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March 31, 2000


The opinion of the court was delivered by: Urbina, District Judge.




Pharmachemie, B.V. ("Pharmachemie") and Mylan Pharmaceuticals, Inc. ("Mylan"), generic manufacturers of the drug tamoxifen (together, the "Parties"), bring separate actions against Defendant Jane E. Henney, M.D., in her official capacity as Commissioner of the United States Food and Drug Administration, and against Defendant Donna E. Shalala, in her official capacity as Secretary of the United States Department of Health and Human Services (collectively referred to as the "FDA"). The Parties, whose tamoxifen drugs are used in the treatment of breast cancer, bring their actions under the Federal Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq. and the Administrative Procedure Act ("APA"), 5 U.S.C. § 706. (Mylan's Compl. at 2; Pharmachemie's Compl. ("Pharm's Compl.") ¶ 9.) Barr Laboratories ("Barr") is a manufacturer of the generic drug tamoxifen, currently exclusively licensed by the owner of the patent to market the drug. (Pharm.Mot. for Prelim.Inj., Ex. 4.)

Mylan and Pharmachemic both assert that the FDA acted arbitrarily and capriciously in rendering by letter dated March 2, 1999 (the "March Letter"), its decision to grant Barr's request that the FDA stay approval of any version of the drug tamoxifen other than Barr's version. (Mylan's Compl. at 2; Pharm.'s Compl. ¶ 5.) The effect of the March Letter is that neither Mylan nor Pharmachemie has the opportunity to market their generic version of tamoxifen until the patent for tamoxifen expires on August 20, 2002. In essence, both maintain that the March Letter violates the FDCA and runs contrary to the agency s own regulations. See id.

Before reaching the merits of the underlying dispute, the court makes the following preliminary determinations, which will assist in the efficacious management and just resolution of this case. First, the court orders the cases, Mylan v. Henney et al. and Pharmachemie v. Henney et al. consolidated for the reasons discussed infra at II.C. Second, the court denies both parties' outstanding motions to intervene for the reasons articulated infra at IIIC. Before elaborating on the reasons for these preliminary determinations, the court turns to consider the statutory and regulatory framework that gives rise to the parties' common claims in this now consolidated action.


A. The Hatch-Waxman Amendments

I. NDA, ANDA and Expedited Generic Approvals

An understanding of the statutory and regulatory framework applicable to the marketing of generic drugs is critical to assessing the merits of the parties' claims, Generic drugs are versions of brand-name prescription drugs that typically contain the same active ingredients as the brandname original. See United States v. Generix Drug Corp., 460 U.S. 453, 455, 103 S.Ct. 1298, 75 L.Ed.2d 198 (1980); Mova Pharm. Corp. v. Shalalo, 140 F.3d 1060, 1062 (D.C.Cir. 1998). Ordinarily, an applicant seeking to market a new brand-name drug ("a pioneer maker") must prepare a rigorous New Drug Application ("NDA") for FDA approval, which includes data showing the new drug's safety and effectiveness. Before 1984, a company that wished to make a generic version of an FDA-approved brand-name drug ("a generic maker") had to file another NDA. Preparation of the second NDA was as time-consuming and costly as the original, because the application had to include new studies showing the drug's safety and effectiveness. See Mova, 140 F.3d at 1063.

In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Amendments ("Hatch-Waxman"), which simplified the procedure for obtaining approval of generic drugs. See Pub.L. No. 98-417, 98 Stat. 1585 (1984). Under Hatch-Waxman, the pioneer maker is still required to file an NDA, complete with safety and effectiveness data. Subsequent applicants who wished to manufacture generic versions of the original drug, however, were only required to file an Abbreviated New Drug Application ("ANDA"). The ANDA is allowed to rely on the FDA's previous determination that the drug is safe and effective. See 21 U.S.C. § 355 (a); Mead Johnson Pharmaceutical Group v. Bowen, 838 F.2d 1332, 1333 (D.C.Cir. 1988). As a result of the ANDA innovation under Hatch-Waxman, generic makers can obtain expedited approval to market generic versions of drugs that have undergone the rigors of "pioneer" approval under the NDA process.

