TIMOTHY J. CORRIGAN, District Judge.
Ranbaxy Laboratories, Inc. thinks its acne drug Absorica is one of a kind. After First Databank, Inc. published statements in its drug database that Ranbaxy believed falsely portrayed that Absorica is not unique, Ranbaxy sued for trade libel and tortious interference with business relations. (Doc. 1). FDB moved to dismiss the Complaint, arguing in part that its statements were not false. (Doc. 12). The Court denied the motion to dismiss but provided for an initial discovery period dealing only with the issue of falsity. (Doc. 61). FDB then moved for summary judgment, contending that its statements were not false (Doc. 73; Doc. 74; Doc. 79), and Ranbaxy responded (Doc. 80; Doc. 81; Doc. 82). The Court heard oral argument on April 24, 2015, and the transcript of that hearing is incorporated herein.
First Databank, Inc. ("FDB") publishes MedKnowledge, a database that contains clinical, pricing, and drug descriptor information on a variety of drug products, including prescription drugs. (Doc. 74-6 at 2).
Amongst other reasons, users may seek to use MedKnowledge's data to discover drugs that are pharmaceutically or therapeutically equivalent. "Drug products are considered pharmaceutical equivalents if they contain the same active ingredient(s), are of the same dosage form, route of administration and are identical in strength or concentration. . . ." (Doc. 74-8 at 7-8). To be therapeutic equivalents, drugs must be pharmaceutical equivalents and they must "be expected to have the same clinical effect and safety profile when administered to patients under the conditions specified in the labeling." (Doc. 74-8 at 8). Drugs that are therapeutic equivalents therefore can generally be substituted for each other.
One measure of therapeutic equivalence is found in the "Orange Book," published by the FDA. (Doc. 74-13 at 14 pg. 47-48). The Orange Book only evaluates "multisource prescription drug products" for therapeutic equivalence. (Doc. 74-8 at 12). In doing so, it provides a two letter code, with the first letter representing whether the drug is therapeutically equivalent to other products. (Doc. 74-8 at 14). Drugs with therapeutic equivalents have codes starting with an A, while drugs without therapeutic equivalents have codes starting with a B. (Doc. 74-8 at 14).
Ranbaxy manufactures Absorica, an isotretinon-based drug used to treat severe acne. (Doc. 81-1 at 3). Absorica is pharmaceutically equivalent to other isotretinoin-based medicines, such as Accutane. (Doc. 74-23 at 2). However, it does not have any therapeutic equivalents because it is more bioavailable than other isotretinoin-based medicines when taken during a fasted state (on an empty stomach). (Doc. 74-9 at 9). This means that, compared to another isotretinoin-based medicine when both are taken without food, Absorica allows more of the isotretinoin to be absorbed into the bloodstream. As such, the Orange Book gives Absorica a rating of BX (Doc. 74-8 at 30), meaning that there is not sufficient evidence to find that the drug has any therapeutic equivalents (Doc. 74-8 at 21). In some states, referred to as "Orange Book states," pharmacists are barred from substituting drugs that are not A-rated. (Doc. 74-13 at 7-8 pgs. 21-22). Other states, however, do not necessarily follow the Orange Book. (Doc. 74-13 at 8 pg. 22). Some of these "non-Orange Book" states may permit pharmacists to substitute other isotretinoin-based drugs for Absorica.
MedKnowledge reports Absorica's BX rating. (Doc. 74-7 at 2).
The parties disagree on the applicable law, with Ranbaxy contending that Florida law applies and FDB arguing that either California or New Jersey law applies. (
Ranbaxy's claims are for trade libel and tortious interference with business relations. (Doc. 1 at 10-13). Under Florida and New Jersey law, trade libel requires the publication of a false statement.
In determining whether a statement is false, courts consider how a reasonable person would interpret it.
