem, can give the impression that the list of compounds in Trigen's Vitamin C is the same as that in ProAscorb when, in fact, ProAscorb contains additional compounds not present in Trigen's formulation, most notably the oil soluble ascorbyl ester.
The evidence shows, however, that the "compare to" language and footnote were irrelevant to the database companies' decisions whether to link the supplements. The parties in this case deposed representatives from two of the major drug information database companies, First DataBank and Medi-Span. Both indicated that the "compare to" language was not and would not be relevant to the decision to link two drugs. The representative from First Database said that USPC's parenthetical note that the Vitamin C in its supplements was "from ProAscorb C," "did not play a part in the decision" and that Trigen's parenthetical note to "compare to ProAscorb C" "does not play a part in the decision because it doesn't actually represent the ingredient. It appears to represent a product name that's trademarked." Dep. of Douglas Closson ("FDB Dep.") at 72:17-24, 74:13-20. The representative from Medi-Span testified similarly, saying that for Trigen's Supplements "the language `Compare to ProAscrob' would have no impact into the assignment of ingredients" and that it was his belief that, for USPC's Supplements, "the statement `from ProAscorb' would have no impact into the assignment of ingredients for that product as well." Dep. of Eric Cardinal ("Medi-Span Dep.") at 74:20-75:15.
Based on this testimony, the Court finds that the language "compare to ProAscorb" and the related footnote did not have a material effect on the decisions of the database companies to link Trigen's Supplements to USPC's Supplements. The testimony of the database representatives underscores that the information provided by Trigen and other manufacturers are unlikely to confuse or mislead the database companies absent some outright fraudulent information being provided.
The Court notes also that Trigen has removed from its labels the "compare to" language and the footnote related to the phrase. Whether the label caused past injury by misleading consumers or healthcare providers is not relevant on a motion for a preliminary injunction. Instead, the only way that language may be generating current and future injury is if it misled the database companies to wrongfully link Trigen's Supplements to USPC's Supplements, and if that wrongful link is creating an ongoing injury.
The Court concludes USPC is not likely to succeed on its false advertising claim as it relates to the effect of the "compare to" language on the database companies or in leading to the linking of its supplements with Trigen's Supplements.
b) The Reference To USPC's Supplements In Trigen's Applications To The Database Companies
When Trigen submitted the information about its supplements to the drug database companies for listing in their databases, it included "references" to the USPC Supplements to which it believed Trigen's Supplements should be linked. USPC asserts this reference was misleading because USPC's Supplements have a different Vitamin C formulation than Trigen's Supplements, meaning they are not equivalent or substitutable. USPC argues that by naming USPC's Supplements as references, Trigen misled the database companies into believing that the supplements were equivalent and substitutable.
The evidence, however, shows that the reference to USPC's Supplements did not materially affect the database companies' decisions to link the products. The representatives from the database companies both testified that they follow internal processes where teams conduct independent analyses of the label information, and from this evaluation the databases independently determine how to classify new drug submissions. The Medi-Span representative testified: "We would take the information we received from the manufacturer," such as the "package insert, the actual package label," and then "we take that information, and we have a review process within what we call our data application team, and they review that information. And they enter into our internal system, our internal database, the relevant information that pertains to that particular drug." Medi-Span Dep. at 19:11-23. The review teams include Medi-Span pharmacists. Id. at 23:14-16.
The representative for First DataBank likewise testified that, once a generic alphanumeric identifier — referred to as a "clinical formulation" — has been created, "the decision to put other products in that clinical formulation or associate them with that same formulation can occur solely within the judgment of the product group and its pharmacists." FDB Dep. at 62:3-10.
The database companies also do not rely on manufacturers' suggestions about which products should be linked. The representative from First Databank said that "it's incumbent upon us to read product labeling and determine if they share the same ingredients, route, strength and dosage form. So we would not have relied on information from a manufacturer telling us where they thought it should go." FDB Dep. at 83:24-85:5. The Medi-Span representative similarly testified: "The request of a manufacturer is not part of the GPI definition and would have no bearing or standing in a decision for a GPI." Medi-Span Dep. at 59:13-15. Both representatives testified that the classification is based solely on the quantity of active ingredients, the dosage form, and the route of administration. Trigen's Supplements and USPC's Supplements contain the same active ingredients in the same amounts, are in the same dosage form, and have the same route of administration, and for that reason the database companies linked them together. This would have occurred if Trigen had not listed USPC's Supplements as references.
