LANNETT COMPANY, INC. et al v. UNITED STATES FOOD AND DRUG ADMINISTRATION et al

Filing 41

MEMORANDUM OPINION. Signed by Judge Reggie B. Walton on October 25, 2017. (lcrbw2)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
__________________________________________
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Plaintiffs,
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v.
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UNITED STATES FOOD AND DRUG
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ADMINISTRATION, et al.,
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Defendants.
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__________________________________________)
LANNETT COMPANY, INC. and
LANNETT HOLDINGS, INC.,

Civil Action No. 16-1350 (RBW)

MEMORANDUM OPINION
The plaintiffs, Lannett Company, Inc. and Lannett Holdings, Inc. (collectively,
“Lannett”), bring this action against the defendants, the United States Food and Drug
Administration (the “FDA”) and the United States, for judicial review of the FDA’s decision to
rescind “the marketing approval for one of [their] generic drugs[, Temozolomide,] based on the
agency’s argument that the approval was ‘mistakenly granted.’” Complaint (“Compl.”) at 2.
Specifically, Lannett petitions this Court to “[s]et aside the FDA’s rescission of [its]
[Abbreviated New Drug Application (“ANDA”)] approval” of Temozolomide, to “[d]eclare [the]
FDA’s rescission of [its] ANDA approval unlawful,” and to “[e]njoin [the] FDA from revoking
the ANDA approval for [its] Temozolomide Capsules in the future without a hearing, and
without following the procedures established by 21 U.S.C. § 355(e) [(2012)].” Id. at 18.
Currently before the Court are the Plaintiffs’ Motion for Summary Judgment (“Pls.’ Mot.”), ECF
No. 16, the Defendants’ Cross-Motion for Summary Judgment and in Opposition to Plaintiffs’
Motion for Summary Judgment (“Defs.’ Summ. J. Mot.”), ECF No. 37, and the Defendants’

Motion to Strike Extra-Record Documents (“Defs.’ Mot.”). After careful consideration of the
parties’ submissions and the administrative record (“A.R.”), 1 the Court concludes for the reasons
set forth below that it must deny the plaintiffs’ motion for summary judgment, grant the
defendants’ cross-motion for summary judgment, and deny as moot the defendants’ motion to
strike.
I.

STATUTORY AND REGULATORY BACKGROUND

The Food, Drug, and Cosmetic Act (the “FDCA”) provides that “[n]o person shall
introduce or deliver for introduction into interstate commerce any new drug, unless an approval
of an application filed pursuant to . . . this section is effective with respect to such drug.” 21
U.S.C. § 355(a). In order to obtain approval, a new drug application (a “NDA”) must include,
among other things, “full reports of investigations which have been made to show whether or not
[the] drug is safe for use and whether [the] drug is effective in use.” Id. § 355(b)(1)(A). Because
this process is “costly and time[-]consuming,” Congress amended the FDCA in 1984 to “permit[]
a manufacturer of a generic alternative to a pioneer drug to seek FDA approval by submitting an
[ANDA],” Serono Labs., Inc. v. Shalala, 158 F.3d 1313, 1316 (D.C. Cir. 1998), which references
and relies on the prior approval of the pioneer drug, Astellas Pharma US, Inc. v. FDA, 642 F.
Supp. 2d 10, 13–14 (D.D.C. 2009). So, “[r]ather than requiring the [ANDA] applicant to make
an independent showing that the proposed generic is itself safe and effective, the amended statute
requires a showing that the proposed generic operates in the same manner as the pioneer drug on

1

In addition to the filings already identified, the Court considered the following submissions in rendering its
decision: (1) the Memorandum in Support of Plaintiffs’ Motion for Summary Judgment (“Pls.’ Mem.”); (2) the
Defendants’ Memorandum in Support of Cross-Motion for Summary Judgment in Opposition to Plaintiffs’ Motion
for Summary Judgment (“Defs.’ Mem.”); (3) the Plaintiffs’ Opposition to Defendants’ Cross-Motion for Summary
Judgment and Reply in Support of Motion for Summary Judgment (“Pls.’ Reply”); (4) the Defendants’ Reply to
Plaintiffs’ Opposition to, and in further Support of, Defendants’ Cross-Motion for Summary Judgment (“Defs.’
Summ. J. Reply”); (5) the plaintiffs’ Opposition to Motion to Strike (“Pls.’ Opp’n”); and (6) the defendants’ Reply
to the Plaintiffs’ Opposition to Motion to Strike (“Defs.’ Reply”).

