Otsuka Pharmaceutical Co., Ltd. et al v. Burwell et al

Filing 57

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 4/8/2015. (jf2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division
*
OTSUKA PHARMACEUTICAL CO., LTD.,
*
Plaintiff,

*

v.

Case No.: GJH-15-852
*

SYLVIA MATHEWS BURWELL, ET AL.,
*
Defendants.
*
*

*

*

*

*

*

*

*

*

*

*

*

*

MEMORANDUM OPINION
On March 24, 2015, Plaintiffs Otsuka America Pharmaceutical, Inc., Otsuka
Pharmaceutical Development and Commercialization, Inc., and Otsuka America Pharmaceutical
Inc., (collectively, “Otsuka”) filed a two count complaint against Defendants U.S. Food and
Drug Administration, Sylvia Mathews Burwell, Dr. Margaret Hamburg, and Dr. Stephen Ostroff
(collectively, “FDA”) challenging various actions it took concerning its approval of a
supplemental new drug application (“sNDA”) for Otsuka’s drug aripiprazole, which Otsuka
markets under the name Abilify. See ECF No. 1. Contemporaneous with the filing of its
complaint, Otsuka filed a motion for summary judgment (see ECF No. 2), as well as a motion to
expedite proceedings. See ECF No. 3.
On March 25, 2015, the Court conducted a teleconference during which the parties
presented arguments concerning Otsuka’s motion to expedite. After considering the parties’
respective positions, the Court granted Otsuka’s motion to expedite (see ECF No. 7) and issued a
Scheduling Order. See ECF No. 6. The Scheduling Order required that FDA file a full and
complete administrative record by March 31, 2015. See id. Thus, on March 31, 2015, FDA filed
1

its “administrative record to date,” which consisted of seven documents comprising 288 pages.
Believing FDA’s administrative record to be incomplete, Otsuka filed an Emergency Motion to
Compel Immediate Filing of the Complete Administrative Record. See ECF No. 38. That motion
to compel, which is now fully briefed, is presently before the Court on a shortened briefing
schedule given the expedited nature of this case. See ECF No. 40; see also ECF No. 7. For the
reasons discussed more fully below, Otsuka’s motion to compel is GRANTED.
I.

BACKGROUND
Count one of Otsuka’s complaint challenges FDA’s approval of Abilify for the treatment

of Tourette’s Disorder in the general population as arbitrary and capricious under the
Administrative Procedure Act (“APA”). See ECF No. 1 at ¶¶ 1, 58-63.1 According to Otsuka, in
2014, following the conclusion of clinical trials establishing the safety and efficacy of the use of
Abilify in the pediatric population, Otsuka submitted a sNDA to FDA. See id. at ¶ 38. Otsuka’s
sNDA sought approval for the new indication of the treatment of Tourette’s Disorder in pediatric
patients which, according to Otsuka, was the only population group in which Otsuka had
conducted safety and efficacy studies. See id.
On December 12, 2014, FDA sent a letter to Otsuka notifying it that FDA was granting
marketing approval for Abilify “based upon two adequate and well-controlled trials that
demonstrate the efficacy for the new indication in pediatric patients with Tourette’s Disorder.”
Id. at ¶ 46. Counsel for Otsuka thereafter wrote to FDA’s Chief Counsel setting forth the
company’s understanding that FDA’s approval of Abilify of an orphan indication for treatment
of pediatric patients with Tourette’s Disorder meant that FDA was precluded from approving an
Count two of Otsuka’s complaint, which seeks a declaration barring FDA from approving any
generic versions of Abilify pending the expiration of Otsuka’s seven-year period of orphan drug
market exclusivity, is not at issue here as there is no apparent dispute concerning the adequacy of
the administrative record as it pertains to this count.
1