GPI is the term Medi-Span uses for the generic alphanumeric identifier it assigns to a drug "based on active ingredient, strength, strength unit of measure, dose form, and route." Id. at 27:15-18. Two drugs are "linked" in Medi-Span's database when both drugs have the same GPI.
In one instance, the evidence shows that despite Trigen's reference to USPC's products, Medi-Span did not initially link two of Trigen's Supplements to USPC's Supplements because of a small difference in the iron content. Only after Trigen changed the formulation and the label and resubmitted the information to Medi-Span did it link the two Trigen Supplements to USPC's Supplements. This example further demonstrates that Trigen's listing of USPC's Supplements as "reference" drugs in its submissions to the drug database companies did not materially affect the drug databases' linking decisions.
USPC argues that Trigen's reference to its supplements was misleading because database companies do not perform independent analyses to determine if drugs are equivalent, and instead rely on manufacturers' representations about their products. But the evidence shows that the drug database companies only rely on a manufacturer's representations about active ingredients, strengths, dosages, and routes of administration. USPC does not allege that the new labels misrepresent any of those four characteristics. USPC argues that the linking is inaccurate, not the label, and the evidence shows that the drug database companies make the decision to link two drugs and that decision is made independent of a manufacturer's recommendation.
The evidence considered as a whole shows that USPC is not likely to succeed on its claim that Trigen materially affected the database companies' linking decisions by listing USPC's Supplements as reference drugs in the drug listing applications. Because the references to USPC's Supplements did not affect the drug database companies' decisions, USPC also cannot show that the references are materially affecting decisions to link Trigen's Supplements to USPC's Supplements.
c) Linking USPC's And Trigen's Supplements In The Databases
USPC next alleges that it is misleading for Trigen to "continue to allow the database companies to maintain the resultant linking of its products with USPC's products, when Trigen admits its products do not contain the same Vitamin C ingredients." Pl.'s Supplemental Br. in Supp. of Prelim. Inj. at 1-2. USPC argues that Trigen "manipulated a system that it fully understands" by taking advantage of the drug database companies' policies of not distinguishing between different sources of Vitamin C, so that Trigen's Supplements would be linked to USPC's Supplements despite an absence of proof that the supplements are equally effective. In other words, USPC argues that the act of creating a product that is similar enough to be linked, and allowing that product to be linked by the database companies, is deceptive and misleading because of the differences in the Vitamin C formulations. USPC asks the court to enjoin Trigen by requiring it to "take steps to remedy this misrepresentation that has caused drug information databases . . . and others to link certain of Trigen's products to USPC's products containing ProAscorb C," and to "provide written notice to drug database services . . . that its products containing Trigen's ascorbic acid formulation should not be `linked' as equivalent to USPC's products containing a proprietary formulation of ascorbic acid." Id. at 2-3. The link is the problem, according to USPC, and the remedy should be to force Trigen to request the removal of the link.
An initial difficulty with USPC's argument is whether its requested relief would in fact redress its alleged injury. The database companies classify the drugs by following their internal operating procedures, and they do so independent of a manufacturer's classification request or demand. The First DataBank representative testified that "ingredient list, route, strength and dosage form . . . are combined and associated with the identifier, which is the Clinical Formulation ID." FDB Dep. at 28:5-9. Two drugs with the same ingredient list, route, strength, and dosage form will be assigned the same identifier, and will be linked. It thus appears that directing Trigen that they are required to request the database companies to de-link the supplements will not impact the database company classification decisions. Trigen would have to change its ingredient list, route, strength, or dosage criteria before a change would be considered. The evidence is that when formulation changes are submitted, a database will reevaluate its linkage decision, but based upon its independent analysis.
