Provepharm, Inc. v. Akorn, Inc.
| Decision Date | 11 June 2019 |
| Docket Number | 17-CV-7087(SJF)(AKT) |
| Parties | PROVEPHARM, INC., Plaintiff, v. AKORN, INC., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
I. Introduction
On December 5, 2017, plaintiff Provepharm, Inc. ("plaintiff" or "Provepharm") commenced this action against defendant Akorn, Inc. ("defendant" or "Akorn"), seeking, inter alia, damages and injunctive relief for Akorn's allegedly false advertising of its methylene blue product in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and Section 350(e)(3) of the New York General Business Law; unfair competition in violation of Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), and the common law; and deceptive trade practices in violation of Section 349(h) of the New York General Business Law.1 Issue was joined by the service of an answer on behalf of Akorn on or about February 5, 2018. On August 27, 2018, Akorn served an amended answer, inter alia, asserting two (2) counterclaims against Provepharm seeking damages and injunctive relief for Provepharm's alleged monopolization and attempted monopolization of the methylene blue market in the United States in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. Pending before the Court, inter alia, are Provepharm's motion to dismiss Akorn's counterclaims in their entirety pursuant to Rule12(b)(6) of the Federal Rules of Civil Procedure for failure to state a claim for relief; and Akorn's motion pursuant to Rule 15(a)(2) of the Federal Rules of Civil Procedure to amend its counterclaims. For the reasons set forth below, Provepharm's motion to dismiss is denied and Akorn's motion to amend is granted.
II. Background
This case concerns the drug methylthioninium chloride, also known as methylene blue, , which was originally developed in the nineteenth (19th) century and has been used clinically as both a dye and a medication to treat a variety of conditions, including methemoglobinemia. . Methemoglobinemia is a rare and life-threatening disorder in which blood cells produce an abnormal amount of methemoglobin, which is a modified form of hemoglobin. (Compl., ¶ 12; Am. Ans., ¶ 12; see also Countercl., ¶ 8; PAC, ¶ 8). Since the hemoglobin in patients with methemoglobinemia cannot effectively release oxygen to body tissues, those tissues may be deprived of an adequate oxygen supply, leading to tissue hypoxia. (Compl., ¶ 13; Am. Ans., ¶ 13). Thus, patients with methemoglobinemia can experience cardiac, pulmonary, and neurological symptoms; and, in severe cases, death. (Compl., ¶ 13; Am. Ans., ¶ 13). Patients with acquired methemoglobinemia can be treated by delivering a solution of methylene blue intravenously, thereby restoring the iron in hemoglobin to its normal oxygen-carrying state. (Compl., ¶ 14; Am. Ans., ¶ 14; see also Countercl., ¶ 8; PAC, ¶ 8).
Although the only use for methylene blue that is approved by the United States Food and Drug Administration ("FDA") is for the treatment of methemoglobinemia, "today methylene blue is used by healthcare providers for a multitude of unapproved indications, for example as an antidote for cyanide poisoning, and is often a component in other medications." (Countercl., ¶ 8; PAC, ¶ 8).
On its website, Akorn describes itself as "a niche pharmaceutical company that develops, manufactures and markets generic and branded prescription pharmaceuticals as well as animal and consumer health products[,] . . . [which] specialize[s] in difficult-to-manufacture sterile and no-sterile dosage forms including: ophthalmics, injectables, oral liquids, optics, topicals, inhalants, and nasal sprays." (Compl., ¶ 33; Am. Ans., ¶ 33). Akorn originally began marketing methylene blue in 2009. (Compl., ¶ 34; Am. Ans., ¶ 34).
Provepharm is a competitor of Akorn in connection with the sale of methylene blue injection products in the United States. (Countercl., ¶ 4; PAC, ¶ 4).
Until 2016, all companies that manufactured and sold methylene blue did so under a "grandfather" status, which exempts pre-existing drugs meeting certain criteria from the requirements: (i) of having an approved New Drug Application ("NDA") under legislation enacted in 1938; and (ii) of proving effectiveness under legislation enacted in 1962. (Countercl., ¶¶ 9-11; PAC, ¶¶ 9-11). Akorn sold its methylene blue products in the United States under this "grandfather" status for decades. (Countercl., ¶¶ 11, 31; PAC, ¶¶ 11, 36).
Provepharm, whose parent companies are based in France, "developed a process to manufacture a purer form of methylene blue" that would comply with the stricter limitations for metal catalyst impurities adopted by European regulatory bodies, and "obtained several patents purportedly covering their manufacturing process for the purer form of methylene blue" (the"Methylene Blue Patents"). (Countercl., ¶ 14; PAC, ¶ 14; see also Declaration of Kathy Grant ["Grant Decl."], Ex. 6-83).
