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Teva Pharmaceuticals USA, Inc. v. Azar

United States District Court, District of Columbia

February 26, 2019

TEVA PHARMACEUTICALS USA, INC., Plaintiff,
v.
ALEX M. AZAR, II, et al., Defendants.

          MEMORANDUM OPINION

          RANDOLPH D. MOSS UNITED STATES DISTRICT JUDGE

         Plaintiff Teva Pharmaceuticals USA, Inc. (“Teva”) brings this action to obtain “immediate injunctive and declaratory relief” barring the Food and Drug Administration (“FDA”) from “depriving [Teva] of its statutory right to 180 days of marketing exclusivity for its generic version of the brand-name drug Restasis®.” Dkt. 1 at 2 (Compl. ¶ 1). Teva seeks a preliminary injunction. Dkt. 2. The FDA and intervenor defendants-Mylan Pharmaceuticals Inc. (“Mylan”), Deva Holding AS (“Deva”), and Famy Care Private Limited (“Famy Care”)- oppose that motion and move to dismiss the case for lack of subject matter jurisdiction. Dkt. 25; Dkt. 27. Because Teva has failed to demonstrate that it has standing, the Court will DENY Teva's motion for a preliminary injunction and will GRANT the defendants' motions to dismiss for lack of standing.

         I. BACKGROUND

         A. Statutory and Regulatory Background

          The Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq., sets forth the procedures that manufacturers must follow to obtain FDA approval to sell pharmaceutical products. To obtain approval for a brand-name or pioneer drug, a pharmaceutical manufacturer must file a New Drug Application (“NDA”) demonstrating the drug's safety and efficacy using scientific data. Id. §§ 355(a)-(b). The NDA must also include “the patent number and the expiration date of any patent . . . 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. § 355(b)(1). If the patent is issued after the NDA is filed, the applicant or holder of the approved NDA must notify the FDA of the patent number and expiration date. Id. § 355(c)(2). 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.'” Amneal Pharms. LLC v. FDA, 285 F.Supp.3d 328, 332 (D.D.C. 2018).

         Prior to 1984, companies that manufactured generic medicines, like Teva, also had to file NDAs supported by full investigative studies. See Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1316 (D.C. Cir. 1998) (recognizing that “the NDA process, ” which is “costly and time-consuming, ” impedes the “availab[ility] of low cost generic drugs”). In 1984, however, 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.” Among other things, the Amendments were designed “to increase competition in the drug industry by facilitating the approval of generic copies of drugs.” Mead Johnson Pharm. Grp. v. Bowen, 838 F.2d 1332, 1333 (D.C. Cir. 1988). To that end, the Amendments eliminated the requirement that generic manufacturers submit full NDAs and allowed generic manufacturers to “seek FDA approval by submitting an abbreviated new drug application (‘ANDA').” Serono Labs., Inc., 158 F.3d at 1316; see also 21 U.S.C. § 355(j). Under the ANDA process, a manufacturer may “piggyback[] on the original manufacturer's evidence of safety and efficacy, ” Teva Pharms. USA, Inc. v. Leavitt, 548 F.3d 103, 104 (D.C. Cir. 2008), and need demonstrate only that the generic drug has the same active ingredient(s), route of administration, dosage form, conditions of use, and strength as the approved drug, and that the generic drug has an appropriate label and is bioequivalent to the approved drug. See 21 U.S.C. § 355(j)(2)(A); id. § 355(j)(4). Although far less demanding than the full NDA process, “obtaining FDA approval for an ANDA remains a prolonged” and demanding “task, ” which “can take years to complete.” Amneal Pharms. LLC, 285 F.Supp.3d at 333.

         An ANDA must also contain one of four certifications “with respect to each” of the Orange Book patents claimed by the brand-name drug. 21 U.S.C. § 355(j)(2)(A)(vii). The four certifications are as follows:

(I) that such patent information has not been filed [a “Paragraph I certification”],
(II) that such patent has expired [a “Paragraph II certification”],
(III) of the date on which such patent will expire [a “Paragraph III certification”], or
(IV) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted [a “Paragraph IV certification”].

Id. A generic applicant may not enter the market until every patent in the Orange Book implicated by the generic product has expired, unless it files a Paragraph IV certification. See Mylan Pharms., Inc. v. FDA, 789 F.Supp.2d 1, 3 (D.D.C. 2011) [hereinafter “Mylan”].