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which it is based.” Id.
To that end, FDA regulations require that an ANDA include information comparing,
among other things, the proposed generic drug’s “[a]ctive ingredients,” “[r]oute of
administration, dosage form, and strength” to the “reference listed drug.” 21 C.F.R.
§§ 314.94(a)(5–6) (2016). The ANDA must also contain “a full description of the methods used
in, and the facilities and controls used for, the manufacture, processing, and packing of such
drug.” 21 U.S.C. § 355(b)(1)(D); see also 21 C.F.R. § 314.94(a)(9)(i). For ANDA approval, the
FDA must find that these requirements, commonly referred to as current Good Manufacturing
Practice (“cGMP”), “are []adequate to assure and preserve [the generic drug’s] identity, strength,
quality, and purity.” 21 U.S.C. § 355(j)(4)(A). To make this assessment, the
FDA assesses cGMP compliance by inspecting the facility or facilities where the
drug will be manufactured. If the finished drug manufacturer will use an active
pharmaceutical ingredient manufactured by a different company, [the] FDA will
review the compliance status of each named facility and inspect the facilities of
both the finished drug manufacture and the active pharmaceutical ingredient
manufacturer as needed.
Pls.’ Mem. at 5. Once the FDA approves an ANDA, the ANDA sponsor may begin “market[ing]
its drug lawfully in interstate commerce.” Id. at 6; see also 21 U.S.C. § 355.
The FDCA also sets forth the process for the withdrawal of an ANDA approval, outlining
the circumstances in which the FDA is required to rescind an ANDA approval or when it may do
so in its discretion. See 21 U.S.C. § 355(e). Under either scenario, the FDCA requires “due
notice and opportunity for hearing to the applicant” before the FDA withdraws its ANDA
approval. Id. Relevant to this case, the FDA may withdraw ANDA approval on the basis of
“new information” regarding non-compliance with cGMP:
The Secretary may also, after due notice and opportunity for hearing to the
applicant, withdraw the approval of an application submitted . . . on the basis of
new information before him, evaluated together with the evidence before him
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when the application was approved, the methods used in, or the facilities and
controls used for, the manufacture, processing, and packing of such drug are
inadequate to assure and preserve its identity, strength, quality, and purity and
were not made adequate within a reasonable time after receipt of written notice
from the Secretary specifying the matter complained of.
Id. (emphasis added). 2 However, the FDA is not limited to these statutorily provided
circumstances for withdrawing ANDA approval, as it may also rescind an ANDA approval under
its “inherent authority” if done within a reasonable period of time and if Congress has not
otherwise spoken. See Ivy Sports Med., L.L.C. v. Burwell, 767 F.3d 81, 86 (D.C. Cir. 2014)
(“[A]dministrative agencies are assumed to possess at least some inherent authority to revisit
their prior decisions, at least if done in a timely fashion. . . . [However,] an agency may not rely
on inherent reconsideration authority ‘when Congress has provided a mechanism capable of
rectifying mistaken actions.’” (quoting Am. Methyl Corp. v. EPA, 749 F.2d 826, 835 (D.C. Cir.
1984))).
II.

FACTUAL BACKGROUND

Lannett Company, Inc., is a “manufacturer of generic drugs,” and Lannett Holdings, Inc.
“maintains, owns[,] and manages the intangible assets of its parent company Lannett Company,
Inc.” Compl. ¶ 3. Lannett Holdings, Inc. owns “the drug approval at issue in this case, and the
drug is to be manufactured by Lannett Company, Inc.” Id. And the drug, Temozolomide, “is an
oral chemotherapy drug used in the treatment of certain cancers.” Id. ¶ 18.
On February 15, 2011, “Lannett filed an ANDA with [the] FDA, seeking approval to
market generic Temozolomide capsules in a variety of different strengths.” Pls.’ Mem. at 8

2

Congress granted the Secretary of Health and Human Services (“HHS”) authority to approve and withdraw
approval of drug applications. See 21 U.S.C. § 355(b). Because the FDA is part of HHS, the Secretary of HHS is
permitted to delegate certain of his congressionally granted powers to the Commissioner of the FDA. See Defs.’
Mem. at 8 n.4 (citing FDA Staff Manual Guide 1401.1 and 1401.10, available at
http://www.fda.gov/AboutFDA/ReportsManualsForms/StaffManualGuides/ucm136380.htm). Among the powers
the Secretary of HHS has delegated to the FDA Commissioner is the power to approve and withdraw approval of
drugs. See id.