Moreover, generic makers are permitted to manufacture and use drugs protected by a patent(s) if the otherwise infringing activity is related to the development and submission of an ANDA. See 35 U.S.C. § 271 (e)(1). Finally, Hatch-Waxman establishes an ANDA certification process, whereby generic makers can obtain expedited approval for their ANDAs before expiration of the pioneer maker's patent. See 21 U.S.C. § 355 (j)(5)(B).

III. ANDA Certification and Expedited Approval

Hatch-Waxman potentially enables generic makers who adhere to certain requirements to obtain expedited ANDA approval as follows. First, a generic maker seeking approval of its ANDA must demonstrate that (1) the generic version of the drug is "bio-equivalent" to the pioneer NDA version and (2) the generic maker is able to manufacture the drug to required specifications. See 21 U.S.C. § 355(j)(2)(A)(iv). Second, and of moment to this controversy, the ANDA must include a "certification, that for each of the patents applicable to the pioneer drug, the proposed generic drug would not infringe the patent because (I) the patent information has not been filed; (II) the patent has expired; (III) the patent will expire on a stated date; or (IV) the patent is invalid or will not be infringed by the manufacture, use or sale of the drug for which the abbreviated application applicant seeks approval." See 21 U.S.C. § 355(j)(2)(A)(vii); Purepac Pharm. Co. v. Friedman, 162 F.3d 1201, 1202 (D.C.Cir. 1998). The court will refer to the above-referenced certification clauses as Paragraphs I, II, III and IV, respectively.

(i) Paragraph IV and Expedited Approval

Submission of an ANDA for a patented drug is an infringing act if the generic maker intends to market its generic version before expiration of the original maker's patent. (See Pharm.Mot for Prelim.Inj., Ex 4, Guidance for Industry, 180-Day Generic Drug Exclusivity ("Guidance"), at 2.) For example, a generic maker seeking certification of his ANDA under Paragraph III must wait for the pioneer maker's patent to expire and, consequently, will not infringe the patent. But a generic maker seeking certification of his ANDA under Paragraph IV, on the grounds that the pioneer maker's patent is invalid, triggers a multi-tiered process that potentially enables him to obtain approval of his ANDA and market his generic drug before the pioneer maker's patent expires.

(ii) Paragraph IV and Infringement Actions

The FDA can approve a generic maker's Paragraph IV-certified ANDA immediately, unless the pioneer maker brings an action for patent infringement against the ANDA applicant within 45 days of the date the pioneer maker receives notice of the Paragraph IV certification. See 21 U.S.C. § 355 (j)(5)(B)(iii); 21 C.F.R. § 314.107 (f)(2).*fn1 If a patent action is brought within 45 days, however, the ANDA will not be approved until at least 30 months from the date the affected parties, i.e., pioneer makers, receive notice.*fn2 Thus, the potential exists for costly patent litigation against the generic maker that files a Paragraph IV-certified ANDA.

(iii) The Exclusivity Incentive

As an incentive to the first generic maker to expose himself to the risk of costly patent litigation, the Hatch-Waxman regime provides that the first to file a Paragraph IV certified ANDA ("the first filer") is eligible for a 180-day period of marketing protection, commonly known as the 180-day exclusivity period ("the Exclusivity Incentive"). See 21 U.S.C. § 355 (j)(5)(B)(iv), as amended by Public Law No. 105-115, 111 Stat. 2296 (1997); Mova v. Shalala, 140 F.3d 1060, 1064 (D.C.Cir. 1998) ("Mova 1998"). By its terms, the Exclusivity Incentive affords the first filer protection from competition from subsequent generic makers for 180 days beginning from the earlier of a commercial marketing or court decision. In explaining what is intended a court decision, the Exclusivity Incentive makes explicit reference to "clause (iii)" of the statute. See 21 U.S.C. § 355(j)(5)(B)(iii).

B. Factual Background

The facts material to disposition of this consolidated action date back to August, 1985, when a pioneer maker secured the original patent for brand-name tamoxifen, which is a drug used in the treatment of breast cancer. On August 20, 1985, Imperial Chemicals Industries, PLC ("Imperial") obtained U.S.Patent 4,536,516, covering tamoxifen. Imperial's subsidiary, Zeneca Inc. ("Zeneca") is the sole producer of tamoxifen under Imperial's patent. In December, 1985, Barr Laboratories, a generic maker of tamoxifen, submitted an ANDA requesting FDA approval to market its own generic version of tamoxifen. (Mylan's Compl. at 7; Pharm.'s Compl. ¶ 38.)