The parties appear to agree on this analysis. The sole disagreement on the law is FDB's contention that a trade libel claim cannot be based on an inference. (Doc. 73 at 21 n.5). FDB cites to
As the Court noted in its Order on FDB's motion to dismiss, this case is similar to a case brought by Schering Corporation against FDB, alleging that FDB disseminated false information about an asthma medication Schering manufactured.
Schering moved to preliminarily enjoin FDB from publishing that information.
Ten days later, the court considered FDB's motion to strike the complaint under California's anti-SLAPP statute.
Both parties point to
MedKnowledge provides a Clinical Formulation ID, also known as a GCN_SEQNO, for Absorica's 10 mg capsule (36045), 20 mg capsule (36046), 30 mg capsule (53055), and 40 mg capsule (36047). (Doc. 74-7 at 2). In each case, the Absorica capsule shares a Clinical Formulation ID with at least one other drug. (Doc. 74-7 at 2). FDB provides "user documentation" to its MedKnowledge customers, which explains the meaning of the terms used in the database. (Doc. 74-1 at 3). The documentation states that a Clinical Formulation ID "is specific to generic ingredient(s), drug strength(s), dosage form, and route of administration." (Doc. 74-2 at 22). Thus, drugs only have the same Clinical Formulation ID where they have the same active ingredient, drug strength (referring to the potency of the drug in metric units), dosage form (such as tablet or capsule), and route of administration (such as oral, injection, or topical). (Doc. 74-2 at 25).
The Clinical Formulation ID does more than merely parrot the FDA's determination of whether drugs are pharmaceutically equivalent. FDB's director of editorial services, Julie Suko, testified that, while products that the FDA considers pharmaceutically equivalent will generally have the same Clinical Formulation ID, FDB will create a new Clinical Formulation ID where "it's clinically necessary, clinical uniqueness is required. . . ." (Doc. 74-11 at 46 pg. 175). The MedKnowledge documentation states that determination of a dosage form is based on the delivery method, release mechanism, and "[c]linical uniqueness, including, but not limited to, side effects, indications, contraindications[,] and conditions which may impact patient education and label warnings. . . . [N]ew dosage forms are added when the clinical uniqueness of a novel dosage form has been established." (Doc. 74-2 at 3).
For example, a February 1996 newsletter explained this distinction by presenting the example of two theophylline tablets that were assigned different Clinical Formulation IDs "because one of the products was approved for nocturnal asthma and must be taken between 6pm and 8pm, with dinner . . . [and] [t]he other theophylline product is taken in the morning and may be taken without regard to meals." (Doc. 74-25 at 4). The products were given different Clinical Formulation IDs because of the difference in the time of day at which they were to be taken, not because one drug needed to be taken with food and the other did not. (Doc. 74-11 at 28 pg. 102-103). However, FDB's readers may not have known that its database lacks a dosage form related to food (
The MedKnowledge user documentation warns that giving two drugs the same Clinical Formulation ID "should not be understood to mean that they are therapeutically equivalent." (Doc. 74-2 at 22). Thus, while the Clinical Formulation ID "can be used to develop a list of candidates for substitution, these candidates are only pharmaceutically equivalent; it is not sufficient to determine therapeutic substitutability." (Doc. 74-2 at 5). Accordingly, users are instructed that, when using the Clinical Formulation ID to determine substitutability, they "must [i]nclude a check against Orange Book Codes" as well as provide for compliance with state laws. (Doc. 74-2 at 5). The documentation states that "FDB does not determine therapeutic equivalency. . . ." (Doc. 74-2 at 22). FDB's licensing agreements also contain a standard term requiring licensees to use reasonable commercial efforts to require end users to prominently display a drug's Orange Book code and, as long as commercially reasonable, the Therapeutic Equivalence Indicator whenever it displays or otherwise uses the Clinical Formulation ID as a tool for dispensing. (Doc. 74-1 at 4; see Doc. 79-15 at 9).
FDB's documentation states that it creates a new dosage form "when the clinical uniqueness of a novel dosage form has been established." (Doc. 74-2 at 3).
