United States District Court, District of Columbia
MYLAN LABORATORIES LTD.; Mylan Pharmaceuticals, Inc., Plaintiffs,
U.S. FOOD AND DRUG ADMINISTRATION, et al., Defendants, and Ranbaxy Laboratories Limited, Intervenor-Defendant.
Edward Anthony Figg, Rothwell, Figg, Ernst & Manbeck, PC, Washington, DC, Eric R. Hunt, Lara E. Fitzsimmons, William A. Rakoczy, Rakoczy Molino Mazzochi Siwik LLP, Chicago, IL, Sharon Lynch Davis, Rothwell, Figg, Ernst & Manbeck, P.C., Washington, DC, for Plaintiffs.
Andrew E. Clark, U.S. Department of Justice, Washington, DC, for Intervenor-Defendant.
JOHN D. BATES, District Judge.
On September 28, 2012, the Food and Drug Administration (" FDA" ) decided that Ranbaxy Laboratories Limited (" Ranbaxy" ) had not forfeited its eligibility for 180-day exclusivity to market generic valsartan tablets. Because of this decision, plaintiffs Mylan Laboratories Limited and Mylan Pharmaceuticals, Inc. (" Mylan" ) are blocked from marketing their generic valsartan tablets. Mylan brings this action challenging FDA's decision under the Administrative Procedure Act (" APA" ) and the Drug Price Competition and Patent Term Restoration Act of 1984 (the " Hatch-Waxman Act" ), as amended by the Medicare Modernization Act of 2003. Before the Court are Mylan's motion for a preliminary injunction to set aside FDA's September 28, 2012 decision and to require FDA to grant final approval to Mylan's abbreviated new drug application, FDA's motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), or in the alternative, for summary judgment, and intervenor-defendant Ranbaxy's motion for summary judgment. Upon consideration of the parties' motions and accompanying memoranda, the motions hearing held on December 7, 2012, and the entire record herein, the Court will deny Mylan's motion for a preliminary injunction and grant FDA's and Ranbaxy's motions.
I. Statutory and Regulatory Background
This is a dispute about the right to 180-day marketing exclusivity under the Hatch-Waxman Act, codified at 21 U.S.C. § 355 and 35 U.S.C. §§ 156, 271, 282, as amended by the Medicare Modernization Act, Pub.L. No. 108-173, §§ 1101-23, 117 Stat.2066 (2003).
To gain FDA approval to market a new drug, a pharmaceutical company must submit a new drug application (" NDA" ) that must include, among other things, information on the drug's chemical composition, clinical trial results showing the drug's safety and effectiveness, a description of the methods of manufacturing the drug, and proposed labeling for the drug. See 21 U.S.C. § 355(b)(1). An NDA must also include information on any patent that claims the drug or a method of using the drug. Id. FDA lists this patent information in Approved Drug Products with Therapeutic Equivalence Evaluations, a publication also known as the " Orange Book." See Mylan Pharm., Inc. v. Sebelius, 856 F.Supp.2d 196, 200 (D.D.C.2012); 21 C.F.R. § 314.53(e)-(f).
Pursuant to the Hatch-Waxman Act, a pharmaceutical company seeking to market a generic version of an approved drug is not required to submit an NDA and hence can avoid conducting costly and time-consuming clinical trials to show safety and effectiveness. See Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1063 (D.C.Cir.1998). Instead, it can submit an abbreviated new drug application (" ANDA" ) showing that the generic drug is " bioequivalent" to the approved drug and meets certain chemistry and labeling requirements. See 21 U.S.C. § 355(j)(2)(A). One requirement for chemistry relates to a drug's strength, quality, and purity. " Monographs" setting forth test methods and drug specifications for determining strength, quality, and purity are published in an official compendium called the United States Pharmacopeia (" USP" ), and if a USP monograph exists for an approved drug, an ANDA referencing that drug must meet the standards set forth in the monograph to gain FDA approval. See 21 U.S.C. §§ 321(j), 351(b).
In addition, an ANDA must contain one of four certifications as to each Orange Booklisted patent claiming the approved drug or a method of using the approved drug. The four certifications are: (I) that there is no patent information; (II) that the patent has expired; (III) that the patent is set to expire on a certain date (" paragraph III certification" ); or (IV) that the patent is invalid or will not be infringed by the generic drug (" paragraph IV certification" ). Id. § 355(j)(2)(A)(vii)(I)-(IV). If an ANDA applicant makes one of the first two certifications, FDA may approve the ANDA immediately. Id. § 355(j)(5)(B)(i). If an ANDA applicant makes a paragraph III certification, FDA may grant tentative approval of the ANDA, to be made effective on the date the patent expires. Id. § 355(j)(5)(B)(ii).