2

abbreviated new drug application (“ANDA”) for a generic version of Abilify for any indication
pending the expiration of Otsuka’s statutory seven-year period of orphan drug market exclusivity
for the new indication. See id. at ¶ 22.
Shortly after receiving Otsuka’s letter, FDA sent Otsuka a letter on February 24, 2015,
informing the company that “as the first sponsor of [aripiprazole] to obtain marketing approval
for this indication, [Otsuka] is entitled to seven years of orphan-drug exclusive approval . . . for
treatment of Tourette’s disorder.” Id. ¶ 23. Later that day, FDA sent Otsuka a “corrected”
approval letter in which FDA advised Otsuka that its earlier December 12, 2014, approval letter
“contained an error in the ‘indications’ section.” Id. According to Otsuka, FDA attempted to
correct this error by broadening the approved indication from treatment “in pediatric patients
with Tourette’s Disorder” to treatment of “patients with Tourette’s Disorder.” Id. Otsuka
maintains that by taking such action FDA approved Abilify for the treatment of Tourette’s
Disorder in a population that was larger than that for which Otsuka had demonstrated the drug’s
safety and efficacy. Accordingly, Otsuka filed the instant complaint contending the FDA’s
approval of its sNDA was arbitrary, capricious, and in violation of the law.
II.

STANDARD OF REVIEW
“Judicial review of an agency action must be premised on the complete administrative

record.” Novartis Pharm. v. Shalala, No. 99-323, 2000 WL 1769589, at *2 (D.D.C. Nov. 27,
2000) (citing Serono Lab. v. Shalala, 35 F.Supp.2d 1, 2 (D.D.C. 1999)). Section 706 of the APA
directs a court evaluating an agency action to “review the whole record or those parts of it cited
by a party.” 5 U.S.C. § 706. “[A]n agency is entitled to a strong presumption of regularity that it
properly designated the administrative record.” Pac. Shores Subdivision, Cal. Water Dist. v. U.S.
Army Corps of Eng'rs, 448 F.Supp.2d 1, 5 (D.D.C. 2006). Thus, “[s]upplementation of the

3

administrative record is the exception, not the rule.” Id. Nonetheless, an “agency may not skew
the record by excluding unfavorable information but must produce the full record that was before
the agency at the time the decision was made.” Blue Ocean Inst. v. Gutierrez, 503 F.Supp.2d
366, 369 (D.D.C. 2007). Nor may an agency exclude information simply because it did not rely
on it for its final decision. See Banner Health v. Sebelius, 945 F. Supp. 2d 1, 16 (D.D.C. 2013).
Rather, “a complete administrative record should include all materials that might have influenced
the agency’s decision, and not merely those on which the agency relied in its final decision.”
Amfac Resorts, L.L.C. v. U.S. Dep't of the Interior, 143 F. Supp. 2d 7, 12 (D.D.C. 2001) (internal
quotations omitted). “[I]f the agency decisionmaker based his decision on the work and
recommendations of subordinates, those materials should be included as well.” Id. Thus, “a court
reviewing an administrative tribunal’s decision on the record ‘should have before it neither more
nor less information than did the agency when it made its decision.’” Washington Metro. Area
Transit Auth. v. Local 689, Amalgamated Transit Union, 818 F. Supp. 2d 888, 907 (D. Md.
2011) (quoting IMS, P.C. v. Alvarez, 129 F.3d 618, 623 (D.C. Cir. 1997) (internal citations and
quotation marks omitted)).
If an agency fails to produce a complete administrative record, a party may request that
the record be supplemented. “An administrative record may be ‘supplemented’ in one of two
ways – either by (1) including evidence that should have been properly a part of the
administrative record but was excluded by the agency, or (2) adding extrajudicial evidence that
was not initially before the agency but the party believes should nonetheless be included in the
administrative record.” WildEarth Guardians v. Salazar, 670 F.Supp.2d 1, 5 n. 4 (D.D.C. 2009).
Here, Otsuka seeks supplementation on the first ground – that evidence before the decisionmaker at the time of the decisions has been excluded from the record. See ECF No. 38 at 9-13.

4

Supplementation on this ground is appropriate only under three “unusual circumstances”: “(1) if
the agency deliberately or negligently excluded documents that may have been adverse to its
decision, (2) if background information was needed to determine whether the agency considered
all the relevant factors, or (3) if the agency failed to explain administrative action so as to
frustrate judicial review.” See City of Dania Beach v. F.A.A., 628 F.3d 581, 590 (D.C. Cir.
2010) (internal quotation marks and citations omitted). Here, it appears that FDA has, at the very
least, negligently excluded documents relevant to its December 12, 2014 decision to approve
Otsuka’s sNDA.
III.