Nevertheless, Ranbaxy asserts that FDB's assignment of the same Clinical Formulation IDs to Absorica and other drugs "falsely indicates that Absorica is not clinically unique." (Doc. 80 at 9). Inconsistent with its prior communications with FDB, Ranbaxy now asserts that Absorica requires a different dosage form, and therefore a different Clinical Formulation ID, because it is clinically unique in that it "is specially formulated to be therapeutically effective when taken without food, while other isotretinoin products require high fat meals to be effective."
But FDB has never used differences in a drug's performance when taken with or without food to create a unique Clinical Formulation ID. (Doc. 74-11 at 18-19 pg. 65-66). Indeed, none of the fields in MedKnowledge, including the dosage form, inform the reader whether a drug has to be taken without food. (Doc. 74-11 at 22). In considering "clinical uniqueness" FDB looks to its clinical modules, specifically "side effects, indications, dosing, [and] contraindications." (Doc. 74-11 at 21 pg. 76). None of those relate to whether a product has to be administered with food. (Doc. 74-11 at 21 pg. 77).
While that may establish that Absorica should not be given a unique dosage form under FDB's practices, it does not necessarily decide whether the assignment of the same Clinical Formulation ID to Absorica as to other drugs is susceptible to a defamatory interpretation. To answer that question, the Court must look to the database itself and the documentation. The documentation makes clear that the determination of dosage form depends on the drug's delivery method, release mechanism, and "[c]linical uniqueness, including, but not limited to, side effects, indications, contraindications[,] and conditions which may impact patient education and label warnings. . . ." (Doc. 74-2 at 3). No reasonable reader would understand any of those criteria to relate to whether a drug should be taken with food.
In lieu of any evidence that FDB tells readers it creates new dosage forms for drugs based on whether they should be taken with food, Ranbaxy's argument seems to be that a reasonable reader could understand FDB's statement that it provides a new dosage form when "clinical uniqueness" requires to mean that it provides a new dosage form whenever a drug does not have a therapeutic equivalent.
The newsletters state that a Clinical Formulation ID "can be used to identify [drugs] with the same Ingredients, Strengths, Dosage Forms, and Routes."
Ranbaxy next argues that Absorica's Clinical Formulation ID is false because customer inquiries indicate that FDB's customers understand drugs with the same Clinical Formulation ID to be therapeutically equivalent. MedKnowledge users may contact FDB with questions about the meaning of any data field in the database and about the proper ways to use data elements. (Doc. 74-1 at 4). Since Absorica was first listed in MedKnowledge in November 2012, FDB has received over 20,000 inquiries from customers about the database. (Doc. 74-1 at 4-5). Just five of those questions dealt with Absorica's substitutability.
First, Cardinal Health asked whether Absorica should "be in the same GCN
Interestingly, none of these inquiries refers to Absorica's Clinical Formulation ID. The questions do show both that some FDB customers understand that Absorica is not therapeutically equivalent to other drugs (which is true) and that they are uncertain as to how Absorica should be listed in MedKnowledge given that information. They do not, however, indicate that a reasonable reader interprets drugs with the same Clinical Formulation ID to be therapeutically equivalent.
Ranbaxy also objects to FDB's responses to the inquiries, calling them contradictory and misleading. (Doc. 80 at 12). FDB's responses to the customer inquiries are inconsistent. FDB told Cardinal Health that "Clinical Formulation identity is not to be understood as a representation of pharmaceutical equivalence or substitutability. . . ." (Doc. 81-2 at 2). In responding to HP-Arkansas Medicaid, however, FDB said that it assigns products "to a Clinical Formulation ID (GCNSEQNO) or Formulation ID (GCN) . . . consistent with the FDAs definition of pharmaceutical equivalence in the Orange Book." (Doc. 81-2 at 2). FDB's responses are therefore unclear as to whether drugs with the same Clinical Formulation ID are even pharmaceutically equivalent. In response to each inquiry, however, FDB explained that it groups products by active ingredient, drug strength, dosage form, and route of administration, and that such a grouping does not mean that the drugs are interchangeable. (Doc. 81-2 at 2). None of FDB's responses suggested that Clinical Formulation IDs contained information about therapeutic equivalence.