In September, 1987, Barr amended its ANDA to include a Paragraph IV certification and to challenge the validity of Imperial's tamoxifen patent. See id. After amending its ANDA, Barr sent Imperial notice that it contended Imperial's patent was invalid. The FDA gave effect to Barr's amended paragraph IV certification. (Mylan's Compl. at 7; Pharm.'s Compl. ¶ 40.) In other words, Barr became potentially eligible for the Exclusivity Incentive. Id.

Aster receiving notice of the challenge, Imperial sued Barr for patent infringement in the United States District Court for the Southern District of New York ("Southern District"). (Mylan's Mem. in Supp. of Mot. for Summ.J. at 6; Pharm.'s Mem. in Supp. of Mot. for Summ.J. at 13.) On July 21, 1992, the Southern District held that Imperial's tamoxifen patent was invalid because Imperial deliberately, knowingly and fraudulently withheld material information from the Patent and Trademark Office. See Imperial Chem. Ind., PLC v. Barr Lab., Inc., 795 F. Supp. 619, 629 (S.D.N.Y. 1992) ("the Southern District decision").

Imperial filed a notice of appeal with the United States Court of Appeals for the Federal Circuit, but before any substantive review by the Federal Circuit, Imperial settled the case with Barr ("the Settlement"). (See Pharm.'s Compl. ¶ 44.) The Settlement was expressly conditioned on Barr's agreement to abandon its challenge to the validity of Imperial's patent. Barr would abandon its challenge by amending its Paragraph IV certified ANDA back to a Paragraph III certified ANDA ("the Amendment Back"). Pursuant to the Settlement and as a result of the Amendment Back, Barr's ANDA was no longer eligible for approval until after August 20, 2002, the date that Imperial's tamoxifen patent was scheduled to expire. (See Pharm.'s Compl. ¶ 45.) In exchange, Imperial paid Barr $21 million and granted Barr a license to market tamoxifen. (Mylan's Compl. at 8; Pharm.'s Compl. ¶ 44.)

After settling the case but during the pendency of the appeal before the Federal Circuit, Imperial and Barr jointly moved to (1) vacate the July 21, 1992 judgment of the Southern District and (2) remand the case with instructions to dismiss without prejudice pursuant to Federal Rule of Civil Procedure 41(a). See Imperial Chemical Industries, PLC v. Heumann Pharma GmbH & Co. et al., 991 F.2d 811, 811 (Fed.Cir. 1993) (unpublished disposition). The Federal Circuit issued a short order that granted the parties' request, finding that the "parties to the district court proceeding have entered into a settlement agreement resolving the entire dispute." Id.

During the appeal to the Federal Circuit, a nonparty "Generic Drug Manufacturer" sought to argue by amicus brief that the Federal Circuit should not vacate the Southern District's decision. Id. The Federal Circuit, however, denied the generic nonparty's belated request, reasoning that the issue would "interfere with the parties' settlement of a dispute." Id. In 1993, the Federal Circuit granted the parties' joint request to vacate the Southern District's decision and remanded the matter to the Southern District with instructions to dismiss.

Within a year of the Federal Circuit's vacatur of the Southern District's decision, in August 1994, Pharmachemie submitted a Paragraph III ANDA for its generic version of tamoxifen. In January 1996, Mylan submitted a Paragraph IV ANDA for its generic version of tamoxifen. (Mylan's Compl. at 9.) In February, 1996, Pharmachemie amended its ANDA to include a Paragraph IV certification. (Pharm.'s Compl. ¶ 48.)

After Mylan submitted its paragraph IV ANDA in January 1996, Zeneca sued Mylan for infringement. Because Zeneca brought a patent infringement action against Mylan within 45 days, the 30 month statutory stay of approval was triggered against Mylan and scheduled to expire on July 10, 1998. (Mylan's Compl. at 10.) After Pharmachemie amended its ANDA to reflect a Paragraph IV ANDA, Zeneca sued Pharmachemie for patent infringement within 45 days. The 30-month statutory stay was triggered and scheduled to expire in August, 1998.*fn3

