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SCHERING CORP. v. SULLIVAN

January 16, 1992

SCHERING CORPORATION, Plaintiff,
v.
LOUIS W. SULLIVAN, et al., Defendants.



The opinion of the court was delivered by: MICHAEL BOUDIN

 The Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301-394, provides that generic drugs may be approved pursuant to an abbreviated application procedure. 21 U.S.C. § 355(j). To receive such approval an applicant must show, among other things, that the generic drug is "bioequivalent" to a previously approved drug. *fn1" 21 U.S.C. §§ 355(j)(2)(A)(iv), (j)(3)(F). The FDCA further provides that a new drug "shall be considered to be bioequivalent to a listed [i.e., previously approved] drug" if the rate and extent of absorption of the new drug do not significantly differ from the rate and extent of absorption of the listed drug, or if the extent of absorption of the new drug does not significantly differ from that of the listed drug and the rate of absorption of the new drug has been intentionally modified. 21 U.S.C. § 355(j)(7)(B).

 The Food and Drug Administration ("FDA"), the federal agency responsible for administering the FDCA, decided that a generic drug may satisfy the bioequivalence requirement even if it does not satisfy the precise standards set forth in Section 355(j)(7)(B). See FDA Letter to Schering Corporation Responding in Part to Its Citizen Petition and Petition for Stay of Action Dated December 4, 1989 (June 4, 1990) ("FDA Decision"), Administrative Record ("AR") Tab 6. That section, says the FDA, simply creates a "safe harbor" for determining bioequivalence; that is, it ensures that, if one of the two specified showings is made, the new drug must be deemed bioequivalent to the approved drug. Plaintiff Schering Corporation ("Schering") contests this interpretation, and claims that all applicants must make one of the two showings described in Section 355(j)(7)(B) in order to establish bioequivalence.

 This case comes before the Court on Schering's and the federal defendants' cross-motions for summary judgment. *fn2" Oral argument was heard on April 30, 1991, and the matter was taken under advisement. On December 16, Schering moved to preliminarily enjoin the FDA's approval under Section 355(j) of a generic drug produced by Copley Pharmaceuticals, Inc. ("Copley"). Copley was granted leave to intervene in this action, and filed an opposition to Schering's motion for a preliminary injunction. The Court heard oral argument on the latter motion on January 9, 1992.

 The central issue presented by all of these motions is whether the FDA's interpretation of Section 355(j)(7)(B) is proper, *fn3" and the issue is a significant one with legitimate arguments on both sides. Since the Court concludes that the FDA's interpretation is consistent with the language of the FDCA and with its legislative history, the federal defendants' motion for summary judgment is granted. Schering's motion for summary judgment and motion for a preliminary injunction are denied, and its complaint is dismissed.

 I. BACKGROUND

 Schering manufactures and distributes a number of "nonsystemic" pharmaceutical drugs. In simple terms, a nonsystemic drug is applied directly to the site of the drug action (e.g., ointment), rather than absorbed as a result of the drug's general dispersion throughout the body (e.g., capsule). *fn4" On December 4, 1989, Schering petitioned the FDA to: (1) deny all applications for abbreviated approval of nonsystemic drugs; (2) refuse to disclose safety and efficacy data of nonsystemic drugs that have been approved pursuant to the full application process; and (3) refuse to disclose the safety and efficacy data for Schering's nonsystemic drugs. Citizen Petition and Petition for Stay of Action from Schering Corporation ("Schering Petition"), AR Tab 1. In essence, Schering argued that the bioequivalence requirement could be satisfied only by making one of the two precise showings set forth in Section 355(j)(7)(B); that, under available methods of scientific experimentation, such a showing could not be made for nonsystemic drugs; and, therefore, that abbreviated applications for such drugs could not be approved. Id. at 3-4. Additionally, Schering argued that the FDA should not release safety and effectiveness data for approved nonsystemic drugs until generic versions can properly be approved pursuant to the abbreviated application process. See 21 U.S.C. § 355(1)(5).