MedKnowledge's user documentation expressly states that the assignment of the same Clinical Formulation ID to two products "should not be understood to mean that they are therapeutically equivalent." (Doc. 74-2 at 22). When testifying in other cases, FDB representatives have stated that the assignment of a Clinical Formulation ID is not a representation of therapeutic equivalence.
MedKnowledge lists each version of Absorica as having a Multi-Source/Single Source Indicator (NDCGI1) of 1. (Doc. 74-7 at 2). This means that Absorica is considered to be a multi-source drug under that categorization. (Doc. 74-2 at 6). The only information FDB publishes to explain the meaning of a multi-source designation is its user documentation. (Doc. 74-11 at 41). The documentation states that the Multi-Source/Single Source Indicator "specifies whether a product's clinical formulation (i.e., its particular active ingredient, dosage form, route of administration and strength) is only available from a single labeler or from multiple labelers." (Doc. 74-2 at 6). The documentation recommends that readers refer to the Therapeutic Equivalence Indicator for a determination of therapeutic equivalence, as it explains that "[p]roducts that have the same clinical formulation are not necessarily therapeutically equivalent." (Doc. 74-2 at 6). The Therapeutic Equivalence Indicator shows that Absorica is not therapeutically equivalent to other drugs. (Doc. 74-7 at 2).
Nevertheless, Ranbaxy contends that the reasonable reader could understand FDB's identification of Absorica as multi-source to indicate that the drug is therapeutically equivalent to other isotretinoin-based drugs. (Doc. 80 at 14). Ranbaxy first contends that the reasonable reader cannot be expected to have read the user documentation because a DVD containing the documentation is only sent to subscribers upon request and the documentation is too long to read in any event. (Doc. 80 at 17). Despite Ranbaxy's arguments to the contrary, the documentation is easily accessible. There is no need for customers to request the documentation on disk form because it is available to all FDB customers through FDB's "online community." (Doc. 74-10 at 13 pg. 44). While the documentation is exceedingly long, so long, in fact, that FDB's corporate representative admitted she had never read it in its entirety and was not familiar with its full contents, (Doc. 74-11 at 20 pg. 72), the question is not whether a reasonable reader of the database would have read the entire documentation, but whether a reasonable reader who saw Absorica's multi-source indicator "NDCGI1:1" would also have looked up the portion of the documentation dealing with the multi-source designation and its meaning. That they could easily do, despite the length of the documentation, as a search for the term "multi-source" or "NDCGI1" quickly leads to the portion explaining what the indicator represents.
Moreover, reference to the documentation is necessary to begin with for a reader to understand that the database is providing information about a drug's multi-source status. A reader looking at the database would only see something like "NDCGI1: 1" without any explanation of what that means. At oral argument, Ranbaxy's counsel said that it was his "working assumption" that someone would see an NDCGI1 of 1 and know that that information meant the drug was multi-source. The only support he gave for that assumption, however, were the customer inquiries previously discussed, none of which mentioned an NDCGI1 or a multi-source designation.
Ranbaxy next argues that the documentation acts as a mere disclaimer, which is insufficient to absolve a publisher of liability. (Doc. 80 at 17). A speaker may not necessarily absolve himself from liability for defamation by indicating that his previous statements may not be true.
The heart of Ranbaxy's argument is its contention that the word "multi-source" has an established meaning in the pharmacy industry, by which definition Absorica is not multi-source. (Doc. 80 at 14-16). Ranbaxy's expert, Daniel Bruchwalski, testified that the term multi-source has a commonly understood meaning amongst pharmacists, who consider multi-source products to be therapeutically equivalent and substitutable. (Doc. 74-12 at 3). Because Absorica's FDA-approved prescribing information indicates that it is not interchangeable with other isotretinoin-based products, Bruchwalski believes that it is incorrect for FDB to list Absorica as multi-source. (Doc. 74-12 at 6).