         When a generic applicant submits a Paragraph IV certification in its original ANDA, the applicant must provide notice to the patent owner and holder of the approved NDA “not later than 20 days after the date” on which the FDA “informs the [ANDA] applicant that the [ANDA] has been filed.” 21 U.S.C. § 355(j)(2)(B)(ii)(I). The FDA issues an acknowledgement letter informing an applicant that its ANDA has been “received” after it reviews the ANDA and concludes that the application is sufficiently complete to permit substantive review. 21 C.F.R. § 314.101(b)(2); see also SB Pharmco P.R., Inc. v. Mutual Pharm. Co., 552 F.Supp.2d 500, 507 (E.D. Pa. 2008). When an applicant submits a Paragraph IV certification through “an amendment or supplement to the” applicant's ANDA, the applicant must notify the patent owner and holder of the NDA “at the time at which the [ANDA] applicant submits the amendment or supplement” to the FDA. 21 U.S.C. § 355(j)(2)(B)(ii)(II).

         The filing of an ANDA containing a Paragraph IV certification is treated as an act of patent infringement. 35 U.S.C. § 271(e)(2)(A); see also Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 677-78 (1990). If the patent owner fails to sue for infringement within forty-five days of receiving notice, the generic applicant may bring a declaratory judgment action against the patent owner. 21 U.S.C. § 355(j)(5)(C)(i)(I)(aa). If, however, the patent owner brings an infringement action, the FDA's approval of the ANDA “shall be made effective upon the expiration of the thirty-month period beginning on the date of the receipt of” the required notice to the patent owner and holder of the NDA. Id. § 355(j)(5)(B)(iii). This period is referred to as the “thirty-month stay.” Eli Lilly & Co. v. Teva Pharms. USA, Inc., 557 F.3d 1346, 1348-49 (Fed. Cir. 2009). During this time, the agency is limited to issuing “tentative approval”-a “notification . . . that [an] application . . . meets the requirements [for approval]. . . but cannot receive effective approval” because of a patent issue or outstanding period of exclusivity. 21 U.S.C. § 355(j)(2)(B)(iv)(II)(dd). If the ANDA applicant prevails in district court before the thirty-month stay expires, the FDA may immediately approve the ANDA. Id. § 355(j)(5)(B)(iii)(I). The thirty-month stay is unavailable, moreover, if the relevant patent was listed after the ANDA was submitted. Id. § 355(j)(5)(B)(iii).

         Because patent litigation is both expensive and risky, Congress created an incentive to encourage generic manufacturers to submit well-founded Paragraph IV certifications. See Teva Pharms. USA, Inc. v. Sebelius, 595 F.3d 1303, 1318 (D.C. Cir. 2010) [hereinafter “Teva v. Sebelius”]. The statute provides that the “first applicant”-that is, the first generic manufacturer to file a “substantially complete” ANDA containing a Paragraph IV certification and to “lawfully maintain[]” that certification-is entitled to 180 days of generic market exclusivity. 21 U.S.C. § 355(j)(5)(B)(iv). A “substantially complete” ANDA is defined as an application that is “sufficiently complete” on “its face” to “permit a substantive review” and that “contains all the [requisite] information.” Id. § 355(j)(5)(B)(iv)(II)(cc). The FDA represents that it does not designate a first applicant until it is ready to approve the first ANDA. See Dkt. 26 at 9. At that time, if the first applicant is approved and ready to go to market, it is entitled to 180 days of generic exclusivity. When more than one generic manufacturer meets the definition of “first applicant, ” the manufacturers will share the right to exclude other generics (but not each other) from the market.

         The FDCA, however, contains six “forfeiture events” under which a first applicant may forfeit eligibility for the 180-day exclusivity period. Under the first, forfeiture occurs if the first applicant “fails to market the drug” by a certain date. Id. § 355(j)(5)(D)(i)(I). As is relevant here, that date is 75 days after “a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken, ” holding that “the patent [listed in the Paragraph IV certification] is invalid or not infringed.” Id. § 355(j)(5)(D)(i)(I)(bb)(AA). Forfeiture also occurs if the first applicant withdraws its ANDA or the FDA “considers the application to have been withdrawn” because it does not meet the requirements for approval, id. § 355(j)(5)(D)(i)(II); the first applicant “amends or withdraws the certification for all of the patents with respect to which [the] applicant submitted a certification qualifying [it] for the 180-day exclusivity period, ” id. § 355(j)(5)(D)(i)(III); the first applicant “fails to obtain tentative approval of the application within 30 months after the date on which the application is filed” and that delay was not “caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application was filed, ” id. § 355(j)(5)(D)(i)(IV); the first applicant enters into “an agreement with another applicant[, ] . . . the holder of the application for the listed drug, or an owner of the patent that is the subject of the [Paragraph IV] certification” and that agreement is found to violate antitrust laws, id. § 355(j)(5)(D)(i)(V); or “[a]ll of the patents as to which the applicant submitted a certification qualifying it for the 180-day exclusivity period have expired, ” id. § 355(j)(5)(D)(i)(VI). The FDCA further provides that, if all first applicants forfeit their exclusivity, then “no applicant shall be eligible for the 180-day exclusivity period.” Id. § 355(j)(5)(D)(iii)(II).

