United States District Court, District of Columbia
RANDOLPH D. MOSS, District Judge.
Amarin Pharmaceuticals Ireland Limited ("Amarin") challenges the Food and Drug Administration's determination that Amarin's new drug, Vascepa (icosapent ethyl) Capsules ("Vascepa"), is not entitled to a five-year period of market exclusivity under the Federal Food, Drug, and Cosmetic Act ("FDCA"). That period of exclusivity is available for a new drug, if "no active ingredient (including any ester or salt of the active ingredient)" of the drug "has been approved in any other application" for new drug approval. Here, the Food and Drug Administration ("FDA" or "Agency") denied five-year market exclusivity for Vascepa because Vascepa's active ingredient-a single molecule-is one component of a mixture that makes up the "active ingredient" of a previously approved drug. For the reasons set forth below, the Court concludes that the FDA's decision must be set aside, and the matter is remanded to the Agency for further proceedings consistent with this decision.
A. Statutory and Regulatory Background
1. The Hatch-Waxman Amendments
In 1984, Congress enacted the Drug Price Competition and Patent Term Restoration Act, Pub. L. No. 98-417, 98 Stat. 1585 (1984). Popularly known as the "Hatch-Waxman Amendments, " the Act sought to balance two competing policy goals: (1) encouraging the development of generic drugs to increase competition and lower prices in the pharmaceutical industry, while (2) maintaining incentives for pharmaceutical companies to invest in innovation and the creation of new drugs. Facing this "classic question of the appropriate trade-off between greater incentives for the invention of new products and greater affordability of those products, " Abbott Labs. v. Young, 920 F.2d 984, 985 (D.C. Cir. 1990), Congress struck a compromise. It established an expedited process for obtaining approval for generic drugs, but, at the same time, it provided increased intellectual property rights and periods of market exclusivity for those pioneer manufacturers that invent new drugs.
The two sides of the compromise are codified in separate aspects of the Hatch-Waxman Amendments. On the one hand, to streamline the process for bringing new generic drugs to market, Congress created the "abbreviated new drug application" ("ANDA") process, under which a manufacturer can obtain FDA approval for a generic drug by demonstrating that it has the same "active ingredient" or "active ingredients" as a drug previously approved as safe and effective and that the generic drug is otherwise equivalent to that drug. See 21 U.S.C. § 355(j)(2)(A). This significantly reduces the time and expense required to obtain approval for generic drugs; previously, in order to obtain approval in most cases, manufacturers were required to submit a full "new drug application" ("NDA") with clinical data sufficient to demonstrate the drug's safety and effectiveness, even where the drug was merely a generic version of a previously approved drug.
On the other hand, in order to maintain incentives for pioneer drug manufacturers to research and invest in new drugs, Congress provided that most drugs with new "active ingredients" would be entitled to a five-year period of marketing exclusivity. Specifically, Congress provided a five-year period of exclusivity for approved new drugs, "no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application." 21 U.S.C. §§ 355(c)(3)(E)(ii), 355(j)(5)(F)(ii). Esters and salts are molecules that form in chemical reactions when the hydrogen atom of an acid molecule is replaced by another substance. Esters and salts are typically closely related to their parent acid molecules.
Congress also provided a more limited three-year period of exclusivity for new drugs that contain "an active ingredient (including any ester or salt of the active ingredient) that has been approved in another application" in certain circumstances where the drug's sponsor was required to conduct new research to gain approval. See 21 U.S.C. §§ 355(c)(3)(E)(iii), 355(j)(5)(F)(iii). This three-year exclusivity period applies where, for instance, a previously approved drug is approved to treat a new condition, or where approval is sought for a new salt or ester form of the active ingredient in a previously approved drug. In practice, however, more than two years separates the five- and three-year exclusivity periods, since the five-year exclusivity provision bars the FDA from accepting an application for approval of a competing drug, see 21 U.S.C. §§ 355(c)(3)(E)(ii), 355(j)(5)(F)(ii), while the three-year exclusivity provision merely precludes FDA from approving such an application, 21 U.S.C. §§ 355(c)(3)(E)(iii), 355(j)(5)(F)(iii). Because it often takes considerable time for the FDA to approve an application once it is accepted, the difference in the length of the actual periods of exclusivity under the two provisions can be significantly greater than two years.