The effect of a paragraph IV certification is more complex. By statute, making a paragraph IV certification constitutes an act of patent infringement. See 35 U.S.C. § 271(e)(2)(A). An ANDA applicant that makes a paragraph IV certification must notify the patent holder of the certification, and the patent holder then has 45 days to bring a patent infringement suit against the ANDA applicant. See 21 U.S.C. § 355(j)(2)(B), (5)(B)(iii). If the patent holder does not bring suit within 45 days, FDA may approve the ANDA immediately. See id. § 355(j)(5)(B)(iii). But if the patent holder sues the ANDA applicant, then FDA must delay approval for 30 months. See id.
To incentivize generic manufacturers to risk exposing themselves to patent infringement
litigation, and thereby to bring lower-priced generic drugs to consumers faster, Congress provided that, for a given drug, the " first applicant" to file an ANDA containing a paragraph IV certification is eligible for a 180-day period of marketing exclusivity. 21 U.S.C. § 355(j)(5)(B)(iv). During this period, FDA may not approve any later-filed ANDAs, thus allowing the first applicant to sell its generic drug without competition from other generic manufacturers. See Mylan, 856 F.Supp.2d at 201.
The 180-day exclusivity period may be forfeited, however. In the Medicare Modernization Act of 2003, Congress added to the Hatch-Waxman scheme six " forfeiture events" ; if any one of these events occurs, a first applicant forfeits its entitlement to 180-day exclusivity. See 21 U.S.C. § 355(j)(5)(D)(i)-(ii); Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303, 1306 (D.C.Cir.2010). One such forfeiture event, and the only one at issue here, is " [f]ailure to obtain tentative approval." See 21 U.S.C. § 355(j)(5)(D)(i)(IV). A first applicant forfeits exclusivity if it " fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed." Id. FDA has interpreted this forfeiture provision to establish a " bright-line rule" and has made clear that to invoke the exception to the rule, a first applicant cannot show merely that FDA changed or reviewed the requirements for approval but must also show that " one or more issues holding up tentative approval at the 30 month date [was] causally connected to the approval requirements that FDA reviewed or changed." Mem. from Martin Shimer, Branch Chief, Regulatory Support Branch, Office of Generic Drugs (" OGD" ), on 180-Day Exclusivity for Valsartan Tablets 1-2 (Sept. 28, 2012) [AR 1-12] (" Forfeiture Memo" ).
But-for causation is not required to meet this exception. Id. That is, " [i]f one of the causes of failure to get tentative approval by the 30-month forfeiture date was a change in or review of the requirements for approval imposed after the application was filed, an applicant will not forfeit eligibility even if there were other causes for failure to obtain tentative approval by the 30-month forfeiture date that were not caused by a change in or review of the requirements for approval." Id. Hence, " an applicant need only show that acceptability of one aspect of the ANDA (e.g., chemistry) was delayed due to a change in or review of the requirements for approval, irrespective of what other elements may also have been outstanding at the 30-month date." Id.
II. Factual and Procedural Background
On December 28, 2004, Ranbaxy filed an ANDA to market a generic version of valsartan tablets (40 mg, 80 mg, 160 mg, and 320 mg), a hypertension drug currently marketed by Novartis Pharmaceuticals Corp. under the brand name Diovan. Id. at 3. Three patents for Diovan are listed in the Orange Book: U.S. Patent Nos. 5,399,578 (the '578 patent), 5,972,990 (the '990 patent), and 6,294,197 (the '197 patent). Ranbaxy's Mem. in Supp. of Mot. for Summ. J. [ECF 38] (" Ranbaxy MSJ" ) 11. Ranbaxy's ANDA contained a paragraph III certification as to the '578 patent, a paragraph IV certification as to the '197 patent, and, not relevant here, a " section viii statement" for the '990 patent. Id. 
Because Ranbaxy's ANDA was the first to contain a paragraph IV certification as to a Diovan patent, Ranbaxy was a " first applicant" eligible for 180-day exclusivity. See id.
Ranbaxy did not receive tentative approval within 30 months, however. As of June 28, 2007, 30 months after Ranbaxy's ANDA was filed, bioequivalence had been found acceptable, but the elements of chemistry and labeling remained outstanding. Forfeiture Memo 5. Between the filing of Ranbaxy's ANDA and the June 28, 2007 forfeiture date, there had been changes to the approval requirements for both labeling and chemistry. First, on November 22, 2006, FDA approved a labeling supplement for Diovan that consisted of changes to three sections of the drug's labeling. Id. at 7 & n. 11. Second, on May 1, 2007 (about two months before the 30-month forfeiture date), a new USP monograph for valsartan became official. See id. at 4-5. Ranbaxy thereafter submitted, on June 26, 2007, a chemistry amendment to its ANDA proposing changes to its drug substance specifications and test methods to comply with the USP monograph. Id. at 5. During a telephone conference on July 2, 2007, FDA asked Ranbaxy to provide data showing equivalence between Ranbaxy's in-house test methods and the methods set forth in the new USP monograph. Id. at 6. Ranbaxy submitted another chemistry amendment on July 5, 2007. Id.
