Case Briefing

In March 1998, appellant Apotex Inc. filed an abbreviated new drug application (ANDA) with paragraph IV certification stating that its product would not infringe SmithKline's patent. SmithKline filed suit, triggering the automatic 30-month stay during which the FDA could not approve Apotex's ANDA. That stay expired Nov. 21, 2000. In the meantime, however, SmithKline was issued more patents it claimed were related to Paxil(r), which the FDA listed in the Orange Book. Apotex in turn made paragraph IV certifications as to these patents, prompting SmithKline to sue for patent infringement; additional 30-month automatic stays were therefore added to the original.

After much lawsuit-filing activity on both sides, Apotex filed an amended complaint in this case in May 2001. In the new complaint, Apotex alleged, among other things, that the later-filed patents did not claim Paxil' or a method of using the drug as approved in the original NDA and that the FDA had erred in failing to determine whether the later-filed patents qualified for listing in the Orange Book. Apotex sought declaratory and injunctive relief, including a declaration that the later-filed patents were improperly listed in the Orange Book and an injunction requiring the FDA to de-list those patents and to approve Apotex's ANDA.

In June 2001, the federal defendants moved to dismiss Apotex's amended complaint for failure to state a claim upon which relief could be granted. The district court granted the federal defendants' motion, holding that the there is no cause of action against the FDA to de-list a patent from the Orange Book. The Federal Circuit agreed, finding that the Hatch-Waxman Act does not require the FDA to police the listing process by analyzing whether the patents listed by NDA applicants actually claim the subject drugs or applicable methods of using those drugs.

Pharmacy That Compounded Drugs Not a 'Manufacturer'

Pharmacies or pharmacists will not be held strictly liable as drug manufacturers when, based on observed prescribing patterns, they compound two or more drug products into a single product in anticipation of receiving valid prescriptions from patients, absent evidence that this activity was conducted on a large scale. Schaerrer v. Stewart's Plaza Pharmacy Inc., No. 20010471, 2003 UT 43; 2003 Utah LEXIS 105 (4th Dist., Provo Dept. 10/21/03).

In 1995, plaintiff was prescribed fenfluramine to be taken three times per day and phentermine to be taken once a day as a weight-loss measure. Between November 1996 and June 1997, plaintiff filled five prescriptions for fenfluramine and phentermine from her pharmacy, but switched pharmacies when she learned of a one-a-day fen-phen capsule that was available from the defendant Stewart's Plaza Pharmacy. The one-a-day capsule was formulated by Stewart Koeven, a pharmacist and the proprietor of the pharmacy, who compounded raw fenfluramine, phentermine, methylcellulose (as a time-release agent), and lactose (as a filler). After creating his one-a-day fen-phen capsule, Koeven distributed samples of it to local physicians for experimental use with their patients. Eventually, Stewart's began receiving and filling prescriptions for the one-a-day fen-phen capsule. Koeven testified that neither he nor Stewart's Plaza Pharmacy ever tested the safety or efficacy of the compounded drug.

Plaintiff allegedly suffered side effects from the drug and eventually required open-heart surgery to repair two damaged heart valves. She brought suit against several defendants, including the pharmacy and pharmacist. On Stewart's motion for summary judgment, the trial court found that a reasonable jury could find that Stewart's acted as a manufacturer rather than a pharmacist and could therefore be subject to strict liability. Thus, the motion to dismiss was denied. Stewart's, however, filed a second motion for summary judgment based on the indemnity provisions of plaintiff's settlement with one of the drug's manufacturers. The court granted that motion, and plaintiff appealed.

The appellate court affirmed the district court's decision to dismiss plaintiff's claims, although on different grounds. It extended the learned intermediary rule to exempt pharmacies from strict products liability when they properly fill a physician's prescription and held that a pharmacy collaborating with local physicians to develop a unique compounded product aimed at improving patient compliance, which is distributed according to prescription, cannot be re-classified as a drug manufacturer and held strictly liable for the compounded drug product. Even if the pharmacy produces the compounded drug product before receiving a prescription, the size and scale of the pharmacy's compounding practice is one of the most important indicators of improper “manufacturing” conduct. In this case, no evidence was presented concerning the overall scope of Stewart's practice, nor of the proportion of that practice committed to compounding the one-a-day fen-phen, so the court found that no indication from the record that Stewart's was conducting a large-scale, speculative, compounding business similar to that of a commercial pharmaceutical drug manufacturer.

