Compounding pharmacies across the country are receiving cease-and-desist letters from PHD Topicals, LLC, asserting that formulations comprising 5% 5-fluorouracil (5-FU) and 0.005% calcipotriol (also referred to as calcipotriene) allegedly infringe on certain patents exclusively licensed by PHD Topicals. These letters demand that the recipient pharmacies immediately cease compounding the products or seek authorization from the licensee, and include a stated response deadline of October 3, 2025. The manufacturer appears to be prosecuting this campaign broadly, targeting pharmacies it believes compound the 5-FU/calcipotriol combination for actinic keratosis and related dermatologic uses.
This article highlights what these letters mean for 503A pharmacies, the risks of ignoring them, and the key defenses and response strategies pharmacies should consider now.
What the Letters Allege
The letters claim that pharmacies “making, using, offering to sell, and/or selling” products comprising 5% 5-FU and 0.005% calcipotriol infringe at least one claim contained in certain patents held by or licensed to PHD. These allegations include both method-of-treatment claims and composition claims and accuse direct infringement under 35 U.S.C. § 271(a) (making/using/selling), induced infringement under § 271(b) (encouraging prescribers/patients to use the method), and contributory infringement under § 271(c). The letters threaten actions for damages (i.e., royalties), treble damages for willful infringement, attorney fees, and an injunction, and demand a written response by October 3, 2025.
PHD appears to be pursuing a coordinated enforcement campaign against pharmacies they believe compound the 5-FU/calcipotriol combination, using publicly available websites and compound lists as evidence.
Key Rights and Defenses
While receiving a strongly worded demand letter from a national law firm can be alarming, it is important to note that viable defenses may exist. While no single defense fits all circumstances, pharmacies may be able to argue a number of key defenses, including noninfringement (different concentrations, actives, or modes of dispensing), invalidity (anticipation/obviousness over prior art), and lack of intent for induced or contributory infringement. These defenses require fact-specific analyses and often technical support. Pharmacies should consult with experienced counsel to evaluate facts and strategies.
What Does This Mean for You?
If you received one of these letters, or one similar to it, it is critical to understand the potential risks involved:
- Failure to Respond or Comply: If you do not respond or fail to cease your activities, the licensee has indicated that it will pursue legal action, which could involve costly litigation and potential damages.
- Responding without Proper Guidance: Without understanding the legal implications of your response, you may inadvertently admit to unlawful activities or fail to address the complex regulatory environment surrounding compounded drugs. Responding prematurely without legal advice could escalate the situation and limit your options moving forward.
- Additional Penalties. Failure to address the situation properly could also lead to additional penalties or fees, such as attorneys’ fees for continued willful conduct, or spoliation of evidence penalties (as the letters trigger a duty to preserve relevant documents).
How Frier Levitt Can Help
Frier Levitt, a national Healthcare and Life Sciences law firm, can work with your pharmacy to ensure compliance and mitigate risks. We can assist you by:
- Reviewing the Letter: We will evaluate the specifics of the cease-and-desist letter you received, assessing whether your activities align with FDA regulations and current industry standards.
- Analyze the Referenced Patents: We will conduct a detailed review of the asserted patents and your products to determine whether your products might fall within the scope of the asserted claims.
- Determining a Strategic Response: We will help you craft a measured, informed response, ensuring that you address the concerns claimed in the letter appropriately and avoid escalating the situation.
- Defending Against Legal Actions: If you are facing legal action, we offer defense strategies to protect your business and ensure compliance with both state and federal laws.
- Risk Mitigation and Continued Guidance: In addition to responding to these letters, we can assist your pharmacy in reviewing and auditing your products, marketing and communications to avoid broader exposure. We can also help to implement other interim risk mitigation processes and design-arounds, if applicable.
The Time to Act is Now
If you have received a cease-and-desist letter or are concerned about the future of your compounding business, we encourage you to contact us immediately. Our team of healthcare and life sciences attorneys can help you navigate the complexities of this situation, minimize risks, and protect your business interests.
Frier Levitt provides strategic, industry-focused legal counsel tailored to your needs. Contact our team today to learn how we can help you.
