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Otsuka Pharmaceutical Co. Ltd. v. Burwell

United States District Court, District of Columbia

July 28, 2016

OTSUKA PHARMACEUTICAL CO., LTD., et al., Plaintiffs,
v.
SYLVIA MATHEWS BURWELL, in her official capacity as Secretary of the United States Department of Health and Human Services, et al., Defendants, and ALKERMES, INC., et al., Intervenor-Defendants.

          MEMORANDUM OPINION

          KETANJI BROWN JACKSON United States District Judge

         To incentivize the development and marketing of safe, effective, and affordable drug products, the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 321 et seq., provides a variety of benefits for drug manufacturers, including prescribed periods of “exclusivity” in the marketplace. Drug manufacturers that develop and get approval for drug products containing entirely new chemical entities-i.e., drugs in which “no active ingredient” has ever before been approved for marketing-receive a five-year period of exclusivity for marketing that drug product, during which time the Food and Drug Administration (“the FDA”) is prohibited from approving applications for the marketing of certain other drugs. 21 U.S.C. § 355(c)(3)(E)(ii); see also 21 C.F.R. § 314.108(b)(2). Similarly, if a manufacturer submits an application for a drug product that contains a previously approved active ingredient, and if certain “new clinical investigations” are included in that application, that manufacturer can claim a three-year period of marketing exclusivity for the drug in that application. See 21 U.S.C. § 355(c)(3)(E)(iii); see also 21 C.F.R. § 314.108(a), (b)(4). These provisions and others demonstrate Congress’s clear intent to establish a statutory and regulatory scheme that provides a substantial reward (marketing exclusivity) for those pharmaceutical companies that either invest in the development of entirely new drug substances or that study existing chemical compounds to demonstrate that they can be safe and effective when prescribed for use in a new way.

         In the instant case, Plaintiff Otsuka Pharmaceuticals Company Limited (along with related entities, collectively referred to herein as “Otsuka”) asserts that the FDA has improperly truncated its right to marketing exclusivity for its drug Abilify Maintena, which the FDA approved in 2013 for the treatment of schizophrenia in acutely relapsed patients. It is undisputed that Abilify Maintena and a related supplement received three-year periods of exclusivity under the FDCA; in the instant lawsuit, Otsuka maintains that the FDA ran afoul of the FDCA and its own regulations in October of 2015, when it approved Intervenor Alkermes’s application for Aristada- a drug product that also treats schizophrenia and is administered in the same way as Abilify Maintena but that contains a different “active moiety” than Otsuka’s drug. (See Compl., ECF No. 1, ¶ 52 (“FDA denied Otsuka’s citizen petition and approved the Alkermes [new drug application] in derogation of Otsuka[’s] exclusivity rights.”).) Otsuka’s three-count complaint, which it filed against the FDA and other associated official-capacity defendants (referred to herein, collectively, as the “FDA”), specifically asserts that the FDA’s approval of Aristada within the three-year windows of exclusivity that were afforded to Abilify Maintena and its supplement violated the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-06, because that approval contravened the FDCA (Count One) and the agency’s own regulations (Count Two), and because, without implementing the APA’s notice-and-comment procedures, the agency essentially promulgated a new rule regarding the circumstances under which the FDA will consider a subsequent drug application to be barred (Count Three). (See Compl. ¶¶ 51-74.)

