ArentFox Schiff Uses Lanham Act to Secure $3.9 Million False Advertising Victory for Azurity Pharmaceuticals

A link to the decision is here.

In February 2020, Azurity, a private pharmaceutical company focused on developing innovative products to serve the specific needs of overlooked patients, filed a lawsuit against Vermont-based Edge alleging that Edge was marketing a compounded hydrochloride vancomycin drug in violation of the Lanham Act and Massachusetts false advertising laws.

More specifically, Azurity asserted that Edge falsely advertised that it manufactured its vancomycin product in a manner that complied with the Food, Drug, and Cosmetics Act (FDCA), despite (i) improperly using a bulk drug substance in violation of the “bulk drug substance” prohibition in section 503B of the FDCA; and (ii) manufacturing a vancomycin product that was “identical or nearly identical” to Azurity’s FDA-approved vancomycin product, in further violation of section 503B.

Edge obtained dismissal of the lawsuit at the District Court level, but in August 2022, the US Court of Appeals for the First Circuit held that Azurity had sufficiently stated a Lanham Act claim and was permitted to pursue its false advertising claims against Edge on the bulk drug substance theory. The First Circuit remanded the case to the District Court for further proceedings, and on March 28, 2023, the District Court entered a nearly $4 million judgment in favor of Azurity.

“The judgment in this case is an example of the lengths that Azurity will go to protect its intellectual property rights,” said Hanok George, General Counsel of Azurity. “The First Circuit’s decision and the judgment of the District Court demonstrate that compounding pharmacies and other competitors cannot get away with falsely promoting drugs in violation of applicable law and guidance.”

The ArentFox Schiff team representing Azurity was led by Partner James Hulme and included Partner Nadia Patel, Counsel Wayne Matelski, Associate Morgan Pankow, and Senior Legal Assistant, Jack Hitt. Azurity was represented internally by General Counsel Hanok George and Senior Legal Counsel Lena Cavallo.