Azurity lawsuit over compounding pharmacy's rival drug revived -court

Used blister packets that contained medicines, tablets and pills are seen, in this picture illustration taken June 30, 2018. REUTERS/Russell Boyce/Illustration
  • 1st Circuit partially revives Azurity lawsuit vs Edge Pharma
  • Govt accused Edge of making drugs in 'unsanitary' conditions

(Reuters) - A federal appeals court ruled that Azurity Pharmaceuticals Inc may pursue a claim that a drug-compounding company sold a "copy" of the drugmaker's FDA-approved antibacterial drug Firvanq using an unapproved ingredient.

The 1st U.S. Circuit Court of Appeals on Friday ruled that the federal Food, Drug and Cosmetic Act did not bar Azurity from pursuing its claim against Edge Pharma LLC.

A lower-court judge last year concluded Azurity's Lanham Act false advertising claims would require her to inappropriately decide whether Edge Pharma violated the FDCA, which only the FDA can enforce.

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But U.S. Circuit Judge David Barron said Azurity's allegations about Edge Pharma's website marketing and use of an unapproved "bulk substance" to make its medication rested on a "clear" provision of the law that needed no FDA interpretation.

The court upheld several of Wilmington, Massachusetts-based Azurity's other claims in its 2020 lawsuit, citing a lack of sufficient allegations.

Azurity's lawyer, James Hulme of Arent Fox, and Edge's attorney, Robert Fluskey of Hodson Russ, did not respond to requests for comment.

The decision came after Colchester, Vermont-based Edge in June agreed to stop selling drugs until it took remedial steps to resolve U.S. government claims it made medications under unsanitary conditions, often in rooms with mold. Edge did not admit or deny the allegations.

Compounded drugs are custom-made medications that traditionally were formulated by pharmacies regulated by states for specific patients and do not go through the FDA approval process.

But in recent decades, some pharmacies began selling thousands of doses of regularly used mixtures for physicians to keep for future use, even across state lines, prompting FDA concern that they were acting akin to drug manufacturers.

A deadly fungal meningitis outbreak tied to Massachusetts-based New England Compounding Center prompted Congress in 2013 to pass a law aimed at bringing more compounding pharmacies under FDA oversight.

That law created "outsourcing facilities" like Edge who could register with the FDA and sell products to hospitals using ingredients from a "bulk substances" list the FDA was required to establish while following federal manufacturing standards.

The FDA only recently began adding substances to the list, and Edge argued it was allowed under an interim policy to use vancomycin hydrochloride to make its drug.

But Barron said the FDA's discretionary enforcement decision "does not mean that the terms of the provision are less than perfectly clear."

The case is Azurity Pharmaceuticals Inc v. Edge Pharma LLC, 1st U.S. Circuit Court of Appeals, No. 21-1492.

For Azurity: James Hulme of ArentFox

For Edge: Robert Fluskey of Hodgson Russ

Read more:

Judge tosses Azurity's suit over compounder's 'copy' of its drug

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Nate Raymond reports on the federal judiciary and litigation. He can be reached at nate.raymond@thomsonreuters.com.