Ninth Circuit backs district court, tosses Nexus Pharma appeal in compounding drug suit
In a case over who can judge what a copycat drug is, two courts have now said that the FDA holds that exclusive privilege.
The Ninth Circuit Court of Appeals on Tuesday affirmed a California district court’s decision to dismiss a case brought against a compounding pharmacy network by Illinois-based Nexus Pharmaceuticals, which claimed the network was selling a copy of a surgical setting drug that Nexus was marketing — and allegedly violating the FD&C Act.
The case goes back to 2020, when Nexus sued Central Admixture Pharmacy Services (CAPS), a network of outsourcing admixture pharmacies. The pharma company accused the network of manufacturing and selling new drugs under the guise of compounding.
Contextually, Nexus has an FDA-approved and marketed drug called Emerphed, a ready-to-use ephedrine sulfate for use in surgical settings. CAPS also has a ready-to-use ephedrine sulfate product that it ships out — and Nexus called foul.
The law at the center of the suit, according to Nexus, is that CAPS was in violation of Section 503B of the federal Food, Drug and Cosmetic Act. From Nexus’ complaint, that law “precludes the sale of drugs that are ‘essentially a copy’ of an approved drug.”
However, the district court threw out the case a few months later. Judge Cormac Carney of California’s Central District wrote in his ruling that,
Both of the reasons Nexus alleges that Defendants are competing unfairly are established by FDCA requirements, which the FDA has the exclusive authority to enforce. Nexus’s claims conflict with the federal statutory scheme. FDA approval is clearly within the scope of the FDCA’s “comprehensive regulatory authority.” And whether Defendants’ product is “essentially a copy” of Nexus’s product is a determination which “implicates various exceptions that ‘directly implicate the FDA’s rulemaking authority.’”
Carney made it even clearer when he granted CAPS’s motion to dismiss the case that the “determination of whether Defendants’ product is ‘essentially a copy’ of Nexus’s, in violation of the FDCA, must be left to the FDA.”
Nexus then appealed to the Ninth Circuit, alleging that state laws that prohibit the sale of drugs not FDA-approved were violated. However, the three federal judges were not persuaded.
Judge Andrew Kleinfeld, who wrote the appellate court’s ruling, noted that the FDA plans on issuing guidance on what “essentially a copy” means, adding that the federal agency is aware of how precarious interpreting and enforcing that “essentially a copy” provision is.
“All of Nexus’s claims depend on a determination of whether Central Admixture’s ephedrine sulfate is ‘essentially a copy’ of Nexus’s Emerphed. The plain text of the FDCA leaves that determination in the first instance to the FDA’s balancing of risks and concerns in its enforcement process,” Kleinfeld added.
The ruling concluded that “Nexus seeks to enforce its interpretation of the ‘essentially a copy’ exclusion from the ‘outsourcing facilities’ exception, a task reserved to the FDA.”
Nexus Pharmaceutical did not respond to a request for comment from Endpoints News in time for publication.