         Before this Court at present are three cross-motions for summary judgment that the parties in this matter have filed. (See Pls.’ Mot. for Summ. J. (“Pls.’ Mot.”), ECF No. 24; Defs.’ Cross Mot. for Summ. J. (“Defs.’ Mot.”), ECF No. 26; Intervenor-Defs.’ Mot. for Summ. J. (“Alkermes’s Mot.”), ECF No. 27.) Each motion first addresses a question of statutory interpretation regarding the meaning of the applicable exclusivity provisions of the FDCA, and in particular, the issue of whether or not the FDA may read that statute and its own regulations to establish an exclusivity bar that extends only to second-in-time applications for a drug with the same “active moiety” as the drug with exclusivity. This Court has applied the legal analysis established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), and as explained fully below, it concludes that the FDCA does not unambiguously prevent the FDA from determining that the FDCA’s three-year exclusivity bar blocks only subsequent applications for drugs with the same active moiety, and that it was not unreasonable for the FDA to have employed that interpretation when it considered the applications at issue here. Similar reasoning compels the Court to reject Otsuka’s contention that the FDA violated its own regulations, and Otsuka’s notice-and-comment claim also necessarily fails because it is premised on the faulty contention that, when the FDA decided to approve Aristada despite Abilify Maintena’s exclusivity, the agency thereby amended a regulation that unambiguously required the opposite result. Consequently, the summary judgment motions that the FDA and Alkermes have filed will be GRANTED and Otsuka’s motion for summary judgment will be DENIED. A separate order consistent with this Memorandum Opinion will follow.

         I. BACKGROUND

         A. Marketing Approval And Exclusivity Under The FDCA

         Originally enacted in 1938, the FDCA “governs the pharmaceutical drug approval process for both new and generic drugs.” Veloxis Pharm., Inc. v. FDA, 109 F.Supp.3d 104, 107 (D.D.C. 2015) (citation omitted); see also Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156, 2163 n.4 (2012). In 1984, Congress amended the statute via the Drug Price Competition and Patent Term Restoration Act (“Hatch-Waxman Amendments”), Pub. L. No. 98-417, 98 Stat. 1585, in a manner that strikes a balance between “‘two competing interests in the pharmaceutical industry: (1) inducing pioneering research and development of new drugs[, ] and (2) enabling competitors to bring low-cost, generic copies of those drugs to market[, ]’” Takeda Pharm., U.S.A., Inc. v. Burwell, 78 F.Supp.3d 65, 68 (D.D.C. 2015) (quoting Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353, 1355 (Fed. Cir. 2008)). As mentioned, one critical aspect of this Hatch-Waxman balance is the period of marketing exclusivity that is afforded to pharmaceutical companies under certain circumstances, the primary purpose of which is to incentivize companies to invest substantial time and money into developing useful drug products. See, e.g., Abbott Labs. v. Young, 920 F.2d 984, 985 (D.C. Cir. 1990) (noting that the exclusivity provisions aim, in part, to protect “the interests of drug manufacturers who produce new drugs” by providing “greater incentives for the invention of new products”); see also Abbreviated New Drug Application Regulations; Patent and Exclusivity Provisions (“1994 Rule”), 59 Fed. Reg. 50, 338, 50, 358 (Oct. 3, 1994) (“1994 Rule”) (observing that the three-year-exclusivity provision was “created . . . to protect products whose development required a significant time commitment and ‘an investment of some magnitude’” (citing legislative history)).

         The first step on the road to receiving marketing exclusivity is to seek and obtain FDA approval for the marketing of a “new” drug pursuant to a process that is set forth in the U.S. Code and that has been fully explained in several published opinions in this district. See, e.g., Takeda Pharm., 78 F.Supp.3d at 71-72 (discussing 21 U.S.C. § 355); see also Ferring Pharm., Inc. v. Burwell, No. 15-0802, 2016 WL 1060199, at *2 (D.D.C. March 15, 2016) (same).[1] Specifically, as amended, the FDCA “requires drug manufacturers seeking to market a new drug to first obtain FDA approval via one of three different application pathways: (1) a full New Drug Application (‘NDA’); (2) an Abbreviated New Drug Application (‘ANDA’); or (3) an intermediate process known as a Section 505(b)(2) NDA.” Takeda Pharm., 78 F.Supp.3d at 71 (citing 21 U.S.C. § 355). The requirements for the full NDA and Section 505(b)(2) pathways, which are the only methods implicated in the instant case, are set forth in section 505(b) of Hatch-Waxman, which has been codified at 21 U.S.C. § 355(b).[2]

         Hatch-Waxman’s subsection 505(b)(1) provides a detailed list of what a full NDA must include. See 21 U.S.C. § 355(b)(1). The only NDA requirement that is relevant to the instant case is located in subdivision (A): the application must include “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[.]” 21 U.S.C. § 355(b)(1)(A); see also Warner-Lambert Co. v. Shalala, 202 F.3d 326, 327 (D.C. Cir. 2000).

