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Cephalon, Inc v. Kathleen Sebelius

July 14, 2011

CEPHALON, INC., PLAINTIFF,
v.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ellen Segal Huvelle United States District Judge

MEMORANDUM OPINION

Plaintiff Cephalon, Inc., a Delaware corporation with its principal place of business in Pennsylvania, has sued Kathleen Sebelius, the Secretary of Health and Human Services, and Margaret Hamburg, the Commissioner of the Food and Drug Administration, in their official capacities. Plaintiff, the manufacturer of Fentora, a name brand or "pioneer" drug, brings this suit under the Administrative Procedure Act, 5 U.S.C. § 701 et seq., claiming that the Food and Drug Administration ("FDA") erroneously approved a generic version of Fentora. Before the Court is defendants' motion to dismiss for lack of subject matter jurisdiction on the grounds that plaintiff lacks standing and its claims are not ripe. For the reasons set forth below, the Court will dismiss this case because it is not ripe.

BACKGROUND

I. REGULATORY FRAMEWORK

Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., a pioneer drug may not be marketed until the FDA has approved a new drug application ("NDA") that includes "full reports of investigations which have been made to show whether or not such drug is safe for use and whether such drug is effective in use" and "a full statement of the composition of such drug." 21 U.S.C. § 355(b)(1). In addition, the pioneer manufacturer must provide the patent number and expiration date of any patent related to the drug. Id. If the FDA approves the pioneer drug, it is published in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book"). See id. The pioneer's listing in the Orange Book includes patents claiming the drug or its method of use. Id.

After a pioneer drug is approved, a generic manufacturer may obtain FDA approval to market a generic version by submitting an Abbreviated New Drug Application ("ANDA"). 21 U.S.C. § 355(j). Instead of relying on its own clinical studies to prove that the generic is effective, the generic manufacturer can show, among other things, that its drug is the same as the pioneer drug in terms of active ingredient(s), route of administration, dosage form, and strength, and that the generic is bioequivalent to the pioneer drug. 21 U.S.C. § 355(j)(2)(A). If the pioneer contains a single active ingredient, the ANDA must include "information to show that the active ingredient of the new drug is the same as that of the listed drug." 21 U.S.C. § 355(j)(2)(A)(ii)(I).

Submission of an ANDA constitutes a patent infringement of patents claiming the pioneer drug. 35 U.S.C. § 271(e)(2). Thus, if the generic manufacturer wants to market its drug before the requisite patent(s) in the Orange Book expires, the generic manufacturer must show "that such patent is invalid or will not be infringed by the manufacture, use, or sale of the [generic] drug for which the application is submitted." 21 U.S.C. § 355(j)(2)(A)(vii)(IV).

II. FACTUAL HISTORY

Plaintiff manufactures the pioneer drug Fentora, which is a "potent opioid analgesic" that is used to treat breakthrough pain in cancer patients who have become tolerant to other opioids. (Complaint ["Compl."] at ¶ 16.) Fentora contains a single active ingredient, fentanyl citrate, which is a Schedule II narcotic. (Id. at ¶ 17.) Fentora comes in a tablet, which is placed inside the patient's mouth to allow the tablet to disintegrate and deliver the fentanyl citrate to the patient's body. (Id.) Clinical studies have shown that pain relief occurs in patients from fifteen to thirty minutes after placing the tablet in the mouth. (Id.) Cephalon listed at least two patents for Fentora in the Orange Book. A third patent, U.S. Patent No. 6,264,981 ("the '981 patent"), was ineligible for listing in the Orange Book*fn1 but was filed with the United States Patent and Trade Office on October 27, 1999, and the patent will expire in 2019. (Defendant's Motion to Dismiss ["Def.'s Mot."] at 3-4 & nn.4-5.) The FDA approved Fentora on September 25, 2006. (Compl. at ¶ 16.)

Watson Laboratories, Inc. ("Watson") filed an ANDA for a generic version of Fentora ("the Watson generic") on July 10, 2007, which was ultimately approved by the FDA on January 7, 2011. (Id. at ¶¶ 18, 25; Def.'s Mot. at 3.) Between the filing of the ANDA and its approval three and a half years later, plaintiff took a number of steps to delay or prevent approval. Plaintiff first attempted to block Watson's ANDA by filing a patent infringement claim based on the two Orange Book patents on June 2, 2008, in federal court in Delaware. (Compl. at ¶ 18.) Plaintiff filed a second patent infringement claim based on the '981 patent in the same court on September 25, 2009. (Id.) The court consolidated both claims and held a bench trial. Cephalon, Inc. v. Watson Pharms., Inc., No. 08-330, 2011 WL 845376, at *1 (D. Del. Mar. 11, 2011) [hereinafter Cephalon I].

During the trial, plaintiff learned that the manufacturing process for the Watson generic could potentially create a second active ingredient (in addition to fentanyl citrate) and that the FDA had knowledge of that possibility. (Compl. at ¶¶ 18, 19.) Based on that information, plaintiff filed a citizen petition with the FDA on July 13, 2010, arguing that the second active ingredient should have prevented the FDA from approving the Watson generic because the FDA's regulations require that the pioneer and the generic have the same active ingredient. (Id. at ¶ 23.) Plaintiff filed a second citizen petition on July 23, 2010. (Id. at ¶ 24.) In that petition, plaintiff asked the FDA "to revise its bioequivalence guidelines" to accommodate Fentora's rapid release of fentanyl citrate by requiring generic manufacturers to prove that the generic could be absorbed into the body as quickly as Fentora. (Id.) On January 7, 2011 (the same day that the FDA approved the Watson generic), the FDA denied both petitions. (Id. at ¶ 25.)

On March 11, 2011, the Delaware court ruled against plaintiff in the first patent suit. Cephalon I, 2011 WL 845376, at *27. However, on March 25, 2011, the court ruled for plaintiff on the second patent claim, finding that the Watson generic violated the '981 patent. Cephalon, Inc. v. Watson Pharms., Inc., No. 09-724, 2011 WL 1088008, at *23 (D. Del. Mar. 24, 2011) [hereinafter Cephalon II]. Following that decision, Cephalon and Watson entered a stipulated agreement and the district court issued a permanent injunction barring Watson from infringing the '981 patent for the life of the patent, which expires in 2019. Cephalon, Inc. v. Watson Pharms., Inc., No. 09-724 (D. Del. Apr. 25, 2011), ECF No. 204 (order granting permanent injunction) (included in Def.'s Mot. as Attach. A); id., (D. Del. Apr. 20, 2011), ECF No. 202 (stipulated agreement for separate judgments and permanent injunction) (included in Plaintiff's Memorandum in Opposition to the Federal Defendants' Motion to Dismiss ["Pl.'s Opp."] at Ex.

1). The agreement reserves the right for Watson to move "to vacate and dissolve the permanent injunction in the event of changed circumstances that Defendants reasonably believe shift the balance of factors relevant to entry of a permanent injunction," including the entry of an additional generic version of Fentora into the market. (Pl.'s Opp. at Ex. 1 at 2.) Watson filed a notice of appeal with the Federal Circuit on April 25, 2011, but the case has not been set for argument.

Plaintiff filed this suit on March 15, 2011. (Compl. at 1.) The Court granted an unopposed motion for Watson to intervene as a defendant on March 22, 2011. Now before the Court is defendants' motion to ...


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