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(citing A.R. at FDA658). In conjunction with its ANDA, Lannett identified Chongqing Lummy
Pharmaceutical Co. Ltd. (“Lummy”), a company located in Chayuan, China, “as the proposed
manufacturer of the active pharmaceutical ingredient for the finished drug product.” Compl.
¶ 18; see also A.R. FDA659. As part of its review of Lannett’s ANDA, the FDA, in July 2013,
“conducted a pre-approval inspection of Lummy’s factory . . . to determine whether Lummy’s
manufacturing was in accordance with cGMP requirements.” Pls.’ Mem. at 9; see also A.R.
FDA659 n.5. The FDA determined that “Lummy[’s] facility had ‘an acceptable compliance
status,’” and this finding was documented in the FDA’s Center for Drug Evaluation and
Research’s electronic platform used in the review and processing of ANDAs. Pls.’ Mem. at 9
(quoting A.R. FDA659 n.5).
From March 14 to 16, 2016, an FDA investigator from the agency’s China office
conducted a routine inspection at Lummy’s facility to confirm that its cGMP compliance
remained acceptable. A.R. FDA59, FDA64. The inspection revealed that Lummy was “in the
process of moving manufacturing operations from the Chayuan site to the newly established
Changshou site located [near] . . . Chongqing city,” A.R. FDA68, and thus, the FDA investigator
inspected both manufacturing sites, A.R. FDA66. Although the Changshou “facility ha[d] not
been registered with the FDA,” Lummy “ha[d] already transferred all analytical instrumentation
and stability samples [for the Temozolomide batches] to the Changshou site.” A.R. FDA70.
Based on his inspection, the FDA “investigator . . . conclude[d] that there were significant cGMP
compliance problems relating to data integrity, including numerous records relating to
manufacturing that [he] determined to have been falsified.” Pls.’ Mem. at 10 (citing to A.R.
FDA4–7); see also Defs.’ Mem. at 9–10 (citing various portions of the A.R.). The investigator
provided Lummy with the list of objectionable practices and conditions he observed, and

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requested that Lummy provide a response indicating its corrective actions. See A.R. FDA79.
On March 15, 2016, the FDA investigator sent an e-mail “to the Office of Compliance
. . . and to [the Center for Drug Evaluation and Research’s Office of Pharmaceutical Quality’s]
Office of Surveillance,” informing them of his “recommendation that the Lummy facility be
classified as [Official Action Indicated (“OAI”)],” which is an inspection conclusion
“reflect[ing] the fact that ‘objectionable conditions were found and a regulatory action is
recommended.” A.R. FDA659; see also Defs.’ Mem. at 11. However, “[b]ecause the
investigator’s e[-]mail recommendation did not also include the ‘field alert’ form typically used
to trigger entry of an OAI alert into the [electronic p]latform, . . . staff responsible for entering
facility status into the [electronic p]latform were not immediately aware that such an alert had
not yet been entered.” A.R. FDA659. Consequently, the electronic platform still indicated that
Lummy maintained an acceptable compliance status with cGMP requirements, see A.R. FDA659
n.5., and on March 23, 2016, the FDA issued a letter indicating that Lannett’s ANDA had been
approved, see A.R. FDA14 (noting that the “[f]acilities are approve[d] in the [electronic
p]latform”); see also A.R. FDA19–20.
On the following day, March 24, 2016,
employees within [the Office of Surveillance had] became aware of the
discrepancy and entered an OAI alert into the [electronic p]latform to flag that the
Lummy facility was classified as potential OAI, a designation that should result in
[the Office of Pharmaceutical Quality] not recommending for approval or
tentative approval any application referencing [that] facility.
A.R. FDA659. On March 31, 2016, Lummy provided the FDA with a corrective action plan
addressing the investigator’s list of observed objectionable practices and conditions. A.R.
FDA32–58.
On April 1, 2016, the FDA sent a letter to Lannett requesting a teleconference to discuss