         The Section 505(b)(2) NDA pathway relates to a subset of new drug applications: those that are submitted “for a drug for which the investigations described in [subsection 505(b)(1)(A)] and relied upon by the applicant for approval of the application were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use[.]” 21 U.S.C. § 355(b)(2); see also Ferring Pharm., 2016 WL 1060199, at *2. A Section 505(b)(2) NDA applicant must include certain patent-related certifications “with respect to each patent which claims the drug for which such investigations were conducted or which claims a use for such drug for which the applicant is seeking approval[.]” 21 U.S.C. § 355(b)(2)(A). Thus, so long as the requisite patent certifications are provided, Section 505(b)(2) NDA applicants may discharge their duty to demonstrate the safety and efficacy of the drug for which they seek approval by relying upon investigations they did not conduct or have not licensed (hereinafter “unoriginal” investigations), which can include “clinical studies that were previously submitted to [the] FDA in support of another drug[, ]” Takeda Pharm., 78 F.Supp.3d at 72, or “published literature” that may not have any association with a specific, previously approved drug application (see Draft Guidance for Industry: Applications Covered by Section 505(b)(2), Admin. R. App. (“AR”), ECF Nos. 35-1- 35-6, 001328-29). See also Ferring Pharm., 2016 WL 1060199, at *2; Erika Lietzan, The Myths of Data Exclusivity, 20 Lewis & Clark L. Rev. 91, 97 (2016).

         Once a drug application is submitted to the FDA pursuant to the full NDA or Section 505(b)(2) NDA pathways and the agency approves it, the FDCA’s separate exclusivity provisions-which are set forth and discussed at length infra Part III.A- can apply automatically to prevent the FDA from approving subsequent drug products for a specified number of years. See, e.g., 21 U.S.C. § 355(c)(3)(E)(ii)-(iv) (creating and demarcating five-year and three-year exclusivities). Notably, as explained below, the statutory exclusivity provisions specifically address the circumstances under which an approved new drug is entitled to exclusivity, as well as the circumstances under which subsequent products are to be deemed barred by that exclusivity. Thus, the FDCA itself delineates the scope of an approved drug product’s exclusivity benefit.

         B. The FDA’s Approval Of Otsuka’s Abilify Drug Products

         In 2002, Otsuka submitted, and the FDA approved, a drug application for Abilify Tablets, an orally administered drug for the treatment of several mental disorders, most notably schizophrenia. (FDA Decision Rejecting Otsuka’s Exclusivity Petition (“FDA Decision”), Ex. A to Compl., ECF No. 1-2, at 14-15; Abilify Tablet Original Approval Letter, AR 000373.)[3] The active moiety of Abilify Tablets is the molecule aripiprazole, which is also the drug’s active ingredient. (See FDA Decision at 14-15.)[4] Otsuka supported the drug application for Abilify Tablets with multiple original studies (see, e.g., Abilify Tablet Original Approval Letter, AR 000374-75; Abilify Tablet Original Labeling, id. 000383). Furthermore, because the FDA had never before approved a drug with aripiprazole as its active moiety or ingredient, Abilify Tablets received a five-year period of marketing exclusivity (see FDA Decision at 14). See also 21 U.S.C. § 355(c)(3)(E)(ii) (directing that, once the FDA approves a new drug application for a drug with a never-before-approved active ingredient, no subsequent application that “refers to [that] drug” and that relies on unoriginal investigations under section 505(b)(2) may be submitted (or approved) for five years).

