PharmacyChecker.com LLC v. National Association of Boards of Pharmacy

Background

PharmacyChecker.com LLC (“PCC”) sued the National Association of Boards of Pharmacy (“NABP”), the Alliance for Safe Online Pharmacies (“ASOP”), the Center for Safe Internet Pharmacies (“CSIP”), and the Partnership for Safe Medicines (“PSM”). PCC alleged that the defendants conspired to restrain trade in violation of Section 1 of the Sherman Act and that NABP falsely advertised or promoted in violation of Section 43(a) of the Lanham Act.

The defendants moved for summary judgment on PCC’s Sherman Act claim. PCC and the defendants also filed competing motions to strike portions of the summary-judgment submissions. In addition, the defendants moved to exclude the testimony of PCC’s expert, Benjamin England, under the evidence rules governing expert testimony.

PCC’s website compared prescription-drug prices, listed pharmacies accredited through its program, and linked consumers to online pharmacies. The record showed that most of PCC’s click-based revenue came from clicks by U.S. consumers to foreign pharmacies. PCC also provided information about buying medication from international pharmacies and helped some consumers address problems with orders from those pharmacies.

Expert-testimony ruling

The court found England qualified as an expert in Food and Drug Administration policy and practice based on his education and extensive experience with the FDA and related regulatory matters. But the court excluded his first three opinions because they attempted to state what federal law permits concerning personal importation of prescription drugs. The court held that determining the law is the judge’s responsibility, not an expert’s.

The court allowed England’s fourth opinion, which concerned whether PCC buys, sells, distributes, dispenses, or processes drug orders and whether PCC’s verification requirements were consistent with FDA policy. The court concluded that this opinion had a sufficient connection to the issues before it and could be considered for its evidentiary value. Accordingly, the defendants’ motion to exclude England’s testimony was granted in part and denied in part.

Summary-judgment analysis

The court applied its earlier ruling in this case that a business cannot establish antitrust injury when it is completely or almost completely illegal, or completely or almost completely geared toward facilitating illegal conduct. Antitrust standing is the legal requirement that a plaintiff show both a qualifying antitrust injury and that it is an appropriate party to bring the claim.

The court first held that personal importation of prescription drugs is illegal under current federal law. It reasoned that the federal drug laws create a comprehensive system governing approval, labeling, dispensing, and importation. The court recognized limited exceptions and possible waivers, but concluded that the statutory provision authorizing certain personal importation had not been put into effect because the required certification by the Secretary of Health and Human Services had not occurred. The court also concluded that the FDA’s guidance describing situations in which importation “might” be allowed did not make personal importation generally lawful.

The court then examined PCC’s revenue and operations. It found that clicks by U.S. consumers to foreign pharmacies represented the largest share of PCC’s revenue, regardless of which of the parties’ calculations was used. The court also relied on PCC’s website statements about savings, international delivery, the legality and enforcement of drug importation, and the safety of foreign pharmacies. PCC’s consumer-support activities, including helping customers with refunds, delivery issues, and potentially incorrect medication, further supported the court’s assessment of PCC’s business.

The court rejected PCC’s argument that the defendants needed to prove that every click resulted in an actual purchase and unlawful importation. It concluded that facilitating illegal conduct means making that conduct easier or helping bring it about, and that PCC’s links and related services made it easier for U.S. consumers to buy prescription drugs from foreign pharmacies.

Disposition

The court held that PCC’s enterprise was completely or almost completely geared toward facilitating illegal importation. It therefore concluded that PCC lacked antitrust standing to maintain its Sherman Act Section 1 claim and granted the defendants’ joint motion for summary judgment on that claim. The court stated that ASOP, CSIP, and PSM were dismissed from the case.

The court denied PCC’s motion to strike portions of the defendants’ submissions and denied the defendants’ motion to strike portions of Gabriel Levitt’s declaration. The court granted in part and denied in part the defendants’ motion to exclude England’s expert testimony. The opinion does not state a disposition of PCC’s Lanham Act claim against NABP.