Although It Met FDA Requirements, Label May Have Been Inadequate

Even though the FDA at the time of plaintiff's injury did not require the label on the drug prescribed to her to carry warnings about the potential for tendon injury, plaintiff's allegation that the drug's manufacturer knew of such potential and withheld that information was enough for her suit to survive a motion for summary judgment. Garfinkel v. Bayer Corp., N.Y.L.J. 11/16/03, Pg. 17 (Sup. Ct., IA Part 47, N.Y. Cty.).

Plaintiff, a 65-year-old woman, alleged that she sustained multiple ruptures of the Achilles tendon when she tripped while climbing temple steps at Angkor Wat in Cambodia, in 1995. According to plaintiff, this rupture occurred after the ingestion of a 10-day course of the antibiotic Ciprofloxacin Hydrochloride sold by Bayer under the name of Cipro', which was prescribed for her in October 1994 to combat a severe case of chronic sinusitis. Plaintiff had a history of heel pain and of Achilles tendon calcifications that were treated with steroids.

Defendant Bayer sought summary dismissal of plaintiff's product liability personal injuries claims, arguing that prescribing information required by the FDA did not associate Cipro' with tendonitis or tendon rupture at the time of plaintiff's injury. Plaintiff alleged that, since 1993, French regulators have required that companies selling fluoroquinolones (including Cipro') include a warning about possible tendon injury in the French physician's desk reference. The court denied summary dismissal, finding that plaintiff raised an issue as to whether her injuries could be directly tied to Cipro' use, and Bayer failed to present conclusive evidence that certain changes to tissue removed from plaintiff's heel resulted from repeated steroid injection, age, use of other drugs or other factors unrelated to plaintiff's Cipro' use. In addition, the fact that the FDA did not require drug manufacturers to warn of the possibility of tendon ruptures until after plaintiff's injury did not automatically absolve Bayer of all liability here since plaintiff alleged that Bayer or its predecessor knew of but withheld such information and delayed reporting it.

FDA Not Required to Police Orange-Book Listings

The FDA does not have a duty under the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (the Hatch-Waxman Act) to review the substance of patents filed in its Orange Book to make sure that the patent holder has not, in contravention of 21 U.S.C.S. ' 355(c)(2), listed a patent unrelated to the subject drug. Apotex Inc. v. Thompson, No. 02-1295, 2003 U.S. App. LEXIS 21818 (Fed. Cir. 10/27/03).

SmithKline Beecham Corp. is the holder of an NDA for the pharmaceutical Paxil', the active ingredient in which is paroxetine hydrochloride hemihydrate. On Dec. 29, 1992, the FDA approved SmithKline's NDA for the use of Paxil' to treat depression. Pursuant to 21 U.S.C. ' 355(b)(1), SmithKline referred in its NDA to its U.S. Patent No. 4,721,723 (the '723 patent), which claims crystalline paroxetine hydrochloride hemihydrate. Accordingly, the FDA listed the '723 patent in the Orange Book when it approved SmithKline's NDA.

In March 1998, appellant Apotex Inc. filed an abbreviated new drug application (ANDA) with paragraph IV certification stating that its product would not infringe SmithKline's patent. SmithKline filed suit, triggering the automatic 30-month stay during which the FDA could not approve Apotex's ANDA. That stay expired Nov. 21, 2000. In the meantime, however, SmithKline was issued more patents it claimed were related to Paxil(r), which the FDA listed in the Orange Book. Apotex in turn made paragraph IV certifications as to these patents, prompting SmithKline to sue for patent infringement; additional 30-month automatic stays were therefore added to the original.

After much lawsuit-filing activity on both sides, Apotex filed an amended complaint in this case in May 2001. In the new complaint, Apotex alleged, among other things, that the later-filed patents did not claim Paxil' or a method of using the drug as approved in the original NDA and that the FDA had erred in failing to determine whether the later-filed patents qualified for listing in the Orange Book. Apotex sought declaratory and injunctive relief, including a declaration that the later-filed patents were improperly listed in the Orange Book and an injunction requiring the FDA to de-list those patents and to approve Apotex's ANDA.

In June 2001, the federal defendants moved to dismiss Apotex's amended complaint for failure to state a claim upon which relief could be granted. The district court granted the federal defendants' motion, holding that the there is no cause of action against the FDA to de-list a patent from the Orange Book. The Federal Circuit agreed, finding that the Hatch-Waxman Act does not require the FDA to police the listing process by analyzing whether the patents listed by NDA applicants actually claim the subject drugs or applicable methods of using those drugs.

