Ranbaxy Labs. Inc. v. First Databank, Inc.

• Decision Date: 24 June 2016
• Docket Number: No. 15-12996,15-12996
• Citation: 826 F.3d 1334
• Court: U.S. Court of Appeals — Eleventh Circuit
• Parties: Ranbaxy Laboratories Inc., Plaintiff–Appellant, v. First Databank, Inc., Defendant–Appellee.

826 F.3d 1334

Ranbaxy Laboratories Inc., Plaintiff–Appellant

v.First Databank, Inc., Defendant–Appellee.

No. 15-12996

United States Court of Appeals, Eleventh Circuit.

June 24, 2016

Jay P. Lefkowitz, Nathaniel J. Kritzer, Joseph Serino, Jr., Kirkland & Ellis, LLP, New York, NY, John A. DeVault, III, Michael E. Lockamy, Bedell Dittmar DeVault Pillans & Coxe, Jacksonville, FL, for Plaintiff–Appellant.

Jonathan Donnellan, Diego Ibarguen, Ravi Viren Sitwala, Stephen Yuhan, Hearst Corporation, Office of General Counsel, New York, NY, Timothy J. Conner, Jennifer Anne Mansfield, Holland & Knight, LLP, Jacksonville, FL, for Defendant–Appellee.

Before WILLIAM PRYOR, ANDERSON, and PARKER,^* Circuit Judges.

PARKER, Circuit Judge:

Plaintiff-Appellant, the pharmaceutical company Ranbaxy Laboratories Inc., seeks money damages and injunctive relief for alleged misrepresentations made by Defendant-Appellee First Databank, Inc. (“FDB”), a company that publishes a drug information database for use by pharmacies across the United States. Ranbaxy alleges that FDB's database, MedKnowledge, falsely represents that Ranbaxy's acne drug Absorica is non-unique. After expedited discovery on the issue of falsity, the district court granted summary judgment in favor of FDB, concluding that FDB did not publish any false statements about Absorica. Because we agree that Ranbaxy has not raised a genuine issue of material fact with regard to falsity, we affirm the order and judgment of the district court.

I. BACKGROUND

A. Absorica

Ranbaxy is the manufacturer of Absorica, an Isotretinoin-based product used to treat serious acne and other skin diseases. Although Absorica shares many features with other generic acne treatments, it is unique in that it is effective even if taken without meals (in a “fasted state”).

The FDA issues a publication called the “Orange Book,” which is used by pharmacists in many states to help identify which drugs are interchangeable with other drugs. The Orange Book provides a wide range of information about drugs approved by the FDA, but only two metrics are relevant here: pharmaceutical equivalence and therapeutic equivalence. Two drugs are 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.” App. 74-8 at vi–vii. The Orange Book designates Absorica as pharmaceutically equivalent to several other Isotretinoin-based acne medications. By contrast, two drugs are therapeutic equivalents if “they are pharmaceutical equivalents and if they can be expected to have the same clinical effect and safety profile when administered to patients under the conditions specified in the labeling.” App. 74-8 at vii. Because of Absorica's unique effectiveness when taken in a fasted state, the Orange Book has given Absorica a “BX” rating, which indicates that no drugs are therapeutically equivalent to Absorica.

The Orange Book is used in many states as the authoritative source for determining whether a pharmacist may substitute a prescribed drug with a cheaper generic version. In “Orange Book states,” pharmacists may only substitute a drug for another if the two drugs are designated by the Orange Book as being therapeutic equivalents. However, in “non-Orange Book states,” pharmacists are not required to consult the Orange Book (though they may choose to do so), and instead make substitution decisions by relying on their own professional judgment and the information provided by their companies' software programs.

B. MedKnowledge Database

FDB publishes the MedKnowledge database, which is a collection of information about various drugs for use by pharmacies when they fill prescriptions. MedKnowledge is a raw data file—it is not organized in a way that is meaningful or useful to pharmacists at local drug stores. Instead, FDB sells subscriptions to the MedKnowledge database to customers who then develop software that sorts and organizes the raw data into a display format usable by pharmacists. MedKnowledge provides thousands of fields for each drug, with each field populated with a coded piece of information. For example, in one field that relates to the Orange Book's therapeutic equivalence designation, Absorica is marked as “BX,” indicating it has no therapeutic equivalent. FDB's customers choose which data to display to pharmacists and how to display it. FDB has no control over how the information is displayed to the pharmacists issuing prescriptions.