Recent court decisions challenging the agency's interpretation of requirements found in the FDA's regulations, specifically at 21 C.F.R. § 314.107 (c)(1), prompted the FDA to issue a "formal" position in the form of a "Guidance for Industry." (See Pharm.Mot. for Prelim.Inj., Ex. 4, Guidance); see also Inwood Laboratories, Inc. v. Young, 723 F, Supp. 1523 (D.D.C.), vacated as moot, 43 F.3d 712 (D.C.Cir. 1989); Mova Pharmaceutical Corp. v. Shalala, 955 F. Supp. 128 (D.D.C. 1997) ("Mova 1997") (FDA enjoined from enforcing successful defense requirement in C.F.R. § 314.107(c)(1)); Granutec, Inc. v. Shalala, 139 F.3d 889, 1998 WL 153410, *3 (4th Cir. 1998) (unpublished disposition) ("The language of the statute may be complex, and even cumbersome, but it is plain and unambiguous. It does not include a `successful defense' requirement, and indeed it does not even require the institution of patent litigation.") The Guidance outlined the FDA's interim strategy for interpreting Section 355(j)(5)(B)(iv), pending final promulgation of new regulations.

In announcing the FDA's interim strategy pending overhaul, the Guidance states: "[T]he Agency intends to undertake a rulemaking to issue new regulations to fully implement the 180-day generic exclusivity provisions in light of recent court decisions." (See Pharm.Mot. for Prelim.Inj., Ex. 4, Guidance.) The guidance also states:

FDA intends to formally remove the `successful defense' provisions from § 314.107(c)(1), but that process is not complete. Following withdrawal of the regulatory provision, FDA expects to begin rulemaking to issue new regulations under section [355](j)(5)(B)(iv)*fn4 In the meantime, the Agency must make exclusivity decisions for ANDAs that are nearing approval. Until such time as the rulemaking process is complete, FDA will regulate directly from the statute, and will make decisions on 180-day generic drug exclusivity on a case-by-case basis.

(See Id.) Thus, FDA announced that it would regulate directly from the statute. Moreover, the Guidance promised to "remain in effect until superceded [sic] by new regulations or new guidance." (Id.)

Barr's Petition came in the midst of the FDA's determination that it would seek to regulate from the statute. In response to the Petition, Janet Woodcock, M.D., Director of the FDA's Center for Drug Evaluation and Research, announced to Barr by letter dated March 2, 1999 ("the March Letter"): "[a]fter careful review of your petition and supplement, as well as comments to the petition received by FDA, the Agency grants the petition for the following reasons. . . ." Thus, the FDA granted Barr's Petition to preserve its Exclusivity Incentive and to exclude all other generic makers of tamoxifen. (Pharm.'s Mot. for Prelim.Inj., Ex. 1, March Letter.)*fn5

The March Letter explained, over the course of four pages, its reasons for granting Barr's Petition. It is the March letter that forms the basis for both parties' common claim that the FDA violated the FDCA and its own internal regulations. (Mylan's Compl. at 2; Pharm.'s Compl. ¶¶ 59-62.)

C. Consolidation of Cases With Common Questions

In view of the legal framework and factual background that gives rise to the parties' common claims, the court orders the cases consolidated for the reasons that follow. Rule 42(a) of the Federal Rules of Civil Procedure provides that a court may order a joint hearing or trial of any or all matters in issue before the court that involve a common question of law or fact. See FED.R.CIV.P. 42(a). A court may join related proceedings to "avoid unnecessary costs or delay." Id. Consolidation of cases is "permitted as a matter of convenience and economy in administration, but does not merge the suits into a single cause, or change the rights of the parties, or make those who are parties in one suit parties in another." See Johnson v. Manhattan R Co., 289 U.S. 479, 496-97, 53 S.Ct. 721, 77 L.Ed. 1331 (1933). A court has discretion to consolidate cases under Rule 42(a) if such consolidation will help it manage its caseload with "economy of time and effort for itself, for counsel, and for litigants." See Landis v. American Water Works & Electric Co., 299 U.S. 248, 254, 57 S.Ct. 163, 81 LEd. 153 (1936).

