Allergan Lawsuit Against Restasis Competitor Stays Alive

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By Dana A. Elfin

Allergan USA Inc., the maker of the blockbuster dry eye treatment Restasis, can move forward with a false advertising suit against ophthalmic pharmaceutical company Imprimis Pharmaceuticals Inc.

Allergan’s allegations that San Diego-based Imprimis is misleading consumers and doctors about the lawfulness of its drug compounding business and the safety and efficacy of its compounded eye drugs sufficiently state a claim under the Lanham Act, a federal trial court said.

Judge David O. Carter of the U.S. District Court for the Central District of California issued the order in Allergan’s case Nov. 14 ( Allergan USA Inc. v. Imprimis Pharmaceuticals Inc. , C.D. Cal., No. 8:17-cv-01551-DOC-JDE, order 11/14/17 ).Allergan’s suit against Imprimis highlights the ongoing controversy over drug compounding, the practice of combining, mixing, or altering an existing drug’s ingredients to create medication specifically tailored for an individual patient’s needs. Compounded drugs are often less expensive than mass-produced branded drugs but there are concerns compounded drugs could put patients at risk.

Compounding received national attention in 2013 after contaminated compounded drugs sold by the now-shuttered New England Compounding Center (“NECC”) caused a deadly fungal-meningitis outbreak.

Pricing Issues

In March, Imprimis announced plans to make a cheaper, compounded version of Allergan’s Restasis (cyclosporine), which pulled in $1.4 billion in U.S. sales last year. The product, called Klarity Drops, is a cyclosporine-based formulation designed to treat moderate to severe dry eye. In an October press release, Imprimis said the product was a “customizable and potentially lower-cost alternative” to Restasis.

Imprimis said it would offer initial prescriptions for the compounded dry eye drug for 99 cents for a one-month supply with refills available at $79 per month. That compares with more than $5,000 per year for Restasis, according to Mark L. Baum, Imprimis’ chief executive officer.

Imprimis already makes Dropless Therapy and LessDrops, compounded ocular treatments for after eye surgery, and Simple Drops, a compounded glaucoma eye drop.

Because Allergan alleged its drugs compete with Imprimis’s products and that it has lost sales because of Imprimis’s products, the company sufficiently stated an injury under the Lanham Act, Carter wrote. The federal Lanham Act prohibits the use of false or misleading statements or representations of fact in commercial advertising, and establishes a private remedy for any violations.

Allergan’s claims that Imprimis made false statements it was operating lawfully as a compounder under the FDA’s framework for regulating compounding under the Drug Quality and Security Act of 2013, passed in the wake of the NECC tragedy, also passed muster and weren’t precluded, the judge said.

“Allergan’s factual allegations paint a picture of blatant infringement of the plain statutory language of the FDCA [Food Drug and Cosmetic Act],” the judge wrote.

The court also refused to throw out Allergan’s claims that Imprimis’s statements about the effectiveness of its Dropless Therapy treatment and surgeons’ preference for the product are false and misleading under the Lanham Act. It also allowed Allergan to proceed on its state-law unfair competition claim based on false advertising.

Mark Marmur, Allergan’s director of corporate affairs in Parsippany, N.J., told Bloomberg Law Nov. 16 the company had “no comment beyond the contents of the [court order].”

Imprimis didn’t respond to a request for comment.

To contact the reporter on this story: Dana A. Elfin in Washington at delfin@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

The order is available at http://src.bna.com/ug7.

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