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Amneal Pharmaceuticals LLC v. Food and Drug Administration

United States District Court, District of Columbia

January 23, 2018

AMNEAL PHARMACEUTICALS LLC, Plaintiff,
v.
FOOD AND DRUG ADMINISTRATION, et al, Defendants, and LUPIN PHARMACEUTICALS, INC., et al, Intervenor-Defendants.

          MEMORANDUM OPINION

          RANDOLPH D. MOSS UNITED STATES DISTRICT JUDGE.

         The Federal Food, Drag, and Cosmetic Act ("FDCA"), as amended by the Drag Price Competition and Patent Restoration Act of 1984 ("Hatch-Waxman Act") and the Medicare Prescription Drag Improvement and Modernization Act of 2003 ("Medicare Modernization Act"), grants 180 days of market exclusivity to the first generic manufacturer to file an abbreviated new drag application ("ANDA") that challenges a patent covering the brand-name version of the drag. But that right is not absolute and is subject to various statutorily defined "forfeiture events." As relevant here, an applicant who fails "to obtain tentative approval of [its AND A] within 30 months after the date on which the [AND A] is filed" forfeits its right to the 180 days of market exclusivity, "unless th[at] 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." 21 U.S.C. § 355G)(5)(D)(i)(IV).

         The plaintiff in this case, Amneal Pharmaceuticals LLC ("Amneal"), was the first manufacturer to file an ANDA to market a generic version of Namenda XR (memantine hydrochloride extended release capsules), and its ANDA challenged a patent held by the manufacturer of the brand-name version of the drug. Amneal did not, however, obtain tentative approval for its ANDA within the 30-month window. As a result, Amneal's eligibility for the 180 days of generic market exclusivity turns on whether its failure to obtain timely approval was "caused by a change in or a review of the requirements for approval of the" ANDA. In proceedings before the Food and Drug Administration ("FDA"), Amneal argued (1) that the delay was caused by the FDA's demand for data from a commercial-scale batch of the drug and (2) that this demand constituted a change in a requirement for approval of the ANDA. The FDA disagreed on both counts. Amneal, in response, brought the present action pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq., challenging the FDA's decision.

         The case is now before the Court on Amneal's motions for summary judgment, Dkt. 25, and for a preliminary injunction or, in the alternative, a temporary restraining order, Dkt. 62, and the cross-motions for summary judgment filed by the FDA, Dkt. 34, and intervenor-defendant Lupin Pharmaceuticals ("Lupin"), Dkt. 30. Although Amneal raises a host of other issues, the heart of the dispute is whether the FDA's request that Amneal supplement its ANDA with data from a commercial-scale batch, as opposed to data from the pilot-scale batches that Amneal originally submitted, constituted a "change in . . . the requirements for approval of Amneal's ANDA-or, more precisely, whether the FDA's decision that the request did not was contrary to law or otherwise unreasonable. As explained below, the Court concludes that the FDA acted within its authority and reasonably in rejecting Amneal's claim to market exclusivity. The Court will, accordingly, deny Amneal's motion for summary judgment, Dkt. 25, and will grant the FDA's and Lupin's cross-motions for summary judgment, Dkt. 30; Dkt. 34. Moreover, having resolved the case on the merits, the Court will deny Amneal's motion for a preliminary injunction or, the alternative, a temporary restraining order, Dkt. 62, as moot.

         I. BACKGROUND

         A. Statutory and Regulatory Background

         To obtain approval to market a new drug, the innovator-manufacturer must submit a new drug application ("NDA") to the FDA that contains extensive information and data, including "full reports of investigations which have been made to show" that the new drug is safe and effective, "a full statement of the composition" of the new drug, "a full description of the methods used in, and the facilities and controls used for, the manufacture, processing, and packaging" of the new drug, and proposed labeling for the new drug. 21 U.S.C. § 355(b)(1). In addition, the NDA must include "the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the [NDA] or which claims a method of using [the new] drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug." Id. The FDA then lists this patent information in the "Orange Book: Approved Drug Products with Therapeutic Equivalence Evaluations" or, as it is commonly known, simply the "Orange Book."[1] See also Mylan Labs. Ltd. v. FDA, 910 F.Supp.2d 299, 301 (D.D.C. 2012).