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“a commitment by [Lannett] to not distribute any Temozolomide product” and “[a] necessary
withdrawal of [Lannett’s] ANDA.” A.R. FDA649. The FDA and Lannett conducted the
teleconference on April 5, 2016, during which Lannett confirmed that Lummy had notified it of
the FDA’s March 2016 inspection findings and that it had not distributed any Temozolomide
product in the United States. A.R. FDA651–52. Also, Lannett stated that it “would not commit
to withdraw[ing]” its ANDA, but its representatives agreed to discuss with Lannett’s senior
management the FDA’s proposed rescission of its approval of Lannett’s ANDA, returning it
“back to pending status.” A.R. FDA652. Two weeks later, the FDA sent a letter to Lannett
indicating that the FDA had “erred in approving [Lannett’s] ANDA . . . despite the fact that the
information available to the agency at the time indicated that the compliance status of a facility
identified in [Lannett’s] ANDA was not acceptable to support approval.” A.R. FDA662. The
FDA also informed Lannett of the following three options that Lannett could exercise regarding
its ANDA: “request that [the] FDA withdraw approval of the application, . . . agree to immediate
rescission of approval, which would put [its] ANDA back into pending status, or . . . [within
thirty] days . . . provide information . . . on whether the compliance status of the Lummy facility
. . . was acceptable as of the date of approval, March 23, 2016.” A.R. FDA662–63. In response,
on April 21, 2016, Lannett sent a letter to the FDA proposing a fourth option that would permit
Lannett to submit for FDA review “a supplement pursuant to 21 C.F.R. § 314.70, and the
Guidelines for Industry-Changes to an Approved NDA or ANDA,” addressing a “move to a
different manufacturing site for the manufacture of the [Temozolomide capsules].” A.R.
FDA667; see also A.R. FDA666–71 (simultaneously asserting legal arguments as to why the
FDA could not rescind its approval without complying with statutorily required procedural
safeguards).

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Having failed to provide the FDA with the requested information regarding Lummy’s
cGMP compliance status as of the March 23, 2016 ANDA approval date within the allotted
thirty-day period, on May 16, 2016, the FDA sent another letter to Lannett advising Lannett that
it was “correcting its error and rescinding the approval letter for [Lannett’s] ANDA” and placing
Lannett’s ANDA back “in pending status.” A.R. FDA822; see also A.R. FDA818–22 (refuting
the legal arguments asserted by Lannett in its April 21, 2016 letter to the FDA). The FDA also
attached to its rescission letter a cGMP Complete Response letter, outlining the identified cGMP
deficiencies and requiring Lannett to respond in accordance with 21 C.F.R. § 314.110(b). See
A.R. FDA824–27.
On June 28, 2016, in light of the parties’ unsuccessful efforts to resolve this dispute,
Lannett simultaneously filed this civil action in this Court, see generally Compl., and a protective
appeal in the District of Columbia Circuit given its exclusive jurisdiction pursuant to § 355(h) to
adjudicate appeals of orders withdrawing ANDA approvals based on § 355(e), see Pls.’ Mem. at
14. At the appellate level, Lannett petitioned the Circuit to stay “the protective appeal pending
the conclusion of the present case,” which the Circuit granted. Id. The parties now both move
for summary judgment in their favor.
III.

STANDARD OF REVIEW

In cases seeking judicial review of agency action under the Administrative Procedure
Act (“APA”), “[s]ummary judgment is the proper mechanism for deciding, as a matter of law,
whether an agency action is supported by the administrative record and consistent with
the APA standard of review.” Loma Linda Univ. Med. Ctr. v. Sebelius, 684 F. Supp. 2d 42, 52
(D.D.C. 2010) (citing Stuttering Found. of Am. v. Springer, 498 F. Supp. 2d 203, 207 (D.D.C.
2007)), aff’d, 408 F. App’x 383 (D.C. Cir. 2010). The APA requires that a court reviewing