It further appears that the database companies might resist any attempt to delink the supplements. First DataBank's representative testified that "[t]here's value to our customers in having drugs which are pharmaceutical equivalents linked to a common identifier." FDB Dep. at 27:5-8. The Court will not order relief that would mandate action — potentially adverse action — on the part of entities that are not parties to this lawsuit, especially where the Court concludes that requiring Trigen to request de-linkage would not redress USPC's injuries.
The more fundamental problem is that under these circumstances it does not appear that linking Trigen's Supplements to USPC's Supplements in the drug information databases is actually misleading or has the capacity to deceive pharmacists and other healthcare providers. USPC seems to argue it is misleading because its supplements contain oil soluble ascorbyl ester and Trigen's Supplements do not, and that this difference means that the supplements might not be equally effective. Any difference in effectiveness, however, affects only therapeutic equivalence, and the evidence shows that neither Trigen nor the database companies have made nor are they making any representation about therapeutic equivalence. When First DataBank links two supplements, it simply is representing that they are "[p]harmaceutically equivalent . . . and that they represent the same ingredient and same strength value. . . . First DataBank is not making a representation as to its therapeutic equivalency." FDB Dep. at 75:14-19. Medi-Span also links based on pharmaceutical equivalence rather than therapeutic equivalence, and specifically tells its customers "that products identified as pharmaceutically equivalent are not necessarily bioequivalent." Medi-Span Dep. at 65:20-23. The drug database companies only list drugs as therapeutically equivalent if the FDA publishes a finding of therapeutic equivalence in the Orange Book. The database link therefore implies only what the evidence shows to be true, and nothing more: that the two companies' supplements have the same active ingredients, strength, dosage, and route of administration.
USPC's essential argument is that its products are therapeutically more effective than Trigen's and that the database linking misleads dispensers into believing that Trigen's products are therapeutically equivalent to USPC's. That is not what the databases represent when they link. The core of USPC's complaint is with the database system and how it works. They appear to argue the database company should opine on therapeutic equivalence. That argument needs to be addressed to the database companies, regulators, or other persons. It is not a viable argument here.
USPC's argument is further discredited by the fact that, to the extent the linking could be considered confusing, the confusion appears to arise not from Trigen's actions but from USPC's decision to conceal relevant information about its Vitamin C formulation on its supplement label and in the application to the drug database companies. If, as USPC argues, it is misleading to link the supplements as pharmaceutically equivalent, it is because the link misleadingly obscures important differences in the sources of ascorbic acid. But it would have been difficult if not impossible for the database companies to consider those differences because USPC chose not to disclose that information. USPC says that it is not required by the FDA to disclose the sources of its Vitamin C, but that is immaterial to deciding whether the implication of pharmaceutical equivalence is misleading due to USPC's actions rather than Trigen's actions. The evidence does not show whether more detailed information would have changed the database companies' classification of USPC's Supplements, but even if it would have changed the classification, the evidence shows that the current classification exists in significant part because of USPC's omission of information on its supplement's labels and drug listing applications.
USPC's labels mention ProAscorb but that is not enough to indicate the sources of ascorbic acid in the supplements. Even if the drug database companies looked to the `833 Patent, the Patent discusses numerous alternative formulations of Vitamin C so that it would be impossible to classify USPC's Supplements on the basis of the patent reference alone
In the Reply to the Response to the Motion for Preliminary Injunction, USPC says it is not required to list the sources of its Vitamin C under FDA labeling regulations, which provide that: "Ingredients that are sources of dietary ingredients may be listed within the `Supplemental Facts' panel, e.g., `Calcium (as calcium carbonate).' When ingredients are listed this way, they do not have to be listed again in the ingredient statement." Food Drug Admin., Guidance for Industry: A Dietary Supplement Labeling Guide, ch. V, available at
USPC has also failed to prove, as it is required on a motion for a preliminary injunction, that the presence or absence of a small amount of oil soluble ascorbic acid ester has a material effect on purchasing decisions, meaning in this case a material effect on the decisions of the database companies or pharmacists. The evidence is that the database companies do, in fact, consider the supplements to be pharmaceutically equivalent, in spite of the absence of oil soluble ester in Trigen's Vitamin C formulation. Medi-Span codes its drug listings based on a database of ingredients. Medi-Span Dep. at 22:24-23:3. Medi-Span's representative testified that the database does not distinguish between sources for Vitamin C. Id. at 42:8-11. He later stated that Medi-Span lists the ingredient as either ascorbic acid or Vitamin C. Id. at 70:13-17. First DataBank's representative similarly testified. Asked if First DataBank would take into consideration whether the Vitamin C contained water soluble or oil soluble components, he replied: "No. That would be an unusual thing for us to stop and consider." FDB Dep. at 78:16-22. First DataBank defines active ingredients by reference to authoritative sources such as the National Library of Medicine and the United States Adopted Name Council, but that well-known ingredients such as Vitamin C would be classified simply as ascorbic acid. Id. at 123:14-24, 125:22-126:8.