Because MedKnowledge is merely a collection of thousands of coded data fields, FDB provides its customers with access to the MedKnowledge user documentation. Reference to the documentation is necessary to understand the various fields of coded data, many of whose meaning is not self-evident. FDB customers can retrieve the documentation, which is nearly 4,000 pages long, by either requesting a CD of the documentation or downloading it from FDB's website.

Ranbaxy's complaint concerns two pieces of data published in the MedKnowledge database. First, each drug is assigned a 5-digit Clinical Formulation ID. Several drugs may be assigned the same Clinical Formulation ID if they have the same active ingredients, route, dosage form, and strength (the same factors considered in determining pharmaceutical equivalence). The MedKnowledge documentation indicates that “[a]lthough 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.” App. 74-2 at 5. Elsewhere, however, the documentation indicates that FDB may assign a unique Clinical Formulation ID to a drug with pharmaceutical equivalents if the drug has a clinically unique dosage form that is not accounted for in the Orange Book. For example, while the Orange Book groups all drugs taken as a tablet under a single dosage form, FDB has twenty-five different dosage forms for tablets. Thus, two drugs identified as pharmaceutically equivalent by the Orange Book might still have different Clinical Formulation IDs if their dosage forms differ in a way recognized by FDB, but not the FDA. Although FDB employs substantially more dosage forms than the FDA, it does not have a dosage form relating to whether a drug may be taken in a fasted state. Absorica thus shares its Clinical Formulation ID with several other Isotretinoin-based acne medications.

Ranbaxy protests that because the MedKnowledge documentation indicates that “new dosage forms are added when the clinical uniqueness of a novel dosage form has been established,” App. 74-2 at 3, the assignment of a non-unique Clinical Formulation ID to Absorica falsely represents that Absorica does not have a clinically unique dosage form, thereby misleading pharmacists into believing that Absorica is substitutable with other acne medications. Ranbaxy specifically points to testimony from FDB's corporate representative that “differences in absorption when a product is taken in the fed or fasted state” may be a sign of clinical uniqueness. App. 74-11 at 27.

The second piece of data challenged by Ranbaxy is Absorica's designation in the Multi-Source/Single Source Indicator (NDCGI1) field as a “multi-source” drug. The MedKnowledge documentation explains that this field “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 [ (single source) ] or from multiple labelers [ (multi-source) ].” App. 74-2 at 6. The documentation goes on to state that “[p]roducts that have the same clinical formulation are not necessarily therapeutically equivalent.” App. 74-2 at 6. But Ranbaxy's expert testified that, contrary to the definition offered in the MedKnowledge documentation, “multi-source” is a term of art in the pharmaceutical industry used to indicate that a drug has a therapeutic equivalent. Thus, a pharmacist who sees Absorica designated as “multi-source” may erroneously conclude that Absorica has therapeutic equivalents that may be offered as cheaper substitutes.

Ranbaxy admits that, in Orange Book states, there is no risk of confusion because pharmacists there are required to consult the Orange Book code before offering a substitute for a drug, and Absorica's BX rating, accurately notated in the MedKnowledge database, indicates that it has no therapeutic equivalent. Ranbaxy contends, however, that in non-Orange Book states, a pharmacist might not consult the Orange Book code for Absorica, and instead will see its non-unique Clinical Formulation ID or its multi-source designation and wrongly conclude that other generic acne drugs may be safely substituted for Absorica.

C. Procedural History

After Ranbaxy brought this action, FDB moved to dismiss the complaint, transfer venue, and strike the complaint pursuant to California's anti-SLAPP statute, which allows courts to dismiss actions seeking to restrain speech unless the plaintiff demonstrates a probability of success on the merits. The district court denied all three motions. The parties then agreed on an expedited discovery schedule limited to the issue of falsity. Following completion of limited discovery, FDB moved for summary judgment on the ground that there was no genuine issue of material fact as to falsity. The district court granted the motion, reasoning that “[n]o reasonable reader of MedKnowledge's data would consider these statements ‘false’ or ‘reasonably capable of a defamatory interpretation.’ ” Ranbaxy Labs. Inc. v. First Databank, Inc. , No. 3:13–cv–859, 2015 WL 3618429, at *12 (M.D. Fla. June 9, 2015)

. The court agreed with FDB that “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.” Id.

Ranbaxy appealed.

II. STANDARD OF...