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agency action “shall review the whole record or those parts of it cited by a party.” 5 U.S.C.
§ 706 (2012). “It is a widely accepted principle of administrative law that the courts base their
review of an agency’s actions on the materials that were before the agency at the time its
decision was made.” IMS, P.C. v. Alvarez, 129 F.3d 618, 623 (D.C. Cir. 1997). Due to the
limited role a court plays in reviewing agency action based on the administrative record, the
typical summary judgment standards of review set forth in Federal Rule of Civil Procedure 56 do
not apply. See Stuttering Found. of Am., 498 F. Supp. 2d at 207. Instead, “[u]nder the APA, it
is the role of the agency to resolve factual issues to arrive at a decision that is supported by the
administrative record, whereas ‘the function of the district court is 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. (quoting Occidental Eng’g Co. v. Immigration & Naturalization Servs., 753
F.2d 766, 769–70 (9th Cir. 1985)). Thus, “when a party seeks review of agency action under
the APA, the district judge sits as an appellate tribunal,” and “[t]he entire case on review is a
question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir.
2001) (quotation marks omitted).
The APA “sets forth the full extent of judicial authority to review executive agency
action for procedural correctness.” FCC v. Fox Television Stations, Inc., 556 U.S. 502, 513
(2009). It requires courts to “hold unlawful and set aside agency action, findings, and
conclusions” that are “arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A). However, “[t]he scope of review under the
‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that
of the agency.” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983). Nonetheless, the agency must “examine the relevant data and articulate a

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satisfactory explanation for its action including a ‘rational connection between the facts found
and the choice made.’” Id. (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168
(1962)). In any event, courts “will uphold a decision of less than ideal clarity if the agency’s
path may reasonably be discerned.” Pub. Citizen, Inc. v. FAA., 988 F.2d 186, 197 (D.C. Cir.
1993) (quoting Bowman Transp., Inc. v. Arkansas–Best Freight Sys., Inc., 419 U.S. 281, 286
(1974)).
Where agency action turns on questions of statutory interpretation, courts must utilize the
two-step process established in Chevron, U.S.A., Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984). First, courts must determine “whether Congress has directly spoken
to the precise question at issue.” Id. at 842. In resolving this question, courts must exhaust the
“traditional tools of statutory construction,” including textual analysis, structural analysis, and
(when appropriate) legislative history. Id. at 843 n.9. “If the intent of Congress is clear, that is
the end of the matter; for . . . court[s], as well as the agency, must give effect to the
unambiguously expressed intent of Congress.” Id. at 842–43. However, if courts conclude that
the statute is silent or ambiguous on the specific issue after employing these tools, they move on
to step two and defer to the agency’s interpretation, so long as it is based on a permissible
construction of the statute. See id. at 843. Indeed, “the whole point of Chevron is to leave the
discretion provided by the ambiguities of a statute with the implementing agency.” Ass’n of
Priv. Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 441 (D.C. Cir. 2012) (quoting Nat’l Cable
& Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005)).
IV.

ANALYSIS

The FDA argues that “the doctrine of exhaustion of administrative remedies militates
against this Court’s consideration of Lannett’s claims at the present time.” Defs.’ Mem. at 43.

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Specifically, the FDA contends that it “has not made a final, judicially reviewable decision on
the manufacturing compliance status of the facilities named in Lannett’s ANDA,” id. at 44,
because “[a]fter [it] afforded Lannett due process and properly rescinded the ANDA approval,
the application returned to pending status and was subject to regulatory requirements described
in [its] Complete Response Letter,” id. at 43. Therefore, according to the FDA, “Lannett’s
premature request for judicial ruling ‘amounts to an attempt to bypass the administrative
process.’” Id. at 44 (quoting Pub. Citizen Health Res. Grp. v. Comm’r, FDA, 740 F.2d 21, 29
(D.C. Cir. 1984)). In response, Lannett argues that the FDA’s “rescission action was the
consummation of the agency’s decision-making process to revoke the approval (not a tentative or
interlocutory decision), and definitively adjudicated and revoked Lannett’s legal right to market
Temozolomide capsules,” and thus, “the rescission action meets the test for a ‘final agency
action’ under the APA.” Pls.’ Reply at 27 n.16 (quoting Bennett v. Spear, 520 U.S. 154, 177–78
(1997)). Additionally, Lannett asserts that it “was not required to exhaust administrative
remedies before filing this case” because the “FDA’s rescission action formally and definitively
deprived [it] of its legal entitlement to market Temozolomide capsules.” Id. (relying on Darby v.
Cisneros, 509 U.S. 137 (1993)).
It is well established that “a court may not review a non-final agency action.”
Conservation Force v. Salazar, 919 F. Supp. 2d 85, 89 (D.D.C. 2013); see also Holistic Candlers
& Consumers Ass’n v. FDA, 664 F.3d 940, 943 (D.C. Cir. 2012) (“The APA, however, only
provides a right to judicial review of ‘final agency action for which there is no other adequate
remedy in a court.’” (emphasis in original) (quoting 5 U.S.C. § 704)). “An agency action is final
if it ‘1) marks the consummation of the agency’s decision making process’ and 2) affects the
‘rights or obligations . . . [or the] legal consequences’ of the party seeking review.”