         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 Act." The Act sought, among other things, to encourage the development of generic drugs to increase market competition and to lower prices for consumers. See Mead Johnson Pharm. Grp., Mead Johnson & Co. v. Bowen, 838 F.2d 1332, 1333 (D.C. Cir. 1988). To that end, the Hatch-Waxman Act streamlined the process for bringing new generic drugs to market by creating the abbreviated new drug application-or "ANDA"-process, under which a manufacturer can "piggyback[] on the original manufacturer's evidence of safety and efficacy." Teva Pharm., USA, Inc. v. Leavitt, 548 F.3d 103, 104 (D.C. Cir. 2008). To obtain FDA approval for a generic drug, the AND A ate (1) that it is "bioequivalent" to the brand-name drug (also referred to as the "listed drug"); (2) that the prescribed conditions of use have been approved for the listed drug, 21 U.S.C § 355(j)(2)(A); (3) that the generic drug satisfies certain chemistry and labeling requirements; (4) and that the proposed manufacturing and packaging processes and controls are adequate to "preserve its identity, strength, quality, and purity, " id. § 355(j)(4)(A).

         Although the Hatch-Waxman Act streamlined the process for bringing generic drugs to market, obtaining FDA approval for an ANDA remains a prolonged task. The process begins with the submission of an application, which must comply with FDA requirements for receipt. If an application is not "substantially complete, " 21 C.F.R. § 314.101(b)(1), the FDA will issue a "refuse-to-receive decision" in which it rejects the ANDA without evaluating the substance of the application, id. § 314.101(b)(3). In response, an applicant may resubmit the ANDA with the required data or may withdraw the ANDA. Id. Only after the FDA has determined that the ANDA meets the receipt requirements does the agency begin to evaluate whether the applicant's product is bioequivalent, manufactured in an appropriate manner, and properly labeled. During this substantive review, there is "inevitably and invariably back and forth" between the agency and the applicant, see Dkt. 69 at 8 (Tr. 8:7), in which the agency generally requests additional data or information to determine whether the AND A meets the requirements for approval, see 21 C.F.R. § 314.127. This process can take years to complete.

         An ANDA must also include one of four certifications with respect to each of the Orange Book patents that claims the listed drug. 21 U.S.C. § 355(j)(2)(A)(vii)(I)-(IV). The four certifications are identified by the paragraph in which they appear: A "paragraph I" certification attests that, to the best of the applicant's knowledge, no such patent information has been filed. Id. § 355(j)(2)(A)(vii)(I). A "paragraph II" certification attests that any such patent has expired. Id. § 355(j)(2)(A)(vii)(II). A "paragraph III" certification identifies the date on which any such patent will expire. Id. § 355(j)(2)(A)(vii)(III). And, most importantly for present purposes, a "paragraph IV" certification asserts that any such patent is invalid or will not be infringed by the generic drug. Id. § 355(j)(2)(A)(vii)(IV). "If an ANDA applicant makes one of the first two certifications, [the] FDA may approve the ANDA immediately, " and, if the "applicant makes a paragraph III certification, [the] FDA may grant tentative approval of the ANDA, to be made effective on the date the patent expires." Mylan Labs., 910 F.Supp.2d at 301. The consequences of making a paragraph IV certification, however, are different in kind. Most significantly, a paragraph IV certification is treated as an act of patent infringement. 35 U.S.C. § 271(e)(2)(A). If the patent holder brings an infringement action within 45 days of receiving notice of the certification, moreover, the FDA's approval of the ANDA will not take effect for a period of 30 months, unless otherwise ordered by the district court in which the patent litigation is pending. Id. § 355(j)(5)(B)(iii).

         Would-be generic drug manufacturers thus risk costly patent infringement litigation if they seek FDA approval before the brand-name drug's patent has expired or is invalidated-a risk that Congress feared would discourage market competition and delay bringing lower-priced generic drags to market. See leva Pharm. USA, Inc. v. Sebelius, 595 F.3d 1303, 1305 (D.C. Cir. 2010). To "compensate [generic] manufacturers for research and development costs as well as the risk of litigation from patent holders, " Teva Pharm., 548 F.3d at 104, Congress enacted an incentive for generic drag manufacturers to submit AND As and, if necessary, to engage in patent litigation: the "first applicant" to file an ANDA containing a paragraph IV certification is eligible for 180 days of market exclusivity, "during which the FDA may not approve for sale any competing generic version of the drug at issue." Teva Pharm., 595 F.3d at 1305; see also 21 U.S.C. 355O')(5)(B)(iv); Mylan Labs., 910 F.Supp.2d at 302.