         Otsuka’s five-year exclusivity period for Abilify Tablets has long since come and gone. The events giving rise to the exclusivities in question here took place in February of 2013, when the FDA approved an application for another Otsuka drug- Abilify Maintena-which has aripiprazole as its active moiety and active ingredient, just like Abilify Tablets. (See FDA Decision at 16; Abilify Maintena Approval Letter, AR 000487; Abilify Maintena Exclusivity Summary, id. 000600-01.) Abilify Maintena’s novelty was that it is administered through extended-release injectable suspension rather than orally. (FDA Decision at 16; Abilify Maintena Approval Letter, AR 000487.) Otsuka established the efficacy of Abilify Maintena partly “on the basis of efficacy data from trials with the oral formulation of aripiprazole” (Abilify Maintena Original Labeling, AR 000530), and it also sponsored “new clinical investigations[, ]” 21 U.S.C. § 355(c)(3)(E)(iii), without which the FDA would not have approved the drug for marketing (see Abilify Maintena Exclusivity Summary, AR 000602-05).[5]Significantly for present purposes, the fact that Otsuka relied on new, essential studies when it sought approval for Abilify Maintena (a drug that contained a previously approved active ingredient) meant that Abilify Maintena was indisputably entitled to a three-year period of exclusivity under 21 U.S.C. § 355(c)(3)(E)(iii), which is referred to herein as “romanette iii.”[6] There is no dispute that Abilify Maintena deserved this period of marketing exclusivity. (See Pls.’ Mem. in Supp. of Pls.’ Mot. (“Pls.’ Mem.”), ECF No. 24-1, at 9-10; Defs.’ Mem. in Supp. of Defs.’ Mot. (“Defs.’ Mem.”), ECF No. 26-1, at 16-17; Intervenor-Defs.’ Mem. in Supp. of Alkermes’s Mot. (“Alkermes’s Mem.”), ECF No. 27-1, at 20-21; FDA Decision at 16, 21.)

         Thereafter, on December 5, 2014, the FDA approved an application supplement, which is also known as a “supplemental new drug application, ” for Abilify Maintena. (See Abilify Maintena Supplement Approval Letter, AR 000607-611; FDA Decision at 16 & n.55.) An application supplement is a filing that updates an already approved application in a new way, see 21 C.F.R. § 314.70-e.g., with a different indication for the drug. See AstraZeneca Pharm. LP v. FDA, 713 F.3d 1134, 1136 (D.C. Cir. 2013); ViroPharma, Inc. v. Hamburg, 898 F.Supp.2d 1, 7 (D.D.C. 2012); Lietzan, supra, at 141-42. Pursuant to such a supplement, Otsuka updated its application for Abilify Maintena with “the results of a controlled clinical study treating adult patients with schizophrenia experiencing an acute relapse” (FDA Decision at 16 n.55 (internal quotation marks omitted)). And per what this Memorandum Opinion calls “romanette iv, ” Otsuka’s application supplement received a separate three-year exclusivity period analogous to the one romanette iii provides, see 21 U.S.C. § 355(c)(3)(E)(iv); it is also undisputed that Otsuka’s supplement was entitled to that exclusivity. (See Pls.’ Mem. at 9-10; Defs.’ Mem. at 16-17; Alkermes’s Mem. at 20-21; FDA Decision at 16, 21.)