By its plain language, Rule 42(a) permits sua sponte consolidation: "[w]hen actions involving a common question of law or fact are pending before this court . . . it may order all the actions consolidated." FED. R.CIV.P. 42(a) (emphasis added). The United States Court of Appeals for the District of Columbia Circuit has, by its own motion, ordered the consolidation of a number of related cases. See, e.g., United States v. Pless, 1998 WL 315516 (D.C.Cir. 1998); Mankato Citizens Telephone Co. v. FCC, 1996 WL 393512 (D.C.Cir. 1996); American Forest and Paper Association v. EPA, 1995 WL 311743 (D.C.Cir. 1995); Resolution Trust Corp. v. Cohen, 1994 WL 191734 (D.C.Cir. 1994); see also In re Pepco Employment Litigation, 1990 WL 236073, *1 (D.D.C. 1990); Pettersen v. United States, 1987 WL 13351 (D.D.C. 1987). Although a decision to consolidate is appealable after final judgment, it is not disturbed except when the district court has abused its discretion. See NAACP v. Michot, 480 F.2d 547, 548 (5th Cir. 1973); Davis v. Yellow Cab Co., 220 F.2d 790, 791 (5th Cir. 1955) ("the trial court had a large discretion in the matter which will not be interfered with except in a clear case of abuse").*fn6

Mylan v. Henney and Pharmachemie v. Henney are related cases before this court. In each case, the allegations in the complaints, the named defendants and the grounds for relief are similar. In essence, both plaintiffs challenge the March Letter granting Barr's Petition and contend that FDA's determinations expressed therein violate the FDCA and its own regulations. (Pharm's Mem. in Supp. of Mot. for Prelim.Inj. at 2; Mylan's Mem. in Supp. of Mot. for Prelim.Inj. at 2.) Specifically, Pharmachemie challenges the FDA's delay of the effective approval date of its tentatively approved ANDA, while Mylan challenges FDA's determination that Barr, rather than Mylan, is entitled to the Exclusivity Incentive for marketing generic tamoxifen. (Pharm.'s Mem. in Supp. of Mot. for Prelim.Inj. at 1-2; Mylan's Mem. in Supp. of Mot. for Prelim.Inj. at 2.)

While both parties seek to set aside the March Letter, each plaintiff demands different forms of relief. Pharmachemie, for example, seeks to enjoin the FDA from imposing an "indefinite delay" on the effective date of its tamoxifen ANDA. (Pharm.'s Mot. for Prelim.Inj. at 1.) Mylan seeks to enjoin the FDA, but also seeks entitlement to the 180-day Exclusivity Incentive for marketing its generic tamoxifen. (Mylan's Mot. for Prelim.Inj. at 1.) The plaintiffs' requests for different forms of relief do not vitiate the propriety of consolidation, but rather, consolidation is proper to any or all matters in issue which are common. See Cass v. Sonnenblick-Goldman Corp., 287 F. Supp. 815 (E.D.Pa. 1968) (court ordered consolidation despite objections); Mutual Life Ins. Co. v. Hillmon, 145 U.S. 285, 293, 12 S.Ct. 909, 36 L.Ed. 706 (1892) (holding that a court may order consolidation of cases despite opposition by parties when such consolidation is reasonable and avoids unnecessary costs or delays).

Informed by Rule 42(a) and prevailing case law, the court concludes that Mylan and Pharmachemie raise common issues of law and fact. Both allege that the FDA's decision embodied in its March Letter violates 21 U.S.C. § 355(j)(5)(B)(iv). (Mylan's Compl. at 2; Pharm.'s Compl. ¶ 65.) Both seek an order from the court to set aside the March Letter and a declaration that FDA's determination was arbitrary, capricious and without statutory authority. (Mylan's Compl. at 2; Pharm's Compl. ¶¶ 71, 79.) The court concludes that, consolidation to resolve common questions raised by these cases is appropriate. The cases are hereby consolidated in the interest of just, speedy and efficient determination of the actions.


A. Legal Standard for Summary Judgment

Summary judgment may be granted when the pleadings and evidence demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See FED.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Diamond v. Atwood, 43 F.3d 1538, 1540 (D.C.Cir. 1995). A genuine issue is one that could change the outcome of the litigation. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

All evidence and the inferences drawn therefrom must be considered in the light most favorable to the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Summary judgment must be granted if the movant "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the ultimate burden of proof at trial." See Celotex, 477 U.S. at 322, 106 S.Ct. 2548. By pointing out the absence of evidence to support the non-moving party's case, the ...

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