2. FDA Regulations And Abbott Labs
Section 314.108 of the FDA's regulations implements the five-year exclusivity provision. See 21 C.F.R. § 314.108. Although the statute refers to a new drug's "active ingredient, " the regulations do not directly define that term. Instead, they grant five-year exclusivity to "new chemical entit[ies]." 21 C.F.R. § 314.108(b)(2). The regulations define a "new chemical entity" (or "NCE") as any "drug that contains no active moiety that has been approved by FDA in any other application submitted under section 505(b)." 21 C.F.R. § 314.108(a). "Active moiety, " in turn, is defined as "the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance." Id. For salts, esters, and noncovalent derivatives, a molecule's "active moiety" can be thought of as its core; salt, ester and noncovalent derivative versions of the same basic molecule have different appendages, but they share the same active moiety. In other words, the FDA interpreted the statutory requirement that five-year exclusivity be granted to drugs no "active ingredient (including any ester or salt of the active ingredient) of which has been approved" to provide five-year exclusivity only to drugs that contain no active moiety that has been approved in a prior application.
The regulatory history makes clear that the Agency adopted the "active moiety" approach to address an issue that is not implicated in this case: the availability of exclusivity for multiple closely related forms of the same basic molecule. By defining "active moiety" to mean "the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt, ... or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, " 21 C.F.R. § 314.108(a) (emphasis added), the FDA was able to withhold exclusivity not only from esters or salts of a previously approved molecule, but also from other derivative molecules that it concludes are insufficiently innovative to merit five-year exclusivity.
When the FDA first proposed regulations implementing this "active moiety" approach in 1989, it explained that the approach was justified because, in its view, Congress "did not intend to confer significant periods of exclusivity on minor variations of previously approved chemical compounds." See Abbreviated New Drug Application Regulations, 54 Fed. Reg. 28, 872, 28, 898 (proposed July 10, 1989). Almost a year and a half after the FDA issued those proposed regulations, the Court of Appeals addressed the FDA's interpretation of the statutory exclusivity provision in Abbott Laboratories v. Young, 920 F.2d 984 (D.C. Cir. 1990) (" Abbott Labs "). In that case, the FDA argued that it could treat all forms of a molecule that eventually produce the same "active moiety" alike for purposes of exclusivity. See id. at 988. The Agency sought to tether this authority to the statutory text by construing the term "including" broadly, and arguing that the parenthetical phrase "( including any ester or salt of the active ingredient)" was "merely illustrative." Id. With the statute so construed, the FDA argued that it was permitted to treat other forms of an active ingredient in the same manner as "esters" and "salts." See id.; Abbreviated New Drug Application Regulations; Patent And Exclusivity Provisions, 59 Fed. Reg. 50, 338, 50, 358 (final rule) (explaining that in Abbott Labs, the FDA interpreted the term "active ingredient" "narrowly to refer to the form of the moiety in the product, but interpreted the parenthetical phrase (including any salt or ester of the active ingredient)' broadly to include all active ingredients that are different but contain the same active moiety."). The Court of Appeals rejected that interpretation of the exclusivity provision as "linguistically infeasible." Abbott Labs, 920 F.2d at 988.
The FDA did not retreat from its "active moiety" approach. Instead, in 1994 it promulgated the final regulations discussed above, under which five-year exclusivity is available only for "new chemical entities"-that is, drugs that do not contain any previously approved "active moiety." But rather than justifying the regulations on an expansive reading of the word "including, " as it had proposed in Abbott Labs, the FDA explained in the preamble to the Final Rule that its construction of the statute now turned on the meaning of the phrase "active ingredient." See 59 Fed. Reg. at 50, 358. In particular, the Agency construed "active ingredient" to mean "active moiety, " see id., and then defined "active moiety" to mean "the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt, ... or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule." 21 C.F.R. § 314.108(a). Although taking a different route, the FDA ultimately reached the same conclusion that it did before Abbott Labs: The five-year exclusivity provision, in FDA's view, applies only to drugs that do not contain a previously approved "active moiety."