Bruchwalski bases his belief in the established meaning of the term on his "experience in the industry and . . . understanding of how [multi-source] is used and understood in the industry." (Doc. 74-13 at 25 pg. 92). Asked if he could point to any support for his claim that his definition of multi-source was the commonly understood definition, he said, "Documented, no. But that's been the practice that I've understood in pharmacy practice management systems and the field for years." (Doc. 74-13 at 25 pg. 93).
Despite his insistence on the established meaning of the term multi-source, Bruchwalski admits that the FDA's Orange Book uses the term multi-source in a different way. (Doc. 74-13 at 25 pg. 93). Indeed, the FDA only evaluates for therapeutic equivalence "multisource prescription drug products . . . which in most instances means those pharmaceutical equivalents available from more than one manufacturer." (Doc. 74-8 at 12). Therefore, by evaluating Absorica for therapeutic equivalence, the FDA indicated that Absorica is a multi-source drug. Thus, Ranbaxy simultaneously argues that the FDA's view on therapeutic equivalence and substitutability are so authoritative as to render its finding that Absorica has no therapeutic equivalent a "fact" and that the FDA is so out of touch that it uses a definition of multi-source that differs from the way the phrase is always used and understood in the field.
In support of Bruchwalski's definition, Ranbaxy cites to a number of uses of "multi-source" and "multiple source" in statutes, websites, and drug manuals, some of which use the term to mean that a drug has therapeutic equivalents and others of which define the term to mean a drug that is sold by two or more manufacturers. (
Nevertheless, though skeptical, because the Court must view all evidence in favor of the non-moving party at summary judgment, the Court assumes that "multi-source" is a term of art in the pharmaceutical industry, where it means that a drug is therapeutically equivalent to other drugs and is substitutable. But FDB's documentation makes clear that it does not employ that "conventional" definition, and therefore does not use the term to mean that the drugs are therapeutically equivalent and substitutable. Bruchwalski agreed that FDB's documentation does not use his definition of multi-source. (Doc. 74-13 at 25 pg. 93). Any user who consulted the documentation, which he would have to do to learn what an NDCGI1 of 1 means, would see that the Multi-Source/Single Source Indicator does not show whether the drug is multi-source in Bruchwalski's "established" sense, but instead shows whether a product's clinical formulation is available from multiple labelers. (Doc. 74-2 at 6).
Further, MedKnowledge includes at least four indicators of whether a drug is multi-source or single-source, including the HCFA_DC in which Absorica is rated single source.
A reasonable reader would be aware that Absorica is both rated single-source and multi-source, depending on the context, and that the documentation explains that the NDCGI1 does not indicate therapeutic equivalence. Therefore, even assuming that multi-source has the "established" meaning offered by Dr. Bruchwalski, no reasonable reader would understand Absorica's NDCGI1 of 1 to mean the drug is therapeutically equivalent to other isotretinoin-based drugs. As a matter of law, FDB's publication of Absorica's NDCGI1 of 1 is not reasonably capable of a defamatory interpretation.
The facts of this case are largely undisputed and, where they are not, the Court has viewed the evidence in the light most favorable to Ranbaxy. Given the undisputed content of the allegedly false publication, the Court has "a `prominent function' in determining whether a statement is defamatory, and if a statement is not capable of a defamatory meaning, it should not be submitted to a jury."
A more typical trade libel case involves a defendant's alleged false or disparaging statement about the quality of a competitor's product.
Ultimately, this is just a disagreement between Ranbaxy and FDB about the proper characterization and placement of Absorica in the MedKnowledge database. But such a disagreement is not the stuff of a trade libel claim.
Accordingly, it is hereby
Defendant's Motion for Summary Judgment (Doc. 73) is