“Our eye drops are sold in compliance with FDA regulations and protect you from infection and inflammation even more effectively than FDA-approved drugs.” That’s a pretty bold statement.

Is it true? According to Allergen, it’s not. The statement in question is a claim made for a compounded drug. These drugs are not fully tested and approved by the FDA, combine active ingredients with FDA-approved drugs, and then claim superiority to them. Now it sits in the form of two lawsuits filed in California by Allergen against two of its competing compounders. While these cases will be pivotal in the world of big pharmaceuticals, what we found interesting here is the role of the FDA, if any, in making determinations that have tremendous legal consequences. When it comes to determining whether pharmaceutical manufacturers meet FDA regulations, is the FDA the expert here?

Sounding the Alarm

Why is Allergen finally sounding the alarm? Compounders have been mixing FDA-approved drugs with active ingredients and selling their concoctions to patients for years. And, they serve a vital purpose. Some patients need a particular type of FDA-approved medication but may be allergic to one or more of its active ingredients. Also, some patients (often children) are unable to swallow pills, so they need a compounded version of a medication that they can easily digest. Creating a custom version of a drug, manufactured specifically for a patient, use to be the primary use of compounded medications. Now, compounders are producing on a mass-scale, to millions of patients, flouting their compounded versions as superior to the top-shelf pharmaceutical products, posing a legitimate financial threat to the big pharmaceutical producers.

Imprimis, a compound eye drop producer and the target of one of Allergen’s seminal lawsuits, is a prime example of the type of Big Pharma dollars that are at stake, as it is currently vying to be the pinnacle post-op drug recommended by physicians to the 3.8 million cataract surgeries that are performed in the U.S. each year. With its nationally-utilized competing eye drop, Restasis, currently holding the position as one of the top recommended post-op eye drops and earning Allergen $1.5B last year, you can see why Allergen has finally called a compounder out. Allergen has also filed another lawsuit against compounder, Sincerus Florida LLC, for selling a version of Allegra’s acne drug Aczone, which earned $220 million last year.

Legal Battles

Allergan has taken a unique approach, using the Lanham Act as an offensive move to attack unfair competition rather than relying on government regulators to police them. Allergen has won at least one legal battle with this approach, overcoming Imprimis’s motion to dismiss. The court found many of Allergan’s complaints against Imprimis—including excessive manufacturing, improper compounding of certain drugs, and false superiority claims—would not require the FDA’s expertise to resolve, permitting false advertising suits as long as they do not conflict with FDA policy judgments. Interesting.

If the FDA issues an opinion that a drug is in compliance with regulations, a false advertising suit cannot lie because the FDA is most certainly the expert on the issue. However, if the FDA is silent on a compounder’s compliance, a jury’s determination, likely supported by the opinion of an independent expert witness, will serve as the final determination. What if the FDA has issued a report against the compounder? In its attempt to prove Sincerus’s failure to comply with FDA regulations, Allergan has pointed to a critical inspection report, or “483,” the FDA issued against Sincerus discussing certain manufacturing problems. The court noted this could be a “very slippery slope” and warned against it.

The court was careful to note that use of the Lanham Act to police compounders would not be permitted if they conflict with FDA policy judgments. Meaning, the FDA gets the right of first refusal to be the expert on the matter. But, if they don’t investigate and opine on compounders flouting FDA compliance, pharmaceutical companies can use the Lanham Act to get their expert opinion on the record.

What do you think of this tactic followers? Should big pharmaceutical companies be able to use the courts to police compounders or is this a job that should be left to the FDA? Who should be the expert here?