         B. Factual Background

         This case concerns the 180-day exclusivity period for the generic version of Restasis®, a drug used to stimulate tear production. Dkt. 1 at 2 (Compl. ¶ 1). In 2017, the brand-name manufacturer of Restasis®, Allergan, Inc. (“Allergan”), earned more than $1.4 billion in net revenues for the drug. Id. at 12 (Compl. ¶ 21). Teva estimates that the 180-day exclusivity period for the generic version, cyclosporine ophthalmic emulsion (“cyclosporine”), is worth “more than $50 million dollars in net revenues.” Dkt. 1-1 at 8 (Groff Decl. ¶ 14).

         Teva alleges that it qualifies as the “first applicant” to submit a Paragraph IV certification for Restasis® and that, as a result, it is entitled to 180 days of generic exclusivity. Dkt. 1 at 2 (Compl. ¶ 1). Teva fears, however, that its statutory right will be extinguished once the FDA applies the interpretation of “first applicant” it recently espoused in a letter decision relating to another drug. Dkt. 1 at 25 (Compl. ¶ 41). To avoid that loss, Teva seeks a declaratory judgment that (1) the FDA's interpretation of “first applicant” in that letter decision is invalid under the Administrative Procedure Act (“APA”) and that (2) Teva is entitled to the 180-day exclusivity period. Id. at 37 (Compl. Prayer). Teva also seeks to enjoin the FDA from “approving any [ANDA] that references Restasis® . . . other than Teva's ANDA” during the pendency of this litigation unless that ANDA meets Teva's definition of “first applicant.” Dkt. 2-2 at 2. The relevant events are as follows:

         1. ANDA Submissions and Patent Litigation

         Allergan received FDA approval to market Restasis®, a pioneer drug to treat dry eye, on December 23, 2002. Dkt. 1 at 17 (Compl. ¶ 29). Allergan originally listed two patents associated with Restasis® in the Orange Book: U.S. Patent No. 4, 839, 342 (“the ‘342 patent”) and No. 5, 474, 979 (“the ‘979 patent”). Id. The ‘342 patent expired on August 2, 2009, and the ‘979 patent expired on May 17, 2014. Id. Shortly before the ‘979 patent expired, Allergan added five new Restasis®-related patents to the Orange Book, beginning with U.S. Patent No. 8, 629, 111 (“the ‘111 patent”), which issued on January 14, 2014. Dkt. 26-1 at 4 (Ex. A) (Cyclosporine Comment Request). In February 2016, Allergan added a sixth patent. Dkt. 27-1 at 13 n.4; see also Allergan, Inc. v. Teva Pharms. USA, Inc., No. 2:15-cv-1455, 2017 WL 4803941, at *12 (E.D. Tex. Oct. 16, 2017) (Bryson, J., sitting by designation). The ‘111 patent is the subject of the Paragraph IV certification at issue here.

         Teva filed its ANDA for cyclosporine on January 23, 2012. Dkt. 1 at 17 (Compl. ¶ 30). At the time, the “only unexpired patent listed in the Orange Book” for Restasis® was the ‘979 patent. Id. That patent was due to expire in May 2014, and Teva filed a Paragraph III certification, indicating that it intended to enter the market after the ‘979 patent expired. Id. (Compl. ¶¶ 29, 30). Once Teva submitted its ANDA, the FDA began “its customary pre-filing review . . . for ‘substantial completeness.'” Id. at 18 (Comp. ¶ 31) (citing 21 U.S.C. § 355(j)(5)(B)(iv)(II)(cc)). Pursuant to the FDA's regulations, the agency “may not consider an ANDA to be received” if the application is incomplete “on its face.” 21 C.F.R. § 314.101(d)(3). According to Teva, the FDA's initial review of its ANDA was “plagued by irregularities.” Dkt. 1 at 18 (Compl. ¶ 31). Teva alleges that the FDA failed to act on its ANDA for nearly fifteen months. Id. at 17-18 (Compl. ¶¶ 30-31). The agency then allegedly delayed the review process further by requesting “additional information from Teva, ” “nearly all of which had been provided in Teva's original ANDA.” Id. Finally, the FDA issued a letter “notif[ying] Teva that it was refusing” to receive “the company's ANDA, ” id. (Compl. ¶ 32)-a decision the agency later rescinded in June 2015, id. at 21 (Compl. ¶ 37).