         C. The FDA’s Approval Of Alkermes’s Aristada (Over Otsuka’s Objection)

         What is at issue in the instant case is the scope of the exclusivities that were conferred to Abilify Maintena and its supplement by statute; the reach of the exclusivity benefit became a point of contention when, late in 2014, Alkermes submitted to the FDA a Section 505(b)(2) NDA for its drug Aristada. Aristada treats schizophrenia, and it is administered through an extended-release injectable suspension formula, like Abilify Maintena. (See Aristada Approval Letter, AR 001217; FDA Decision at 16.) However, Aristada’s chemical structure differs from the Abilify line of drugs. Aristada’s active ingredient is aripiprazole lauroxil-a substance that metabolizes in the body into N-hydroxymethyl aripiprazole, which is Aristada’s active moiety. (See Active Moiety Determination For Aripiprazole Lauroxil, AR 000665-67, 000670; Pls.’ Mem. at 16 n.7 (disclaiming any challenge to the FDA’s determination on these points).) Furthermore, although some of the unoriginal investigations that Alkermes provided to establish the safety and effectiveness of Aristada were studies that Otsuka had sponsored with respect to Abilify Tablets (see FDA Decision at 17 (“The 505(b)(2) NDA for Aristada relied for approval, in part, on the [FDA’s] finding of safety and effectiveness for the listed drug, Abilify (aripiprazole) Tablets[.]”); Memorandum: Division Director Summary Review of Aristada (“Division Director Review”), AR 001177 (same)), Alkermes did not rely on the new clinical investigations that Otsuka had undertaken with respect to Abilify Maintena. Instead, Alkermes conducted and submitted its own original studies to support the Section 505(b)(2) NDA for Aristada. (See FDA Decision at 17; Division Director Review, AR 001177 (observing that the FDA’s “previous finding of safety and efficacy from oral aripiprazole tablets was considered as evidence, ” as well as “pharmacokinetic evidence from [Alkermes’s] studies that demonstrate[d] similar serum concentrations for oral aripiprazole given daily at approved doses and aripiprazole lauroxil given monthly at the studied doses”).)

         1. Otsuka’s Citizen Petition Urging Rejection Of The Aristada

         Application Otsuka objected to Alkermes’s Section 505(b)(2) drug application for Aristada in a citizen petition that it filed with the FDA on July 13, 2015. (See generally Otsuka’s Citizen Petition, AR 000025-44.)[7] Otsuka’s objection related specifically to the FDA’s failure to apply the statutory provisions that confer exclusivity, which are discussed briefly here and at length below. As already mentioned, both romanette iii and iv delineate and describe the new drug applications that are entitled to exclusivity (the industry refers to this language as the “eligibility clause”). (See, e.g., FDA Decision at 11-12 (discussing 21 U.S.C. § 355(c)(3)(E)(iii), (iv)).) In addition, these statutory provisions also identify the particular subset of second-in-time applications that are barred by that exclusivity. (See Id. at 12-13 (calling the language identifying that subset of applications the “bar clause”).) The text and function of the bar clauses in romanettes iii and iv are crucial to the legal issue presented in this case (see infra Part III.A-B); for now, it suffices to note that romanette iii’s bar clause limits the FDA for a period of three years, preventing it from approving a second-in-time Section 505(b)(2) NDA that is “for the conditions of approval of such drug in the approved subsection (b) application[.]” 21 U.S.C. § 355(c)(3)(E)(iii). The bar clause in romanette iv pertains to supplements that have received exclusivity; for a three-year period, the FDA is prohibited from approving a second-in-time Section 505(b)(2) application if that application is “for a change approved in the supplement[.]” 21 U.S.C. § 355(c)(3)(E)(iv). The implementing regulations (also discussed at length below) contain bar clauses that are structured similarly. See 21 C.F.R. § 314.108(b)(4)-(5).

         Otsuka’s citizen petition maintained that the Aristada application fell within the scope of the bar clauses that pertained to Abilify Maintena’s exclusivity periods, and that, thus, Aristada should not be approved. In this regard, Otsuka specifically asserted that Abilify Maintena’s “conditions of approval” were the “treatment of schizophrenia using a once-monthly, long-acting injectable formulation of aripiprazole[, ]” (Otsuka’s Citizen Petition, AR 000033), and that the Aristada application was for Abilify Maintena’s conditions of approval because it treated the same condition in a similar way and had relied on the same sort of clinical trials, despite the fact that Aristada and Abilify Maintena have different active ingredients and active moieties (see Id. 000030, 000038-39.) Accordingly, and based solely on these allegedly overlapping “conditions of approval, ” Otsuka maintained that Abilify Maintena’s romanette iii exclusivity should bar Aristada. (Id. 000039.) Similarly, Otsuka asserted that the “change” spoken of in romanette iv refers to changes in conditions of approval as addressed in a supplement, and thus, Otsuka argued, the exclusivity afforded to Abilify Maintena’s supplement per romanette iv should have also precluded Aristada’s approval because Aristada purports to treat schizophrenia in the way described in the supplement. (Id. 000034, 000036-37.)