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Conservation Force, 919 F. Supp. 2d at 89 (omission and alteration in original) (quoting Bennett,
520 U.S. at 177–78); see also Darby, 509 U.S. at 143 (“[T]he finality requirement is concerned
with whether the initial decisionmaker has arrived at a definitive position on the issue that
inflicts an actual, concrete injury.” (quoting Williamson Cty. Reg’l Planning Comm’n v.
Hamilton Bank of Johnson City, 473 U.S. 172, 193 (1985))). “But[,] an agency action is ‘final
for the purposes of [the APA]’ only after a plaintiff has exhausted all administrative remedies
expressly prescribed by statute or agency rule.” Holistic Candlers & Consumer Ass’n v. FDA,
770 F. Supp. 2d 156, 163 (D.D.C. 2011) (second alteration in original) (quoting Darby, 509 U.S.
at 146), aff’d, 664 F.3d at 940.
“Another ‘long-settled rule of judicial administration’ is the principle that a court that has
been asked to compel an agency to act ‘will stay its hand until the plaintiff has exhausted
whatever internal remedies the agency provides[.]” Mackinac Tribe v. Jewell, 87 F. Supp. 3d
127, 137 (D.D.C. 2015) (alteration in original) (first quoting Myers v. Bethlehem Shipbuilding
Corp., 303 U.S. 41, 50 (1938), then quoting Glisson v. Forest Serv., 55 F.3d 1325, 1326 (7th Cir.
1995)). The purposes of exhaustion include: “giving agencies the opportunity to correct their
own errors, affording parties and courts the benefits of agencies’ expertise, [and] compiling a
record adequate for judicial review[.]” Id. (alterations in original) (quoting Avocados Plus Inc.
v. Veneman, 370 F.3d 1243, 1247 (D.C. Cir. 2004)). Consequently, “a plaintiff’s failure to
pursue an administrative process that could remedy [the] plaintiff’s claims will preclude judicial
review of agency action, so long as the purposes of administrative exhaustion supports such bar.”
Id.
Here, the Court does not find that the FDA’s May 16, 2016 rescission letter and its
accompanying Complete Response Letter constitute a final agency action reviewable under the

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APA for several reasons. Initially, the Court notes that this issue—whether the FDA’s rescission
of a mistakenly approved ANDA and placement of that ANDA back into the review process
queue is a final agency action—appears to be one of first impression, as the Court was unable to
locate any legal authority addressing this precise issue. Notwithstanding the lack of guidance on
this specific issue, sufficient legal authority supports the Court’s conclusion. As previously
noted, for an agency action to be final, it must first “mark the consummation of the agency’s
decisionmaking process.” Sw. Airlines Co. v. U.S. Dep’t of Transp., 832 F.3d 270, 275 (D.C.
Cir. 2016) (quoting Bennett, 520 U.S. at 178). To demonstrate that the FDA’s rescission action
satisfies this first prong of the finality doctrine, Lannett argues that the FDA’s action resulted in
the “consummation of the agency’s decision-making process to revoke the approval” of its
ANDA for Temozolomide. Pls.’ Reply at 27 n.16. However, Lannett’s position is too narrow
for the Court to accept, primarily because Lannett’s position focuses solely on the rescission of
the approval, which Lannett equates as a final agency action. See id. But, “[i]n assessing
whether a particular agency action qualifies as final for purposes of judicial review, [this Circuit]
and the Supreme Court have looked to the way in which the agency subsequently treats the
challenged action.” Sw. Airlines Co., 832 F.3d at 275 (citing cases). Applying that principle to
what occurred in this case, although the FDA did rescind Lannett’s ANDA approval, the FDA
expressly advised Lannett that its ANDA was “now in pending status.” A.R. FDA822. The
FDA also informed Lannett that if it “submit[ed] an amendment to [its] ANDA, as [Lannett’s
April 21, 2016] letter suggest[ed it was] considering, to substitute an alternative supplier for
Lummy, [the FDA] w[ould] give that amendment . . . prompt attention.” Id. In addition, the
FDA’s cGMP Complete Response letter submitted along with the rescission letter specifically
outlined the regulatory options available to Lannett and the procedures that Lannett was required