B. Factual And Procedural Background
In 2004, the FDA approved a new drug application for Lovaza (omega-3-acid ethyl esters) Capsules ("Lovaza"), an adjunct to diet intended to reduce triglyceride levels in adults with severe hypertriglyceridemia. AR 2-3, AR 144. The sole "active ingredient" of Lovaza is a mixture that is primarily composed of seven kinds of omega-3 fatty acid ethyl esters. Two of the seven esters-the esters of eicosapentaenoic acid ("EPA") and docosahexaenoic acid ("DHA")- make up approximately 85% of the mixture. The rest of the mixture consists of the other five ethyl esters and other uncharacterized components.
Although portions of Lovaza's label refer to specific components of the mixture, there is no dispute that its sole "active ingredient" is the mixture as a whole. Indeed, as recently as 2014, the FDA rejected a request by Lovaza's sponsor to re-characterize Lovaza's "active ingredients" as the separate components of the mixture. In denying that request, the FDA explained that because the Lovaza mixture has not been "fully characterized, " the FDA has identified the "entire fish oil mixture as the active ingredient of Lovaza." FDA, Citizen Petition Response, Docket No. FDA-2013-P-0148 (Feb. 21, 2014) ("Lovaza Citizen Petition Response"). As the Agency explained, "when naturally derived mixtures are not sufficiently characterized to precisely identify every molecule that meaningfully contributes to the activity of the mixture, it is difficult to define the active ingredient in terms of the specific components of [the] mixture." Id. at 6. Accordingly, "[i]n such cases, the Agency may identify the entire mixture as the active ingredient of the product." Id. Consistent with this approach, the FDA's directory of Approved Drug Products with Therapeutic Equivalence Evaluations (known as the "Orange Book"), which lists each drug that the FDA has approved "for safety and effectiveness" as required by 21 U.S.C. § 355(c)(7)(A), identifies the entire Lovaza mixture-that is, "omega-3-acid ethyl esters"-as Lovaza's "active ingredient." See Electronic Orange Book Query, available at http://www.accessdata.fda.gov/scripts/cder/ob/docs/temptn.cfm (last visited on May 27, 2015).
This case deals with a collateral consequence of the FDA's "active moiety" approach that arises when a drug's "active ingredient" is made up of multiple molecules and thus potentially multiple "active moieties." As explained above, when the FDA determines whether a new drug is eligible for five-year exclusivity, it focuses on the "active moiety" of the new drug. When comparing single-molecule drugs, the inquiry is straightforward: The FDA takes a new drug's single-molecule active ingredient, removes certain appendages (those that make it a salt, ester, or other noncovalent derivative) to identify its "active moiety, " and then evaluates whether any previously approved single-molecule drug shares that same "active moiety." As discussed below, this analysis becomes more complicated when the FDA applies its "active moiety" approach to mixtures that contain a single "active ingredient" but multiple "active moieties."
Amarin is a biopharmaceutical company that focuses on products to improve cardiovascular health. On July 26, 2012, the FDA approved Amarin's new drug application for Vascepa. Like Lovaza, Vascepa was approved as an adjunct to diet to reduce triglyceride levels in adults with severe hypertriglyceridemia. The sole active ingredient of Vascepa is a single molecule: icosapent ethyl, the ethyl ester of EPA. EPA, as noted above, is a significant component of the previously approved Lovaza mixture.
