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ANDRX PHARMACEUTICALS, INC. v. FRIEDMAN

January 6, 2000

ANDRX PHARMACEUTICALS, INC., PLAINTIFF,
V.
MICHAEL A. FRIEDMAN, LEAD DEPUTY COMMISSIONER, FOOD AND DRUG ADMINISTRATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: John Garrett Penn, District Judge.

MEMORANDUM

This matter is before the Court on Andrx Pharmaceuticals, Inc.'s Motion to Dismiss Biovail Corporation International's Counterclaim. For the reasons set forth below, the motion will be granted.

I. Background

This case first came before the Court on Andrx Pharmaceuticals, Inc.'s, ("Andrx") motion for a temporary restraining order. Andrx had challenged a Food and Drug Administration ("FDA") regulation that conditioned a period of market exclusivity on the successful defense of a patent infringement action. Andrx sought an order directing the FDA to withdraw its approval of an Abbreviated New Drug Application ("ANDA"), which authorized another company, Mylan Pharmaceuticals, to market a generic version of a drug that Andrx believed it was entitled to market exclusively for 180 days. This Court granted Andrx's motion for a temporary restraining order, and directed that Mylan Pharmaceuticals cease the marketing, sale, and distribution of the generic drug at issue until the specific date on which Andrx's period of exclusivity was to run. See Memorandum filed March 30, 1998. Subsequently, the Court of Appeals for the District of Columbia Circuit ruled in a different case raising the same issue. In that case, Mova Pharmaceutical Corp. v. Shalala, 329 U.S.App.D.C. 341, 140 F.3d 1060 (1998), the court invalidated the FDA regulation conditioning the 180-day period of exclusivity on the requirement that the first ANDA applicant successfully defend a patent infringement suit. In light of this Court's opinion, and that of the Court of Appeals in Mova, the government has conceded this issue, and the FDA has since issued new guidelines. See Federal Defendants' Reply to Plaintiff's Opposition to Its Motion to Dismiss [# 30]; Andrx's Statement in Support of Motion to Dismiss at 1-2. Moreover, Andrx has voluntarily dismissed its complaint against the FDA and Faulding, Inc. See Notice of Dismissal as to Michael A. Friedman [# 39]; Notice of Dismissal as to Faulding, Inc. [# 44]. Thus, the only remaining issues before the Court are those raised by defendant/counterclaim-plaintiff Biovail Corporation International ("Biovail").

When an ANDA applicant makes a paragraph IV certification, the patent-holder has forty-five days within which to bring a patent infringement suit against the applicant. If the patent-holder brings such a suit, the FDA's approval of the ANDA automatically is delayed for thirty months, a period which may be extended or shortened by the court. 21 U.S.C. § 355(j)(5)(B)(iii).

The provision of the Hatch-Waxman amendments which occasioned the original claims in this case, and which is at the heart of the antitrust allegations in the counterclaims, is a provision that specifies how subsequent ANDA applications are to be treated; specifically, it is a provision which provides that subsequent ANDA applications may not be made effective until one of two trigger dates:

If the application contains a certification described in subclause (IV) of paragraph (2)(A)(vii) and is for a drug for which a previous application has been submitted under this subsection continuing [sic] such a certification, the application shall be made effective not earlier than one hundred and eighty days after —
(I) the date the Secretary receives notice from the applicant under the previous application of the first commercial marketing of the drug under the previous application, or
(II) the date of a decision of a court in an action described in clause (iii) holding the patent which is the subject of the certification to be invalid or not infringed, whichever is earlier.

21 U.S.C. § 355(j)(5)(B)(iv). This provision effectively permits a 180-day period of market exclusivity for the first ANDA applicant within which the applicant may market its generic drug without competition from subsequent ANDA applicants. It ensures that any subsequent ANDA applicant may not market its generic version of the pioneer drug until 180 days from the earlier of either (1) the first commercial marketing by the first ANDA applicant, or (2) a court decision in a patent infringement suit (one brought pursuant to the statute within 45 days of the first ANDA application) finding the patent to be invalid or not infringed. This provision is intended to reward the first ANDA applicant for incurring the risks of being the first on the market with a generic version of a pioneer drug. See, e.g., Mova, 329 U.S.App. D.C. at 356, 140 F.3d at 1075.

Andrx originated this action challenging FDA's practice of approving in certain cases subsequent ANDAs prior to the running of the 180-day period of exclusivity to which the primary ANDA applicant was entitled. Of immediate concern to Andrx was FDA's approval of an ANDA submitted by Mylan Pharmaceuticals for a generic version of Dilacor XR®. This Court granted a temporary restraining order and directed Mylan Pharmaceuticals to cease the marketing, sale, and distribution of its generic version of Dilacor XR® until the date on which Andrx's statutory period of exclusivity was to run. See Memorandum and Order, March 30, 1998. Subsequently, in another case, the D.C. Circuit invalidated the FDA regulation under which the agency approved Mylan Pharmaceuticals' ANDA, as well as others in similar situations, prior to the first ANDA applicant's enjoyment of the 180-day period of exclusivity. See Mova, 329 U.S.App. D.C. at 357, 140 F.3d at 1076 (affirming district court's decision striking down the "successful defense" requirement).

Biovail now has filed a counterclaim against Andrx, alleging antitrust violations. Biovail alleges that Andrx colluded with Hoechst Marion Roussel, Inc. ("HMRI") to delay the implementation of the 180-day period of market exclusivity, intending to restrain trade in less expensive generic drugs and nearly achieving a monopoly, in violation of Sections 1 and 2 of the Sherman Act. Biovail also alleges the common law violations ...


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