After reviewing Ranbaxy's chemistry amendments, FDA tentatively approved Ranbaxy's ANDA on October 25, 2007, nearly four months after the 30-month forfeiture date. Id. at 4, 6. On that date, FDA sent Ranbaxy a letter informing Ranbaxy that its ANDA was tentatively approved and stating: " This letter does not address issues related to the 180-day exclusivity provisions under section 505(j)(5)(B)(iv) of the [Federal Food, Drug, and Cosmetic] Act, except to note that for purposes of sections 505(j)(5)(B)(iv) and 505(j)(5)(D)(i)(IV), the agency regards the change in the USP monograph for Valsartan, published on May 1, 2007, in response to which you submitted an amendment on June 17, 2007, to be a change in the requirements for approval imposed after the date on which your ANDA was filed." Letter from Gary Buehler, Dir., OGD, to Ranbaxy (Oct. 25, 2007) [AR 14-16]. In the letter, FDA made no determination on whether this change caused Ranbaxy's failure to obtain tentative approval by the 30-month forfeiture date. See id. 
About a year later, on September 15, 2008, Mylan filed an ANDA to market a generic version of valsartan tablets. Mylan's Mot. for Prelim. Inj. [ECF 17] (" Mylan PI Mot." ), Declaration of Wayne Talton [ECF 17-5] (" Talton Decl." ) ¶ 4. Like Ranbaxy's ANDA, Mylan's ANDA contained a paragraph III certification as to the '578 patent, a paragraph IV certification as to the '197 patent, and a section viii statement for the '990 patent. Id. ¶ 6. Because Mylan knew that Ranbaxy had not obtained tentative approval before the 30-month forfeiture date, and was " not aware of any change in or review of the relevant approval requirements," it " understood and believed" that its ANDA would be eligible for final approval on September 21, 2012, the date that the pediatric exclusivity period for '578 patent was set to expire. Id. ¶ 10. As such, Mylan sent three letters— on July 24, September 17, and September 21, 2012— to FDA seeking confirmation that Ranbaxy had forfeited
its exclusivity and asking FDA to grant final approval to Mylan's ANDA on September 21, 2012. Forfeiture Memo 7-8.
On September 21, 2012, FDA made public its October 25, 2007 tentative approval letter to Ranbaxy. Talton Decl. ¶ 19. Then on September 28, FDA took three actions related to Ranbaxy's and Mylan's ANDAs. First, as set forth in a 12-page memorandum, FDA determined that Ranbaxy had not forfeited its eligibility for 180-day exclusivity because its efforts to comply with the USP monograph, and FDA's review thereof, " were a cause of" Ranbaxy's failure to obtain tentative approval within 30 months. Forfeiture Memo 12. FDA therefore found it unnecessary to determine whether the November 22, 2006 labeling change was also a cause of the failure to obtain tentative approval. Id. at 7. Second, FDA tentatively approved Mylan's ANDA. Mylan PI Mot., Letter from Gregory P. Geba, Dir., OGD, to Mylan [ECF 17-10] 1 (Sept. 28, 2012). FDA explained that it was " unable at [that] time to grant final approval to [Mylan's] ANDA because another applicant [Ranbaxy] submitted an ANDA" before Mylan. Id. at 2. Hence, Ranbaxy's ANDA was " eligible for 180-day exclusivity" and Mylan's ANDA would be " eligible for final approval upon the expiration of [Ranbaxy's] 180-day exclusivity ... or [upon] that exclusivity [being] otherwise resolved." Id. Third, FDA responded to Mylan's letters, stating:
FDA has carefully considered the arguments set forth in Mylan's three letters in determining that the ANDA sponsor [Ranbaxy] that is eligible for 180-day exclusivity has not forfeited its eligibility. Due to the regulatory restriction on disclosure of information in an unapproved ANDA, however, we cannot provide you the basis on which the Agency determined that the first applicant for valsartan tablets has not forfeited its eligibility because that analysis rests on confidential information contained in that application. FDA appreciates the challenge this presents to you and other parties affected by a forfeiture analysis, but the Agency is nonetheless prohibited at this time from disclosing any additional information regarding the forfeiture decision.
Mylan PI Mot., Letter from Robert L. West, Deputy Dir., OGD, to William A. Rakoczy [ECF 17-10] 4 (Sept. 28, 2012) (footnote omitted).
Mylan now stands ready to market its generic valsartan tablets but is prevented from doing so by Ranbaxy's continuing eligibility for 180-day exclusivity. Mylan filed an action in this Court on October 2, 2012, and moved for a preliminary injunction two days later. FDA has moved to dismiss Mylan's complaint or, in the alternative, for summary judgment. Ranbaxy intervened as a ...