When Amarin applied for approval of Vascepa, it had already been in discussions with the FDA regarding both the approval process and the level of exclusivity to which Vascepa would be entitled. On June 14, 2008, representatives from Amarin attended a pre-investigational new drug ("Pre-IND") meeting with the FDA to discuss what studies the FDA would require to approve Vascepa. The FDA's minutes from that meeting indicate that the parties discussed the FDA's preliminary answers to a list of Amarin's questions. AR 1044. Two of those questions were whether Vascepa, if approved, would qualify as a "new chemical entity" based on the fact that it was a "single-entity active product that is molecularly distinct from any other approved product, " and whether it would accordingly be entitled to five years of exclusivity. AR 1044. The FDA's preliminary answer to both questions was "Yes." AR 1044. The Agency's guidance regarding Vascepa's proposed clinical research protocol, moreover, was expressly predicated on the assumption that Vascepa was a "new chemical entity." The FDA required Amarin, for instance, to perform extra carcinogenicity studies because "it is generally expected that a carcinogenicity study be conducted in two rodent species to support the marketing approval of a new chemical entity for a chronic use indication." AR 1042 (emphasis added).
Based on the FDA's guidance at the pre-IND meeting, Amarin developed a research protocol and began conducting research in accordance with that guidance. See Dkt. 28 at 4. Ten months later, however, on May 20, 2009, an FDA representative informed Amarin that the Agency's previous indication that Vascepa would be entitled to five years of exclusivity was "not correct" because ethyl EPA is "a component of an approved product." AR 1039. Amarin asked for an opportunity to dispute that conclusion, AR 1038, and, the next day, the company sent the FDA a letter explaining the basis for its understanding that its "EPA drug product" should be entitled to five-year exclusivity, AR 1046. Among other things, Amarin argued that "Lovaza is a single active ingredient product containing" multiple "omega-3-acid ethyl esters." AR 1047. In an effort to satisfy the FDA's "active moieties" approach, Amarin then argued that the ester of EPA is just one of the multiple esters that combine to form a "single active moiety" in Lovaza. AR 1047. Following this logic, Amarin maintained that "[b]ecause the single active moiety in Lovaza encompasses more than EPA, it must be distinct from EPA alone, " and thus Vascepa does not contain a previously approved active ingredient or active moiety. AR 1047. Four months later, on September 21, 2009, the FDA responded that it would not consider whether Vascepa was entitled to five-year exclusivity until it reviewed the final new drug application for Vascepa. AR 1047.
Amarin submitted its new drug application, along with a request for five-year exclusivity, in September 2011. AR 1032-37. In its request for exclusivity, Amarin emphasized that EPA was not an "active ingredient" that was "approved in the NDA covering Lovaza, " because Lovaza was approved as a single active ingredient product and there was "no evidence" demonstrating whether specific components of the Lovaza mixture were active ingredients. AR 1033. In subsequent filings, Amarin explained that in its view, the "key legal issue" was "whether the prior approval of a drug product, the active ingredient of which is a complex mixture of constituents, constitutes approval of each constituent as an active ingredient so as to preclude NCE exclusivity for a new drug product in which one of those constituents alone is the active ingredient." AR 51.
Amarin's new drug application for Vascepa was approved on July 26, 2012, but the FDA did not make a decision regarding five-year exclusivity at that time. See AR 73. Instead, the FDA issued a "General Advice" letter asking for Amarin's response to several precedents that the Agency viewed as consistent with the denial of exclusivity for Vascepa, and Amarin responded to that inquiry. AR 1050. The FDA reached a decision on February 21, 2014, eighteen months after Vascepa was approved. It concluded that Vascepa is not entitled to five-year exclusivity because "EPA, the single active moiety in Vascepa, was also an active moiety contained in" Lovaza. AR 1.
3. The FDA's Decision Denying Exclusivity
In its decision, the FDA explained that the statutory and regulatory authorities "focus principally on single component active ingredients, " rather than naturally derived mixtures, and "that neither the statute nor the regulations expressly address 5-year NCE [new chemical entity] exclusivity in the context of naturally derived mixtures." AR 6. The Agency further noted that its prior decisions and statements "have not necessarily resulted in consistent ...