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to satisfy to reacquire approval of its ANDA. See A.R. FDA826 (“Within one year after the date
of this letter, you are required to respond by taking one of the actions available under 21 C.F.R. §
314.110(b)). Thus, the FDA’s rescission action did not represent the conclusion of its
decision-making process regarding the review process for Lannett’s ANDA or its ultimate
decision to either approve or deny Lannett’s ANDA. See Rhea Lana, Inc. v. U.S. Dep’t of
Labor, 824 F.3d 1023, 1032 (D.C. Cir. 2016) (“[This Circuit has] repeatedly held that agency
action is not final if the adverse effects of the action depend ‘on the contingency of future
administrative action.’” (quoting DRG Funding Corp. v. Sec’y of Hous. & Urban Dev., 76 F.3d
1212, 1214 (D.C. Cir. 1996))).
Nonetheless, even if the FDA’s rescission action could be perceived as the consummation
of its decision-making process, the Court is not convinced that this action satisfies the second
prong of the finality doctrine, i.e., an action “by which [Lannett’s] rights or obligations have
been determined.” Id. at 1026 (quoting Bennett, 520 U.S. at 178). As support for its position
that the second prong is satisfied, Lannett argues that the FDA “definitively adjudicated and
revoked Lannett’s legal right to market Temozolomide capsules.” Pls.’ Reply at 27 n.16.
However, Lannett “pictures itself, quite incorrectly, as having been deprived of a vested right.
[Rather, i]t had no right to put on the market a drug when facts were available indicating that the
public health might be injured.” Am. Therapeutics, Inc. v. Sullivan, 755 F. Supp. 1, 2 (D.D.C.
1990) (denying the plaintiff’s motion for judgment on the pleadings because the FDA, which had
rescinded its approval of the plaintiff’s new drug application, was “entitled to some deference,”
as it made “a good faith mistake [that was] promptly discovered and corrected, nothing more”).
Additionally, the FDCA expressly precludes the FDA from approving an ANDA if it finds that
“the methods used in, or the facilities and controls used for, the manufacture, processing, and

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packing of the drug are inadequate to assure and preserve its identity, strength, quality, and
purity.” See 21 U.S.C. § 355(j)(4)(A). Therefore, based on the facts available to the FDA at the
time it mistakenly approved Lannett’s ANDA, the FDA expeditiously rescinded Lannett’s
authorization to market the Temozolomide capsules because that authorization was not legally
valid, a conclusion that Lannett does not challenge. See Pls.’ Mem. at 21–41 (primarily arguing
that the FDA was required under § 355(e) to provide Lannett with notice and a pre-rescission
hearing because the information regarding Lummy’s failure to comply with cGMP requirements
were not before the FDA personnel who actually made the approval decision). Thus, as Lannett
did not have a validly vested legal right given the incomplete information that had been made
available to the FDA, it appears that Lannett “seeks only to profit from [the] FDA’s inadvertent
and quickly corrected mistake.” Am. Therapeutics, Inc., 755 F. Supp. at 2. 3
Furthermore, the FDA’s rescission action cannot be considered final because Lannett has
yet to exhaust all of its available administrative remedies. See Woodford v. Ngo, 548 U.S. 81,
88–89 (“The doctrine [of exhaustion of administrative remedies] provides ‘that no one is entitled
to judicial relief for a supposed or threatened injury until the prescribed administrative remedy
has been exhausted.’” (quoting McKart v. United States, 395 U.S. 185, 193 (1969))). As
explained in the FDA’s cGMP Complete Response Letter, Lannett was obligated to comply with
the procedures provided in the FDA’s regulations by either resubmitting or supplementing its
ANDA, withdrawing its ANDA, or requesting an opportunity for a hearing. See A.R. FDA826;
see also 21 C.F.R. § 314.110(b). Instead of pursuing one of these administrative remedies,
Lannett opted to file this action seeking judicial review. See generally Compl.; Pls.’ Mem.
However, Lannett “must exhaust [all available administrative remedies] before proceeding to
3

But, even if Lannett did have “a right [that] had vested, [Lannett] was not deprived of a factual hearing to prove its
qualifications to make and sell the [Temozolomide capsules], and, given the circumstances, the post-denial hearing
offered easily met due process requirements.” Am. Therapeutics, Inc., 755 F. Supp. at 2.

