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United States District Court for the Northern District of California
December 21, 2017, Decided; December 21, 2017, Filed
Case No. 17-cv-04810-HSG
ORDER DENYING MOTION FOR PRELIMINARY INJUNCTION, MOTION TO STRIKE, AND MOTION TO DISMISS
Re: Dkt. Nos. 3, 26
Pending before the Court is Plaintiff Exeltis USA Inc.'s motion for a preliminary injunction, Dkt. No. 3, and Defendant First Databank Inc.'s related motion to strike and motion to dismiss, Dkt. No. 26. For the reasons detailed below, the Court DENIES Plaintiff's motion for a preliminary injunction, DENIES Defendant's motion to strike, and DENIES Defendant's motion to dismiss.
A. Factual Background1
At the heart of this case is a regulatory question about the [*2] prescription status of prenatal vitamins under federal law. Plaintiff manufactures and sells prenatal vitamins. See Dkt. No. 1 ¶¶ 3, 9 ("Compl."). According to Plaintiff, its products, which contain 1 mg of folic acid, are not available without a prescription and are labeled and sold "by prescription only." Id. ¶¶ 3, 40. Defendant publishes a database of information about pharmaceutical products, including Plaintiff's prenatal vitamins. Id. ¶¶ 2, 10. Medicaid and insurance providers ("payors") purchase and use Defendant's database to make reimbursement decisions. Id. ¶¶ 2, 10, 46-47.
Defendant announced in May 2017 that it was revising its coding for dietary supplements and medical foods. See id. ¶ 1; see also Dkt. No. 26-1, Ex. E. Historically, the "class value" field in Defendant's database signified whether manufacturers identified their products as prescription-only. Dkt. No. 26-1, Ex. B at 2368. It used code "F" where "[p]roduct labeling indicates prescription or physician supervision required for use" and code "O" where the "[p]roduct has no labeling indicating dispensing limitations." Id. Then in 2016, following guidance by the Food and Drug Administration ("FDA") that medical foods cannot be [*3] properly labeled "prescription only," see Dkt. No. 26-1, Ex. A,2 Defendant amended the "class value" field to "identif[y] a product's prescription status" under federal law. See Compl. ¶¶ 49-50; Dkt. No. 1-2, Ex. B at 379-80, 2506; Dkt. No. 26-1, Ex. C at 2504. Under this revised field, code "F" signifies "[d]rugs that are prohibited by federal law from being dispensed without a prescription" and code "O" signifies "[p]roducts with no federal legal prescription requirement, including medical foods, dietary supplements, non-prescription medical devices, and over-the-counter drugs." Dkt. No. 1-2, Ex. B at 379-80, 2506; Dkt. No. 26-1, Ex. C at 2504. However, code "F" still explicitly included "prenatal vitamins labeled as prescription." Dkt. No. 26-1, Ex. C at 2504. Now, Defendant intends to remove the reference under "F" to prenatal vitamins and change its coding for all dietary supplements and medical foods — including Plaintiff's prescription prenatal vitamins — to "O." Compl. ¶ 58; see also 26-1, Ex. D at 2529 & Ex. E. Absent Court intervention, these proposed changes are set to go into effect on February 28, 2018. See Dkt. No. 53.
Plaintiff [*4] contends that Defendant's coding decision, categorizing all prenatal vitamins as "O" instead of "F," is false and misleading. Compl. ¶¶ 59, 79, 88, 99, 107, 115. Relatedly, because this coding is false, Plaintiff contends that Defendant's statements that its database is "robust, reliable, and [offers] effective medication decision support solution[s]" are also false. See Dkt. No. 3 at 18. Plaintiff further urges that Defendant's new coding "will lead to widespread denial of Medicaid and insurance coverage for [prenatal vitamins]." Compl. ¶ 4. Plaintiff states that as a consequence, women will have more limited access to these vitamins, which help prevent serious birth defects such as anencephaly and spina bifida. Id. ¶¶ 5-7, 15-16, 24-25, 67. It may also "destroy" Plaintiff's business model, in which only 6% of its prenatal vitamins are paid for out-of-pocket. Id. ¶¶ 8, 76.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2017 U.S. Dist. LEXIS 210482 *
EXELTIS USA INC., Plaintiff, v. FIRST DATABANK, INC., Defendant.
Subsequent History: Stay denied by Exeltis USA Inc. v. First Databank, Inc., 2018 U.S. Dist. LEXIS 35737 (N.D. Cal., Mar. 5, 2018)
Transfer denied by In re First Databank Prescription Info. Litig., 291 F. Supp. 3d 1376, 2018 U.S. Dist. LEXIS 57818, 2018 WL 1631605 (J.P.M.L., Apr. 4, 2018)
Writ denied by, Stay denied by, As moot First Databank, Inc. v. United States Dist. Court, 2018 U.S. App. LEXIS 8862 (9th Cir. Cal., Apr. 6, 2018)
Transfer denied by Acella Pharms., LLC v. First DataBank, Inc., 2018 U.S. Dist. LEXIS 226571 (N.D. Ga., June 4, 2018)
Motion granted by, in part, Motion denied by, in part Exeltis USA Inc. v. First Databank, Inc., 2018 U.S. Dist. LEXIS 154117 (N.D. Cal., Sept. 10, 2018)
Motion denied by Exeltis USA Inc. v. First Databank, Inc., 2019 U.S. Dist. LEXIS 89265, 2019 WL 2270396 (N.D. Cal., May 28, 2019)
Motion denied by Exeltis USA Inc. v. First Databank, Inc., 2019 U.S. Dist. LEXIS 120920 (N.D. Cal., July 19, 2019)
Appeal dismissed by Exeltis United States, Inc. v. First Databank, Inc., 779 Fed. Appx. 486, 2019 U.S. App. LEXIS 29918, 2019 WL 4898687 (9th Cir. Cal., Oct. 4, 2019)
Motion granted by, in part, Motion denied by, in part Exeltis USA Inc. v. First Databank, Inc., 2020 U.S. Dist. LEXIS 95701, 2020 WL 2838812 (N.D. Cal., June 1, 2020)
Motion granted by, in part, Motion denied by, in part, Motion denied by Exeltis USA Inc. v. First Databank, Inc., 2020 U.S. Dist. LEXIS 224983, 2020 WL 7025089 (N.D. Cal., Nov. 30, 2020)
Summary judgment granted by, Judgment entered by Exeltis United States, Inc. v. First Databank, Inc., 2021 U.S. Dist. LEXIS 29773 (N.D. Cal., Feb. 17, 2021)
prescription, vitamins, database, prenatal, products, payors, preliminary injunction, drugs, commercial speech, reimbursement, foods, public interest, anti-SLAPP, prior restraint, federal law, labeled, injunction, dietary supplement, irreparable harm, coding, third-party, subscribers, coverage, merits, decisions, changes, parties, over-the-counter, misleading, dispensed
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