Court Opinion

ID: 7807114
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:00:30.209535+00
Date Added: 2024-06-11T16:30:21.465315
License: Public Domain

NOT PRECEDENTIAL

                         UNITED STATES COURT OF APPEALS
                              FOR THE THIRD CIRCUIT
                                 ________________

                                        No. 21-2737
                                     ________________

                            SEBELA PHARMACEUTICALS, INC.,
                                                     Appellant
                                        v.

                                    TRUPHARMA, LLC

                                     ________________

                      On Appeal from the United States District Court
                                for the District of Delaware
                                 (D.C. No. 1:20-cv-01677)
                        Circuit Judge: Honorable Stephanos Bibas

                                     ________________

                           Submitted Pursuant to L.A.R. 34.1(a) on
                                       July 11, 2022
                                    ________________

           Before: GREENAWAY, JR., MATEY, and RENDELL, Circuit Judges

                             (Opinion filed: September 7, 2022)

                                     ________________

                                        OPINION**
                                     ________________


 The Honorable Stephanos Bibas, Circuit Judge sitting by designation pursuant to 28
U.S.C. §291(b).

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
GREENAWAY, JR., Circuit Judge

 I.   Introduction

      Sebela Pharmaceuticals, Inc. (“Sebela”) and TruPharma, LLC (“TruPharma”) are

competing drug manufacturers. Sebela sued TruPharma for alleged violations of the

Lanham Act and a handful of other common law claims. After noting that Sebela had

two failed attempts at stating a viable claim, the District Court dismissed the amended

complaint with prejudice. We agree with the District Court’s pithy and well-crafted

opinion and will affirm.

II.   Background

      Sebela sells a hemorrhoid cream under the names PRAMOSONE and

ANALPRAM (“PRAMASONE Cream”). PRAMASONE Cream is a non-FDA approved

cream consisting of hydrocortisone acetate 2.5% w/w and pramoxine hydrochloride 1%

w/w. Like Sebela, TruPharma is in the pharmaceutical business and it has a competing

cream on the market. This competing cream also contains hydrocortisone acetate 2.5%

w/w and pramoxine hydrochloride 1% w/w.

      Both companies, as do others, submit information about their products to drug

databases. These databases are used by manufacturers to market their products, including

a product’s specifications and pricing. The databases, generally, assign each product

submitted a multi-character code, and then list together products with “the same

ingredients, strength, form, and dosage routes.” App. Vol. II, 16 ¶ 36. Pharmacies,

pharmacy benefit managers, and prescription fillers are then able to see the grouped

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products in order to make buying and prescription decisions. Because Sebela and

TruPharma’s products share the “exact same strength and active ingredients,” the

independent drug databases list these products together. Id. at 19, ¶ 54.

         As relevant to this appeal, in an amended complaint, Sebela sued TruPharma

under the Lanham Act for alleged direct and contributory false advertising and unfair

competition. Sebela also sued for violations of the Delaware Deceptive Trade Practices

Act, and under common law for unfair competition and tortious interference with contract

or prospective contractual relations.1 Sebela alleged that by communicating its product

specifications to the drug databases, TruPharma “represented and continues to represent”

its product as an “equivalent of Sebela’s PRAMOSONE Cream” or a “‘generic’ version

of PRAMASONE Cream.” App. Vol. II 13, ¶¶ 24, 26.

         TruPharma filed a motion to dismiss the amended complaint, which the District

Court granted. In its memorandum opinion, the District Court explained that Sebela

“point[ed] to no statement that [was] false.” App. Vol. II, 322. Sebela also failed to

plausibly allege misleading statements, because the two companies’ drugs were, in fact,

“pharmaceutically equivalent.” Id. at 323 (citation and internal quotation marks omitted).

TruPharma had no control over how its product appeared in the drug databases. Finally,

Sebela’s speculation that pharmacists substituted TruPharma’s cream for Sebela’s cream

did not amount to deception on the part of TruPharma: “[P]harmacists substitute drugs

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    Sebela’s amended complaint eliminated a prior unjust enrichment claim.
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based on cost” and TruPharma’s product “costs about half the wholesale or insurance

price of Sebela’s.” Id. (citations omitted).

       Sebela timely appealed the dismissal.

III.   Discussion2

       The District Court concluded that Sebela failed to plausibly allege that TruPharma

made false or misleading statements. We agree.

       Both Sebela and TruPharma have non-FDA approved medications that contain the

same ingredients in the same ratios. Pharmaceutical drug databases list these two drugs

together, showing TruPharma’s drug as an alternative to Sebela’s product. This listing

together is the heart of Sebela’s complaint. Because their two products were listed

together, Sebela argues that TruPharma engaged in false or deceptive practices that

harmed its sales. The mere listing together of these products in the databases, however, is

not an actionable claim against TruPharma. TruPharma does not control the listing

process. As Sebela’s complaint alleges, the drug databases “identify all drugs that have

the same ingredients, strength, form, and dosage routes” and then the databases list those

products together. App. Vol. II, 16 ¶ 36.

       Among other things, false or misleading advertising under the Lanham Act

requires a competitor to “misrepresent[] the nature, characteristics, qualities, or

2
 The District Court had jurisdiction over the Lanham Act claims pursuant to 15 U.S.C.
§ 1121(a) and 28 U.S.C. § 1331; it had jurisdiction over the state-law claims under 28
U.S.C. § 1367. As an appeal from a final order, we have jurisdiction under 15 U.S.C.
§ 1121(a) and 28 U.S.C. § 1291. We exercise plenary review over the District Court’s
dismissal for failure to state a claim. Beasley v. Howard, 14 F.4th 226, 231 (3d Cir.
2021) (citing Watters v. Bd. of Sch. Dirs., 975 F.3d 406, 412 (3d Cir. 2020)).
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geographic origin” of its product. 15 U.S.C. § 1125(a)(1)(B). Sebela itself stated that

TruPharma may have provided “truthful information” about its product to the databases.

Reply Br. at 4. Further, as the District Court noted, Sebela points to no statement by

TruPharma that is false about TruPharma’s product. For similar reasons, the amended

complaint also lacks a cognizable claim that information provided to the databases is

misleading. Indeed, Sebela’s amended complaint states that the two companies’ products

share the “exact same strength and active ingredients.” App. Vol. II, 19 ¶ 54. That

independent drug databases list together the products that contain the same ingredients in

the same ratios and taken by the same means, does not give Sebela grounds to sue

TruPharma under the Lanham Act.

       Finally, for all the reasons that Sebela’s Lanham Act claims fail, its other claims

are likewise deficient. Fisons Horticulture, Inc. v. Vigoro Indus., Inc., 30 F.3d 466, 481

(3d Cir. 1994) (remanding for the district court to reconsider an appellant’s other claims

only after we reversed the district court’s judgment as to the Lanham Act claims

premised on the same allegations).

IV.    Conclusion

       For the foregoing reasons, we will affirm the District Court’s ruling.

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