The Court has focused on whether the database companies were misled, because those are the entities that Trigen has communicated with. USPC has also failed to produce evidence that linking two products as pharmaceutically equivalent misleads pharmacists into believing they are therapeutically equivalent. USPC submitted the affidavit of a pharmacist who testified that when he saw the products linked in his drug purchasing and dispensing software systems, he had "the belief that the products were equivalent and thus identical in terms of active ingredients and amounts." Aff. of Bob Lomenick ¶ 13. This does not shed light on whether he believes the products are therapeutically equivalent. The pharmacist further notes that the two software programs he uses to purchase and dispense drugs list USPC's Supplements and Trigen's Supplements as "generic equivalents." The term "generic" has some ambiguity, but it is being used by software companies two steps removed from Trigen and one step removed from the database companies. USPC has failed to show whether the term "generic" is misleading in these circumstances and has not argued what relationship Trigen has with these separate companies that would cause Trigen to be liable under the Lanham Act for their decision to classify the drugs as equivalent.
The evidence shows that the relevant decision makers do not consider the differences between USPC's ProAscorb and Trigen's Vitamin C formulation to be material to the determination whether the supplements are pharmaceutically equivalent. The Court concludes that USPC has not proven that it is likely to succeed on its claim that Trigen is engaging in unfair competition or false advertising by allowing its Supplements to remain linked as pharmaceutical equivalents to USPC's Supplements in the drug information databases.
2. Other Preliminary Injunction Factors
Because USPC has not proven that it is likely to succeed on the merits of its claims that any ongoing actions of Trigen constitute false advertising or unfair competition, the Court is required to deny USPC's motion for a preliminary injunction. It is not necessary to consider the other preliminary injunction factors. The Court finds, however, that even if USPC was likely to succeed on its false advertising and misrepresentation claims, its injury would adequately be addressed in an award of damages and thus it is not irreparably injured by the claimed conduct.See Schiavo, 403 F.3d at 1225-26. Finally, USPC has not met its burden to show the injunction would not be adverse to the public interest in allowing Trigen to provide the information the databases currently require so they can provide pharmaceutical equivalence linking to dispensers of products similar to those at issue here.
III. CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that USPC's Motion for Temporary Restraining Order and Preliminary Injunction [11] is DENIED. SO ORDERED this 27th day of January, 2011.
http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/DietarySupplements/DietarySupplementlabelingguide/ucm070611.htm (citing 21 C.F.R. § 101.36(d)). The regulation uses "dietary ingredient" to refer to the nutrient that is being supplemented, and uses "ingredient" to refer to the actual compounds used to manufacture the supplement. It appears that USPC is not following this requirement correctly. The regulation states that if you list the ingredient in the "Supplemental Facts" section of the label, then you are not required to list it again in the list of ingredients. USPC, however, has not listed in the Supplement Facts panel the ingredients it used as a source of its Vitamin C, and thus it should list those ingredients in the ingredient list.See 21 C.F.R. § 101.36(d) ("When a source ingredient is not identified within the nutrition label, it shall be listed in an ingredient statement. . . ."). This is sensible, because patients concerned about intake of, for example, sodium, calcium, or potassium, may care to know that a supplement provides those in the form of sodium ascorbate, calcium ascorbate, or potassium ascorbate.