The opinion of the court was delivered by: Urbina, District Judge.
ORDERING CONSOLIDATION OF CASES; DENYING MYLAN'S AND
PHARMACHEMIE'S MOTIONS FOR INJUNCTIVE RELIEF; DENYING
MYLAN'S AND PHARMACHEMIE'S MOTIONS TO INTERVENE;
REMANDING TO FDA FOR PERMISSIBLE INTERPRETATION
OF 21 U.S.C. § 355 (j)(5)(B)(iv) AND REGULATION
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.
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
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,
(i) Paragraph IV and Expedited Approval
(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
(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).
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.
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
(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
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. ¶¶
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
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
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 ...