         The first-filer's entitlement to the exclusivity period is not absolute, however, and may be forfeited under certain conditions. As relevant here, the exclusivity period is forfeited if the "first applicant fails to obtain tentative approval of [its ANDA] within 30 months after the date on which the [ANDA] is filed." 21 U.S.C. § 355(j)(5)(D)(i)(rV). Congress added this forfeiture rule to the statute as part of the Medicare Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066 (2003), to "ensure that the 180-day exclusivity period enjoyed by the first generic to challenge a patent [could not] be used as a bottleneck to prevent additional generic competition." Hi-Tech Pharmacol Co. v. U.S. Food & Drug Admin., 587 F.Supp.2d 1, 4 (D.D.C. 2008) (quoting 149 Cong. Rec. SI5746 (daily ed. Nov. 24, 2003) (statement of Sen. Schumer)).

         Congress created one exception to the 30-month forfeiture rale: the 180-day market exclusivity is not forfeited if the applicant's failure to obtain tentative approval within 30 months was "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." 21 U.S.C. § 355(j)(5)(D)(i)(IV). This exception was included to ensure that ANDA applicants are not penalized "for delays in tentative approval caused by changes in approval requirements beyond [the] ANDA applicant's control." Mylan, 910 F.Supp.2d at 311. If an applicant fails to obtain tentative approval within 30 months and the failure is not excused under the exception, however, the FDA may approve other AND As for the same generic drug product. See Id.

         B. Factual Background

         On June 10, 2013, Amneal submitted an AND A seeking approval to market a generic version of Namenda XR-a medication intended to treat moderate to severe dementia of the Alzheimer's type. AR 153, 160.[2] Namenda XR is a memantine hydrochloride capsule designed to facilitate an "extended release" of the drug. AR 1059. The FDA had previously approved an NDA submitted by Forest Laboratories LLC ("Forest") to market Namenda XR in four dosage levels: 7 mg, 14 mg, 21 mg, and 28 mg. AR 160. Amneal's ANDA included all four dosage levels; it was the first filed; and it included a paragraph IV certification for at least one of the patents listed in the Orange Book. AR 1041, 1043-44.

         Amneal's ANDA proposed to achieve Namenda XR's extended-release effect by manufacturing capsules containing tiny "beads" of the active ingredient that would dissolve into the body at different rates. AR 182. Unlike the brand-name version of Namenda XR, which includes a single type of bead, Dkt. 33 at 13 & n.5, each capsule of Amneal's proposed product would contain both immediate release beads ("IRs") and extended release beads ("ERs") __, AR 185. Consistent with the FDA's Guidance on ANDA Submissions-Refuse-to-Receive Standards, AR 240, 252, Amneal submitted data from three "pilot batches" of 150, 000 capsules for each of the four dosage strengths in its ANDA, AR 198- 99. These pilot batches produced the capsules by combining __ to create the extended release effect. AR 437. For purposes of commercial sales, however, Amneal proposed to produce much larger batches of 1, 000, 000 capsules and, in doing so, to blend up to six different lots of ER beads with two different lots of IR beads. AR 199, 437.

         On November 5, 2013, the FDA sent Amneal a letter refusing to receive Amneal's AND A because it was "not sufficiently complete to merit a critical technical review." AR 63. Specifically, the FDA explained that Amneal had "failed to produce accelerated stability data which encompasses at least 84 days in the accelerated stability chamber for the 30 and 500 counts for all strengths." Id. Amneal responded a month later by clarifying that the required data had, in fact, been included-it only appeared insufficient because a "typographical error" indicated the wrong date on which the stability testing began. AR 67. After confirming that the date in the ANDA was indeed a typographical error, the FDA rescinded its "Refuse to Receive" letter and treated the date of Amneal's original submission as the date of the application. AR 109. Although the record does not reflect when other generic manufacturers filed their AND As, there is no dispute that, using Amneal's original date of submission, Amneal qualified as the "first applicant" to submit an ANDA for Namenda XR containing a paragraph IV certification, making it eligible for 180 days of generic exclusivity if approved within 30 months, i.e., by December 10, 2015. AR 1016.