         2. The FDA’s Response To Otsuka’s Citizen Petition

         The FDA disagreed that Aristada was barred. In a detailed letter decision issued on October 5, 2015, the FDA explained that, in its view, the FDCA’s exclusivity provisions do not bar a second-in-time drug application if the drug with exclusivity and the drug for which approval is being sought have different active moieties. (See FDA Decision at 12 (explaining that the “FDA interprets [the statute] to mean that, for a single entity drug to be potentially barred by 3-year exclusivity for another single entity drug, the drug must contain the same active moiety as the drug with 3-year exclusivity”).) The FDA explained that it interprets the phrase “for the conditions of approval of such drug in the approved subsection (b) application” in romanette iii, 21 U.S.C. § 355(c)(3)(E)(iii) (emphasis added), to mean that the FDA may not approve “a 505(b)(2) NDA for ‘such drug’ (i.e., a drug containing the active moiety [of the drug with exclusivity]) for those same conditions of approval for 3 years after the approval” of the drug with exclusivity. (FDA Decision at 21). Thus, as the FDA reads the statute, “such drug” directs the agency to consider certain defining characteristics of the drug with exclusivity as compared to the drug in the second-in-time application (including the relative active moieties of these drugs), and that only a second-in-time application that relates to a drug with both the same active moiety (“such drug”) and the same conditions of approval as the drug with exclusivity will be blocked. (See, e.g., id. at 21-22 (explaining that “any approval of Aristada will not be an approval of ‘such drug’ (a drug containing the active moiety aripiprazole) and therefore will not be for the ‘conditions of approval of such drug’” in the Abilify Maintena application); see also Id. at 21 (“[B]ecause the scope of the 3-year exclusivities for Abilify Maintena, like the scope of any 3-year exclusivity, is tied to the active moiety of Abilify Maintena and because Aristada contains a different active moiety than Abilify Maintena, FDA concludes that approval of the Aristada NDA is not blocked.”).)

         The FDA’s response letter applied similar logic to the exclusivity that pertains to supplements under romanette iv. According to the letter, the FDA does not permit active-moiety changes through supplemental new drug applications; thus, “a change approved in a supplement must [necessarily] be a change in conditions of approval for the same drug (active moiety) approved in the original NDA.” (Id. at 13; see also Letter from Janet Woodcock, M.D., Director, CDER, FDA to William H. Carson, Otsuka and Ralph S. Tyler, Venable LLP, AR 000353 & n.43; Guidance for Industry- Submitting Separate Marketing Applications and Clinical Data for Purposes of Assessing User Fees, id. 001593; Otsuka’s Citizen Petition, id. 000034 (agreeing that the “change referred to in [romanette iv] is simply a change in the conditions of approval” (internal quotation marks and footnote omitted).) As a result, the FDA concluded that a second-in-time application is only barred as being for “a change approved in [a] supplement” if the second-in-time application pertains to a drug that has the same active moiety as the drug that was the subject of the approved supplemental application. (FDA Decision at 13.) And based on the undisputed fact that Abilify Maintena and Aristada do not have the same active moiety, the FDA concluded that the Abilify Maintena supplement’s exclusivity period did not bar the approval of a second-in-time application for Alkermes’s Aristada. (See Id. at 21.)