         While Teva “was considering its response to the [FDA's letter], ” the Patent and Trademark Office issued the ‘111 patent. Id. at 19-20 (Compl. ¶ 34). That same day-January 14, 2014-Teva amended its ANDA to include a Paragraph IV certification with respect to the '111 patent. Id. at 20 (Compl. ¶ 35). Although the FDCA requires an ANDA applicant to provide notice of a Paragraph IV certification at the same time it “submits [an] amendment or supplement” to its ANDA, see 21 U.S.C. § 355(j)(2)(B)(ii)(II), Teva “informed the FDA” that it would wait until “[the] FDA reversed its . . . decision and received Teva's ANDA for review, ” citing the “FDA's judicially-affirmed rule” that “legally-required notice will be considered timely-provided only . . . after [the] FDA's acknowledgment letter receiving [the] ANDA” is issued. Dkt. 1 at 21 (Compl. ¶ 36) (citing Allergan, Inc. v. Actavis, Inc., Nos. 14-cv-638 & 14-cv-188, 2014 WL 7336692, at *11-12 (E.D. Tex. Dec. 23, 2014)). On July 9, 2015, thirty months after Teva submitted its ANDA, the FDA issued a formal acknowledgment letter deeming Teva's ANDA “received . . . as of January 23, 2012.” Id. (Compl. ¶ 37). Teva, in turn, timely dispatched its Paragraph IV notices to Allergan and the ‘111 patentees. Id. at 22 (Compl. ¶ 37). Teva also filed Paragraph IV certifications with respect to the five other Restasis® patents and timely effected notice. Dkt. 27-1 at 13; see also Allergan, Inc. v. Teva Pharms. USA, Inc., 2017 WL 4803941, at *12, *15.

         According to Teva, there are at least eight other known ANDA applicants for cyclosporine.[1] Dkt. 1-1 at 8 (Groff Decl. ¶ 14). The FDA has indicated that “[o]ne or more” ANDAs containing “[P]aragraph IV certifications to the ‘979 patent” were submitted “before January 14, 2014.” Dkt 26-1 at 4 (Ex. A) (Cyclosporine Comment Request). No. applicant in this group, however, received an acknowledgment letter from the FDA before “the ‘979 patent expired.” Id. In addition, four generic manufacturers confirmed that they have pending ANDAs for cyclosporine in public submissions to the FDA, all of which presumably reference the ‘111 patent. See Dkt. 26-2 (Ex. B) (InnoPharma, Inc.); Dkt. 26-3 (Ex. C) (Apotex Inc.); Dkt. 26-4 (Ex. D) (Axar Pharmaceuticals); Dkt. 26-6 (Ex. F) (Akorn Pharmaceuticals). Finally, the intervenors Mylan, Deva, and Famy Care have all represented that they filed ANDAs for generic cyclosporine. Dkt. 6-1 at 3 (Mylan); Dkt. 10-1 at 5 (Deva); Dkt. 33-1 at 6-7 (Famy Care).

         In August 2015, Allergan filed suit against Teva (and other Paragraph IV ANDA applicants) for infringing the six unexpired Restasis® patents listed in the Orange Book. See Allergan, Inc. v. Teva Pharms. USA, Inc., 2017 WL 4803941, at *12. Allergan granted the defendants a covenant not to sue for two of the patents. Id. at *15. The district court then invalidated the remaining four patents, including the ‘111 patent. See Id. at *65. Allergan appealed the district court's decision, and, on November 13, 2018, the Federal Circuit summarily affirmed the district court's decision. See Allergan, Inc. v. Teva Pharms. USA, Inc., 742 Fed.Appx. 511 (Fed. Cir. 2018). Allergan then petitioned for panel rehearing and rehearing en banc. Dkt. 104, Allergan, Inc. v. Teva Pharms. USA, Inc., No. 18-1130 (Fed. Cir. Dec. 21, 2018). That petition is still pending.

         2. FDA Proceedings Regarding the 180-Day ...


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