         On September 10, 2014, the FDA sent Amneal a letter identifying a number of substantive deficiencies with Amneal's ANDA. See AR 230-39. As relevant here, the FDA wrote:

         The proposed combination of multiple ER and IR lots for commercial production, combined with the deficiencies observed in the information submitted for the exhibit lots, requires the review of the resulting data from the manufacture of a commercial size lot before application approval. In this regard, please submit all the required [chemistry, manufacturing, and controls] information for the production of a 7 mg and 28 mg Memantine HC1 lot of the size intended for commercial distribution.

         AR 233. As the FDA further explained in its chemistry review, this deficiency was based on several factors. In particular: (1) Amneal's product required a specific ratio of IR beads to ER beads in each capsule __ to ensure the desired rate of release, AR 189, 222-23; (2) the pilot batches used in the AND A involved mixing __of IR beads, while Amneal proposed to market a product produced in commercial batches made by mixing "six different ER batches with two IR lots, " AR 199; (3) Amneal's pilot batches had deficiencies such as overfilled capsules, AR 224; and (4) the "in-process controls" that Amneal proposed to use for the commercial manufacture of the drug were "regular controls used for simpler encapsulated drugs[, ] which [might] not be sufficient to .. . monitor the quality of a product made by combining "different types of... beads, " AR 203. Overall, the FDA reviewers concluded that, "[d]ue to the complexity of the proposed process, combined with the deficiencies noted in the review, " and because "mixing multiple lots of ER and IR beads could induce additional deviations not observed during the manufacture of the [pilot] lots that may require additional control, " Amneal "should submit a scale up batch before approval." AR 199; see also AR 233 (requesting that Amneal "please submit all the required . . . information for" commercial lot sizes).

         Complying with the FDA's request required considerable time and effort on Amneal's part. Amneal needed to "acquire commercial-scale quantities of source materials, ramp up production to manufacture commercial-size lots, conduct comprehensive analytical testing on the finished product, evaluate the resulting data, and resubmit its AND A"-a process that took eight months to complete. AR 654. But, upon review of the additional data, the FDA noted several issues. Most problematically, Amneal's proposed IR-to-ER bead ratio "was not followed in the newly submitted batches" and, while "some latitude in this ratio [was] required[, ] ... the deviation . .. was not justified." AR 460.

         Amneal submitted a lengthy response to the FDA's review, which, among other things, highlighted the differences in processes used in producing the pilot-scale and commercial-scale batches. AR 437-44. As Amneal explained, "[i]n the ANDA exhibit batches, __were used to manufacture the intermediate blend; whereas for manufacturing of future commercial scale batches, multiple batches of IR pellets and ER pellets will be used." AR 437. Acknowledging that combining multiple lots of IR and ER beads introduced additional "complexity" into the production process, which "may result in calculation errors, " Amneal proposed an "additional control... to ensure [that the] accurate dose of the drug product is administered to the patients." AR 444. The FDA, however, concluded that the additional control was "not acceptable, " and it, accordingly, "recommend[ed]" that Amneal "scale down the proposed commercial batch size[] to a size with a constant, reproducible capsule filling weight as well as a constant bead type composition." AR 483. Amneal accepted the FDA's recommendation to scale down the proposed commercial-scale batches-from 1, 000, 000 capsules to 150, 000 capsules-thus resolving the issue and clearing the way for approval of its ANDA. AR 488-89.

         In the meantime, however, Amneal experienced a further delay: an "Import Alert" was issued on October 15, 2015, to the supplier of Amneal's active pharmaceutical ingredient ("API"). AR 486, 490, 527. As the FDA has explained, an Import Alert signals that an "imported product will be detained because it appears to be in violation of the FDCA or its implementing regulations." Dkt. 34 at 16 n.10. In light of this development, Amneal sought approval to use a different API supplier, AR 486, 490, 527, and sought to amend its ANDA to substitute the new supplier in place of the one that was previously identified, AR 495. Amneal's troubles continued, however, and, on December 7, 2015, the FDA notified Amneal that its proposal to change its source of API was "not acceptable" because Amneal had yet to demonstrate bioequivalence. AR 740. Amneal provided the missing data demonstrating bioequivalence using the new source of API on February 25, 2016, but FDA chemistry reviewers raised additional deficiencies in Amneal's product, which were not addressed until August 11, 2016 and September 15, 2016. AR 1037. Finally, on September 28, 2016, the FDA tentatively approved Amneal's ANDA. Id. By that time, however, the 30-month period for approval had run.