15

federal court.” Conservation Force, 919 F. Supp. 2d at 90 (granting summary judgment because
the plaintiffs failed to exhaust the administrative remedies available to them under the agency’s
regulations).
Moreover, the Court agrees with the FDA that requiring Lannett to exhaust the agency’s
administrative remedies fulfills the purposes of the exhaustion doctrine. See Defs.’ Mem. at 44–
45. As the Supreme Court observed, “[e]xhaustion gives an agency ‘an opportunity to correct its
own mistakes with respect to the programs it administers before it is haled into federal court,’
and it discourages ‘disregard of [the agency’s] procedures.’” Woodford, 548 U.S. at 89 (second
alteration in original) (quoting McCarthy v. Madigan, 503 U.S. 140, 145 (1992)) In addition,
“exhaustion promotes efficiency.” Id.; see also id. (“Claims generally can be resolved much
more quickly and economically in proceedings before an agency than in litigation in federal
court. In some cases, claims are settled at the administrative level, and in others, the proceedings
before the agency convince the losing party not to pursue the matter in federal court. And even
where a controversy survives administrative review, exhaustion of the administrative procedure
may produce a useful record for subsequent judicial consideration.” (internal quotation marks
and citation omitted)). In this case, permitting Lannett to proceed with this litigation in its
current posture would disregard the procedures provided by the FDA in 21 C.F.R. § 314.110(b)
and undermine the FDA’s ability to correct, if appropriate, the mistakes alleged by Lannett. See
Garlic v. FDA, 783 F. Supp. 4, 5 (1992) (“[B]ypass[ing] the administrative remedies would
undermine the entire regulatory process.”).
Also, requiring Lannett to exhaust the available administrative remedies would aid
judicial review in several respects. For example, Lannett could persuade the FDA that its ANDA
should be approved through its anticipated supplement to its ANDA, wherein it intimates that

16

another manufacturer may be substituted to supply the Temozolomide capsules, and this could
possibly eliminate the need for judicial review. See Defs.’ Mem. at 45. Alternatively, Lannett
could request a hearing on “whether there are grounds for denying approval of . . . [its ANDA].”
21 C.F.R. § 314.110(b)(3). The FDA would then be required to either approve or deny Lannett’s
ANDA and provide Lannett with a hearing. See id. And, this would amount to a final agency
action that would be subject to review by the Circuit. See 21 U.S.C. § 355(h) (granting the
Circuit exclusive jurisdiction over appeals of an order refusing or withdrawing approval of an
ANDA application). Consequently, judicial review would benefit from Lannett exhausting the
administrative remedies available to it under 21 C.F.R. § 314.110(b).
V.

CONCLUSION

For the foregoing reasons, the Court concludes that the FDA’s rescission action is not a
final agency action subject to judicial review under the APA. Furthermore, Lannett failed to
exhaust all of its available administrative remedies pursuant to 21 C.F.R. § 314.110(b) prior to
bringing this case to federal court. Accordingly, the Court must grant summary judgment in
favor of the defendants. 4
SO ORDERED this 25th day of October, 2017. 5

REGGIE B. WALTON
United States District Judge

4

Having concluded that the FDA’s rescission action is not a final agency action within the meaning of the APA and
that Lannett failed to exhaust all of its available administrative remedies, the Court need not address the merits of
Lannett’s claims under the APA. Additionally, the Court’s conclusion is applicable to Lannett’s constitutional
claim, which, as Lannett asserts, “should be adjudicated . . . with the other four integrally-related [APA] claims.”
Pls.’ Reply at 27 n.16 (noting that Darby and the exhaustion doctrine explained therein should apply to its
constitutional claim). Moreover, given that the Court finds it unnecessary to address the merits of Lannett’s claims,
the Court will also deny as moot the defendants’ motion to strike extra-record documents.
5

The Court will contemporaneously issue an Order consistent with this Memorandum Opinion.

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