Pharmacy That Compounded Drugs Not a 'Manufacturer'

Pharmacies or pharmacists will not be held strictly liable as drug manufacturers when, based on observed prescribing patterns, they compound two or more drug products into a single product in anticipation of receiving valid prescriptions from patients, absent evidence that this activity was conducted on a large scale. Schaerrer v. Stewart's Plaza Pharmacy Inc., No. 20010471, 2003 UT 43; 2003 Utah LEXIS 105 (4th Dist., Provo Dept. 10/21/03).

In 1995, plaintiff was prescribed fenfluramine to be taken three times per day and phentermine to be taken once a day as a weight-loss measure. Between November 1996 and June 1997, plaintiff filled five prescriptions for fenfluramine and phentermine from her pharmacy, but switched pharmacies when she learned of a one-a-day fen-phen capsule that was available from the defendant Stewart's Plaza Pharmacy. The one-a-day capsule was formulated by Stewart Koeven, a pharmacist and the proprietor of the pharmacy, who compounded raw fenfluramine, phentermine, methylcellulose (as a time-release agent), and lactose (as a filler). After creating his one-a-day fen-phen capsule, Koeven distributed samples of it to local physicians for experimental use with their patients. Eventually, Stewart's began receiving and filling prescriptions for the one-a-day fen-phen capsule. Koeven testified that neither he nor Stewart's Plaza Pharmacy ever tested the safety or efficacy of the compounded drug.

Plaintiff allegedly suffered side effects from the drug and eventually required open-heart surgery to repair two damaged heart valves. She brought suit against several defendants, including the pharmacy and pharmacist. On Stewart's motion for summary judgment, the trial court found that a reasonable jury could find that Stewart's acted as a manufacturer rather than a pharmacist and could therefore be subject to strict liability. Thus, the motion to dismiss was denied. Stewart's, however, filed a second motion for summary judgment based on the indemnity provisions of plaintiff's settlement with one of the drug's manufacturers. The court granted that motion, and plaintiff appealed.

The appellate court affirmed the district court's decision to dismiss plaintiff's claims, although on different grounds. It extended the learned intermediary rule to exempt pharmacies from strict products liability when they properly fill a physician's prescription and held that a pharmacy collaborating with local physicians to develop a unique compounded product aimed at improving patient compliance, which is distributed according to prescription, cannot be re-classified as a drug manufacturer and held strictly liable for the compounded drug product. Even if the pharmacy produces the compounded drug product before receiving a prescription, the size and scale of the pharmacy's compounding practice is one of the most important indicators of improper “manufacturing” conduct. In this case, no evidence was presented concerning the overall scope of Stewart's practice, nor of the proportion of that practice committed to compounding the one-a-day fen-phen, so the court found that no indication from the record that Stewart's was conducting a large-scale, speculative, compounding business similar to that of a commercial pharmaceutical drug manufacturer.

Although It Met FDA Requirements, Label May Have Been Inadequate

Even though the FDA at the time of plaintiff's injury did not require the label on the drug prescribed to her to carry warnings about the potential for tendon injury, plaintiff's allegation that the drug's manufacturer knew of such potential and withheld that information was enough for her suit to survive a motion for summary judgment. Garfinkel v. Bayer Corp., N.Y.L.J. 11/16/03, Pg. 17 (Sup. Ct., IA Part 47, N.Y. Cty.).

Plaintiff, a 65-year-old woman, alleged that she sustained multiple ruptures of the Achilles tendon when she tripped while climbing temple steps at Angkor Wat in Cambodia, in 1995. According to plaintiff, this rupture occurred after the ingestion of a 10-day course of the antibiotic Ciprofloxacin Hydrochloride sold by Bayer under the name of Cipro', which was prescribed for her in October 1994 to combat a severe case of chronic sinusitis. Plaintiff had a history of heel pain and of Achilles tendon calcifications that were treated with steroids.

Defendant Bayer sought summary dismissal of plaintiff's product liability personal injuries claims, arguing that prescribing information required by the FDA did not associate Cipro' with tendonitis or tendon rupture at the time of plaintiff's injury. Plaintiff alleged that, since 1993, French regulators have required that companies selling fluoroquinolones (including Cipro') include a warning about possible tendon injury in the French physician's desk reference. The court denied summary dismissal, finding that plaintiff raised an issue as to whether her injuries could be directly tied to Cipro' use, and Bayer failed to present conclusive evidence that certain changes to tissue removed from plaintiff's heel resulted from repeated steroid injection, age, use of other drugs or other factors unrelated to plaintiff's Cipro' use. In addition, the fact that the FDA did not require drug manufacturers to warn of the possibility of tendon ruptures until after plaintiff's injury did not automatically absolve Bayer of all liability here since plaintiff alleged that Bayer or its predecessor knew of but withheld such information and delayed reporting it.