         C. FDA's Determination

         On December 2, 2015, Amneal requested that the FDA "confirm ... that Amneal's Memantine XR ANDA will remain eligible for 180-day generic marketing exclusivity regardless of whether the [a]gency grants tentative approval... or final approval to that ANDA on or before December 10, 2015." AR 640. In support of that request, Amneal raised a variety of arguments, but only one is relevant for present purposes. That argument posited, as Amneal argues in this proceeding, that its failure to obtain approval within 30 months of June 10, 2013- the date that the FDA treated as the date of filing-was caused by the FDA's "post-filing review of and change in the requirements for approval." AR 651. Amneal asserted that, prior to the date on which it filed its ANDA, the FDA "long . .. permitted applicants to submit AND As ... based on the production of, and presentation of date regarding, pilot-size test batches." Id. It was only after the ANDA was filed, Amneal argued, that the FDA changed "the pertinent approval requirements" and required "that [it] scale up and complete 'the production of a 7 mg and 28 mg Memantine HC1 lot of the size intended for commercial distribution' and then 'submit all the required ... information' in order to enable FDA 'review of the resulting data from the manufacture of a commercial size lot before application approval.'" Id. (emphasis omitted). Finally, Amneal asserted that it was unaware "of any other ANDA for which the [a]gency ha[d] ever required the production and analysis of. .. data from a commercial-size lot as a condition of approval, " and, indeed, despite having obtained 95 ANDA approvals, it had "never previously been required to produce" such data in support of an ANDA. AR 652 (emphasis omitted).

         On September 28, 2016, the same day the FDA tentatively approved Amneal's ANDA, the agency issued a 17-page letter decision concluding that Amneal had forfeited the 180-day period of exclusivity. AR 1041-57. In that letter, the FDA explained that its request that Amneal provide commercial-scale data was not a "change" in "requirements for approval" that would trigger the exception. AR 1055. The "approval requirement" at issue was not, according to the FDA, the submission of commercial-scale data; rather, the relevant requirement was that the applicant "demonstrate that the methods used in, or the facilities and controls used for, the manufacture, processing, and packing of the drug are adequate to assure and preserve its identity, strength, quality, and purity." Id. The FDA wrote: "That statutory requirement has not changed, nor has [the] FDA's specific requirements for certain complex products like Amneal's proposed memantine hydrochloride ER capsules to meet it." Id.

         The FDA's letter decision further explained that its request for commercial-scale data was nothing new. To the contrary, although limited in its ability to disclose proprietary information regarding other applications, AR 1055 n.43, the FDA represented that it has, "[s]ince at least 2010, " requested commercial-scale data for "certain complex drug products and/or a complex manufacturing process." AR 1055. The decision whether that information is "necessary, " however, is case-specific "and is made during the substantive review of the ANDA by the chemistry reviewers." Id. "Merely having a complex process, " the FDA continued, "is not, by itself, typically sufficient to warrant a request for the manufacture of commercial batches pre-approval, " but:

[I]f the applicant does not demonstrate a good understanding of its product and manufacturing process and have appropriate in-process controls, [the] FDA will have concerns about the ability of the applicant to successfully produce scaled-up commercial lots of the drug product upon approval. In that situation, [the] FDA typically would request that an applicant manufacture a commercial scale batch and submit information on that batch to the Agency for review prior to approving the ANDA. If, as is the case here, the applicant then revises its proposed commercial, batch size to match the size of its exhibit batches, this would address the [a]gency's concern, as the applicant would no longer be seeking to produce a scaled-up commercial batch.

Id. Accordingly, the FDA reasoned, because neither statutory requirements nor agency policy had changed, the exception to the 30-month rule did not apply. AR 1056.

         As an alternative basis for its decision, the FDA also concluded that the FDA's request for data from a commercial-scale batch, even if a change in a requirement for approval, did not cause Amneal to miss the 30-month mark. AR 1054-55. It premised that conclusion on two points: First, the FDA's request for commercial scale data was resolved before the forfeiture date and, therefore, could not have "preclude[d] tentative approval or approval at that time." AR 1055. Second, Amneal did not "demonstrate[] that the [FDA's] request" that Amneal provide the commercial-scale data "caused it to fail to obtain tentative approval or approval by [the relevant date]." Id.

         D. ...


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