         D. Procedural History

         On October 15, 2015, Otsuka filed a complaint against the FDA in this Court, claiming that the agency’s decision to approve Aristada violates the APA in three ways. First, Otsuka argues that the FDA “severely misconstrued the three-year exclusivity provisions” of the FDCA (Compl. ¶ 55), and thereby reached a conclusion with respect to the scope of Abilify Maintena’s exclusivities that was arbitrary and capricious and “directly contrary to law” (id. ¶ 59). Second and similarly, Otsuka asserts that the FDA’s decision arbitrarily and capriciously contradicted the agency’s implementing regulations. (See Id. ¶¶ 60-64.) Third and finally, Otsuka maintains that the FDA’s decision to approve Aristada required notice and comment, because the agency effectively “amended” the terms of its exclusivity-related regulations by creating an inconsistent rule of future applicability. (See Id. ¶¶ 65-74.)

         This Court permitted Alkermes to intervene in the litigation on October 26, 2015 (see Order, ECF No. 11), after which Otsuka moved for summary judgment (see Pls.’ Mot.; Pls.’ Mem.). The FDA filed a brief in opposition and simultaneously moved for summary judgment in its favor. (See Defs.’ Mot.; Defs.’ Mem.) And, thereafter, Alkermes filed its own motion for summary judgment, agreeing with the FDA’s position. (See Alkermes’s Mot.; Alkermes’s Mem.) This Court held a hearing regarding these motions on January 7, 2016, and took each of the cross-motions for summary judgment under advisement.[8]

         II. LEGAL STANDARDS

         Although Federal Rule of Civil Procedure 56 provides the ordinary summary judgment standard, it is well established that, in cases “involving review of a final agency action[, ] . . . the standard set forth in [Rule 56] does not apply because of the limited role of a court in reviewing the administrative record.” ViroPharma, Inc. v. Hamburg, 916 F.Supp.2d 76, 79 (D.D.C. 2013) (internal quotation marks omitted) (quoting Sierra Club v. Mainella, 459 F.Supp.2d 76, 89 (D.D.C. 2006)). The Court’s function in administrative-law cases is solely “to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.” Id. (internal quotation marks and citation omitted). Moreover, as applicable here, the APA permits the Court to set aside agency action “only if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Zevallos v. Obama, 793 F.3d 106, 112 (D.C. Cir. 2015) (internal quotation marks and citations omitted); see also 5 U.S.C. § 706(2)(A).

         It is routine in this jurisdiction to analyze APA claims that arise out of the FDA’s letter-decision interpretations of the FDCA under the familiar two-step framework of Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), which applies to “an agency’s interpretation of a statute that it administers[, ]” W. Minn. Mun. Power Agency. v. FERC, 806 F.3d 588, 591 (D.C. Cir. 2015). See AstraZeneca Pharm., 713 F.3d at 1139 (applying Chevron to an FDA statutory interpretation contained in a letter decision); Mylan Labs., Inc. v. Thompson, 389 F.3d 1272, 1279-80 (D.C. Cir. 2004) (same, collecting cases). Step One directs that, if “Congress has directly spoken to the precise question at issue, ” the court must give effect to that “unambiguously expressed intent, ” Nat’l Treasury Emps. Union v. Fed. Labor Relations Auth., 414 F.3d 50, 57 (D.C. Cir. 2005) (internal quotation marks omitted) (quoting Chevron, 467 U.S. at 842-43), and the question is not whether the pertinent statutory terms are “in some abstract sense, ambiguous, but rather whether, read in context and using the traditional tools of statutory construction, ” the terms unambiguously mean what the party claiming victory at Step One says they mean. Cal. Indep. Sys. Operator Corp. v. FERC, 372 F.3d 395, 400 (D.C. Cir. 2004) (citation omitted); see also Sierra Club v. EPA, 551 F.3d 1019, 1027 (D.C. Cir. 2008) (explaining that the tools used to evaluate statutory provisions include an examination of the provision in its full context and, as appropriate, references to legislative history).