In 2011, Provepharm obtained approval from the European Medicines Agency to market its methylene blue product in Europe, (Countercl., ¶ 15; PAC, ¶ 16); and sought to obtain FDA approval of an NDA to market a "drug product in which methylene blue is the active pharmaceutical ingredient ('API')" under Section 505(b)(2) of the Food, Drug, and Cosmetic Act ("FDCA"). (Countercl., ¶¶ 16-17; PAC, ¶¶ 16-18). Provepharm ultimately obtained FDA approval for its drug product, ProvayBlue® methylene blue injection USP ("ProvayBlue®"), on April 8, 2016. (Compl., ¶ 1; Am. Ans., ¶ 1; Countercl., ¶ 17; PAC, ¶ 18). According to Akorn, "[a]fter Provepharm obtained approval for ProvayBlue®, Akorn and others cannot market methylene blue in the United States unless they file and obtain approval of their own NDA or otherwise received exemptions from such requirements from FDA." (Countercl., ¶ 31; PAC, ¶ 36).
In approving Provepharm's NDA, the FDA also awarded ProvayBlue® Orphan Drug Exclusivity ("ODE")4 for the treatment of pediatric and adult patients with acquired methemoglobinemia. (Countercl., ¶¶ 19, 21; PAC, ¶¶ 20, 22). ODE runs for a period of seven (7) years, during which the FDA "will not approve any other NDAs for the same API for the same condition." (Countercl., ¶ 19; PAC, ¶ 20). However, the FDA may "approve other NDAs for the same API if they are directed to other conditions and do not include the orphan condition."(Countercl., ¶ 19; PAC, ¶ 20). Thus, although the FDA "cannot approve any other NDAs for the use of methylene blue to treat pediatric and adult patients with acquired methemoglobinemia until April 8, 2023[,] . . . [it can] approve other NDAs for the use of methylene blue for any other indication. . . ." (Countercl., ¶¶ 21, 32; PAC, ¶¶ 22, 37).
However, according to Akorn, "[w]hile Provepharm was obtaining approval from the FDA for ProvayBlue®, it was also soliciting the United States Pharmacopeia ('USP') to revise the official monograph for the API classified as methylene blue" in order to "foreclose any others from pursuing NDAs for the use of methylene blue for other indications."5 (Countercl., ¶ 22; PAC, ¶ 23). Specifically, "[o]n or about May 24, 2013, Provepharm requested that USP revise the criteria for methylene blue API and methylene blue injection, i.e., a sterile solution of methylene blue in water for injection, to include the pentahydrate form of methylene blue—a different hydrate form of methylene blue that purportedly results from Provepharm's manufacturing process—and to change the standardized assay for other hydrate forms." (Countercl., ¶ 22; PAC, ¶ 23; Grant Decl., Ex. 176).
"As a public standards-setting organization, the USP has an express policy of impartiality and of not favoring one manufacturer over another in setting its standards." (Countercl., ¶ 25;PAC, ¶ 26; Grant Decl., Ex. 4-57). According to Akorn, in order "[t]o ensure impartiality and its policy of not favoring any one manufacturer over another, and 'because USP's standards are intended to be public standards available for the use and benefit of all parties, USP requests that sponsors disclose in their Requests for Revision whether any portion of the methods or procedures submitted is subject to patent or other sponsor-held intellectual property rights.'" (Countercl., ¶ 25; PAC, ¶ 27) (quoting Submissions Guideline at Grant Decl., Ex. 4).
Akorn alleges that Provepharm: (i) "violated clear USP rules and policies when it concealed the fact that [it] owned patents for the manufacturing process necessary to produce methylene blue in the form that [it] urged USP to adopt as [the] standard for methylene blue[,]"8 (Countercl., ¶ 28; PAC, ¶ 29); (ii) "falsely asserted that the FDA required the inclusion of Provepharm's proposed methods and specifications[,]" (Countercl., ¶ 29; PAC, ¶ 34); and (iii) "failed to inform USP that the proposed methods and specifications 'required' by the FDA wereoriginally proposed by Provepharm[] . . . [and] that in order to meet the 'required,' proposed specifications using the proposed methods, a company would necessarily need to manufacture methylene blue API using manufacturing processes allegedly covered by [Provepharm's Methylene Blue Patents]." (Countercl., ¶ 29; PAC, ¶ 34).
On July 29, 2016, "USP posted revisions for the methylene blue monographs, which required Provepharm's proposed specifications and assay testing method, and later adopted the revised monographs[,]" as a result of which "no other drug manufacturer can file an NDA having methylene blue API without producing the API in accordance with manufacturing processes allegedly covered by [Provepharm's Methylene Blue Patents]." (Countercl., ¶ 30; PAC, ¶ 35; see also Countercl., ¶ 32; PAC, ¶ 35). Akorn alleges that "as a result of Provepharm successfully petitioning the USP to revise the monographs for...
To continue reading
Request your trial