 On May 23, 1990, Schering submitted to the FDA supplemental documents in support of its contention that nonsystemic drugs presently cannot satisfy Section 355(j)(7)(B). AR Tab 3. In light of the urgency of Schering's requested relief, the FDA elected to respond only to the legal questions raised by the petition, and to defer deciding the scientific questions. See FDA Decision at 1 n.1. The FDA then concluded that the FDCA does not preclude approval of abbreviated applications for nonsystemic drugs. In particular, the FDA reasoned that Section 355(j)(7)(B) does not set forth the exclusive statutory definition of bioequivalence. *fn5" Id. at 6-7. Accordingly, the FDA denied Schering's request for relief. Id. at 21. Schering filed the present action on August 1, 1990.

 Schering now challenges the FDA's interpretation of Section 355(j)(7)(B), and requests that the Court: (1) declare that Section 355(j)(7)(B) provides the exclusive definition of bioequivalence; (2) enjoin the FDA from approving any abbreviated applications for generic versions of nonsystemic drugs manufactured by Schering, and suspend the approval previously granted to Copley; (3) declare that Section 355(1)(5) does not require the disclosure of any safety and effectiveness data for nonsystemic drugs until it can be shown that those drugs satisfy the bioequivalence requirement; and (4) enjoin the disclosure of safety and effectiveness data for Schering's own nonsystemic drug products. Because the Court disagrees with the first proposition as a matter of law, and because the equities of this case do not support Schering's suggestion that it is entitled to emergency injunctive relief preliminary to a factual challenge of the Copley approval, the requested relief is denied in toto.

 II. ANALYSIS

 A. Summary Judgment Motions

 Taking the legal issue presented to be ripe for adjudication, see supra note 3, it is also appropriate for summary judgment. Schering has raised a pure question of statutory interpretation, which is independent of any factual dispute and may be decided as a matter of law under Fed. R. Civ. P. 56. The parties appear to agree that the briefs submitted and argument presented suffice for a final decision on the merits of Schering's original complaint.

 The first step in the Court's inquiry is to determine, using traditional tools of statutory construction, whether Congress had "an intention on the precise question at issue." Chevron USA, Inc. v. NRDC, 467 U.S. 837, 843, 104 S. Ct. 2778, 81 L. Ed. 2d 694 n.9 (1984); Amalgamated Transit Union v. Skinner, 282 App. D.C. 322, 894 F.2d 1362, 1368 (D.C. Cir. 1990). If so, that is the end of the inquiry. In order to ascertain Congressional intent, the Court looks to the language in question, the structure of the statute as a whole, "and, where appropriate, legislative history." Amalgamated Transit, 894 F.2d at 1368. If, after undertaking such an analysis, the Court concludes that the statute is ambiguous or silent on the issue, it must defer to the agency's interpretation so long as it is reasonable and consistent with the purpose of the statute. See Chevron, 467 U.S. at 844-45.

 Here, the intent behind Section 355(j)(7)(B) is clear from the language, structure, and legislative history of the 1984 amendments to the FDCA, all of which suggest that Congress permitted the FDA to retain its historically wide discretion in defining showings of "bioequivalence." Moreover, even if the statute had been ambiguous or silent on the issue, the Court nonetheless would be constrained to uphold the FDA's interpretation as a reasonable one, given the agency's established practice of accepting alternative showings of bioequivalence and the lack of any evidence that COngress intended to override that practice.

 Section 355(j)(2)(A)(iv) of the FDCA requires an applicant for abbreviated approval of a generic drug to provide "information to show that the new drug is bioequivalent to the listed drug," unless the new drug has a different active ingredient, dosage form, route of administration, or strength than the listed drug. *fn6" See 21 U.S.C. §§ 355(j)(2)(A)(iv), (j)(2)(C); see also 21 U.S.C. § 355(j)(3)(F) (abbreviated application may be denied if information submitted is insufficient to show bioequivalence). ...


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