         If the statute at issue “can be read more than one way” and thus is ambiguous, AFL-CIO v. FEC, 333 F.3d 168, 173 (D.C. Cir. 2003) (citation omitted), or if the statute is “silent” regarding the relevant question, see Van Hollen, Jr. v. FEC, 811 F.3d 486, 495 (D.C. Cir. 2016), then the Court proceeds to Step Two. At Step Two, the statutory ambiguity or silence is effectively deemed “‘an implicit delegation from Congress to the agency to fill in the statutory gaps.’” Id. at 495 (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 159 (2000) (emphasis omitted)). Consequently, the court must “accept the agency’s [reasonable] construction of the statute, even if the agency’s reading differs from what the court believes is the best statutory interpretation[, ]” Nat’l Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005) (citation omitted). This reflects the principle that the agency is “the authoritative interpreter (within the limits of reason)” of “an ambiguous statute [it] is charged with administering[.]” Id. at 983. Moreover, the nature of judicial review at Step Two is “highly deferential[, ]” Vill. of Barrington, Ill. v. Surface Transp. Bd., 636 F.3d 650, 667 (D.C. Cir. 2011) (internal quotation marks and citation omitted), which means that plaintiffs bear an “arduous[]” burden at this stage, Am. Meat Inst. v. USDA, 968 F.Supp.2d 38, 59 (D.D.C. 2013), aff’d, 746 F.3d 1065 (D.C. Cir. 2014), aff’d after reh’g en banc, 760 F.3d 18 (D.C. Cir. 2014).

         The deference framework that the Supreme Court recognized in Auer v. Robbins, 519 U.S. 452 (1997), is also potentially applicable in the instant case, because Otsuka contends that the FDA’s approval of Aristada not only contradicts the mandates of the FDCA but also transgresses the boundaries of the agency’s own regulations. Under Auer, when an agency interprets “its own ambiguous regulation[s], ” courts will defer to that interpretation unless it is “plainly erroneous or inconsistent with the regulation[s][, ]” or there “is reason to suspect that the agency’s interpretation does not reflect the agency’s fair and considered judgment on the matter in question.” Christopher, 132 S.Ct. at 2166 (internal quotation marks and citations omitted). Thus, “an agency’s interpretation need not be the only possible reading of a regulation-or even the best one-to prevail.” Decker v. Nw. Environ. Def. Ctr., 133 S.Ct. 1326, 1337 (2013). And courts have generally concluded that the Auer standard provides for “an even greater degree of deference” to the agency than the standard that Chevron establishes. Conservation Force v. Salazar, 919 F.Supp.2d 85, 91 (D.D.C. 2013) (internal quotation marks omitted) (quoting Consarc Corp. v. U.S. Treasury Dep’t, Office of Foreign Assets Control, 71 F.3d 909, 915 (D.C. Cir. 1995)). Be that as it may, the clear corollary of the Auer rule is that deference to the agency’s interpretation of its own regulations is not required if the meaning of the regulation is plain. See, e.g., Christensen v. Harris Cty., 529 U.S. 576, 588 (2000) (declining to apply Auer deference where the regulation was unambiguous).

         Finally, with respect to Otsuka’s claim that the FDA violated the APA when it failed to employ notice-and-comment procedures, no special deference standard applies. Instead, whether an agency action necessitates the notice-and-comment process is a legal question that is subject to de novo review. See Mendoza v. Perez, 754 F.3d 1002, 1020 (D.C. Cir. 2014); Nat’l Min. Ass’n v. Jackson, 768 F.Supp.2d 34, 46 (D.D.C. 2011) (citing Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 215 (D.C. Cir. 2007)). As a general matter, the agency is permitted to forgo notice-and-comment procedures if its act qualifies as an adjudication (formal or informal), see Blanca Tel. Co. v. FCC, 743 F.3d 860, 867 (D.C. Cir. 2014); Int’l Internship Program v. Napolitano, 718 F.3d 986, 988 (D.C. Cir. 2013)), or if it issues an “interpretative rule” under 5 U.S.C. § 553(b)(A), see Perez v. Mortg. Bankers Ass’n, ...


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