DISCUSSION
The fundamental question the Court must answer in resolving Otsuka’s motion to compel

is whether Otsuka’s complaint challenges FDA’s December 12, 2014 approval of Otsuka’s
sNDA or whether it challenges FDA’s February 24, 2015 corrected approval letter. For if Otsuka
is challenging the former, FDA effectively concedes that the administrative record is incomplete
and must therefore be supplemented. See ECF No. 47 at 2 (“Because plaintiffs’ Complaint does
not challenge FDA’s December 12, 2014 final agency action approving plaintiffs’ sNDA, there
is no need for FDA to produce the voluminous administrative record supporting that
unchallenged action.”). In resolving this threshold question, the Court need not look any further
than the first sentence of the first substantive paragraph of Otsuka’s complaint. There, Otsuka
states unequivocally that:
In count one of this complaint, Otsuka challenges FDA’s arbitrary,
capricious, and unlawful abuse of its authority in approving a
[sNDA]. FDA unlawfully broadened the scope of Otsuka’s
approved ‘indication for use’ of its prescription brand drug
aripiprazole, which Otsuka markets under the name Abilify®.

5

ECF No. 1 at ¶ 1. Thus, it is clear from the very first paragraph of the complaint that Otsuka
challenges FDA’s approval of Abilify for the treatment of Tourette’s Disorder in the general
population – a population that, Otsuka maintains, is larger than the pediatric population for
which Otsuka demonstrated the drug’s safety and efficacy. See also at ¶¶ 4, 18-21, 46-54, 58-63;
see also ECF No. 2 at 3, 4. Indeed, as Otsuka points out, each of the defendant-intervenors
similarly understand Otsuka to be challenging FDA’s original approval decision and not just the
February 24, 2015 “clarification” letter. See e.g., ECF No. 9-1 at 2, 8; ECF No. 29-1 at 3; ECF
No. 41-1 at 2. By misconstruing the obvious thrust of Otsuka’s complaint, the FDA excluded
documents, either purposely or inadvertently, that were plainly relevant to its December 12, 2014
approval of Otuska’s sNDA. Otsuka has therefore overcome the strong presumption of regularity
concerning the administrative record and has satisfied the standard for requiring FDA to
supplement the administrative record. See City of Dania Beach, 628 F.3d at 590.2
FDA discusses various practical problems it would face if it were forced to supplement
the administrative record – namely, the need for a protective order, the need to conduct
additional document review and redactions, and the need for supplemental briefing. See ECF No.
47 at 12, 15. The Court notes, however, that these problems are entirely self-inflicted wounds.
FDA had every opportunity to voice these concerns to the Court during the March 25, 2015
teleconference. Indeed, the Court specifically asked FDA if there was anything that made it
impossible or impracticable for it to assemble a complete administrative record. Aside from its

2

The Court also notes that if it is true, as FDA contends, that the February 24, 2015 letter did not
broaden the Abilify indication, and that the December 12, 2014 approval of Abilify was always
for the treatment of Tourette's in the general population, then it is inconsequential whether
Otsuka challenges the February letter or the December decision, as they are, in effect, the same
decision. And that is the decision that Otsuka challenges - the decision to approve a drug for an
indication that Otsuka contends has not been proven safe or effective.

6

jurisdictional concern, FDA voiced no such concerns. The Court therefore does not take kindly
to FDA’s belated arguments or its apparent dilatory tactics. The Court will simply not permit
FDA to run-the-clock on this litigation.3 Accordingly, the Court grants Otsuka’s motion and
ORDERS FDA to supplement the administrative record by Monday, April 13, 2015 at 9:00 am.
At that time, the administrative record will be closed and FDA will be precluded from relying
upon any evidence or materials not included in the record for the remainder of this litigation.
IV.

CONCLUSION
For the reasons stated above, the Court will GRANT Otsuka’s motion to compel.

Dated: April 8, 2015

/S/
George J. Hazel
United States District Judge

The Court also notes that it is not persuaded by FDA’s vague and hypothetical invocation of the
deliberative process and/or attorney-client privilege as shield to supplementing the record. See
ECF No. 47 at 8-10. FDA has not identified any specific documents, or categories of documents,
that it believes are covered by an applicable privilege. Thus, any assertion of privilege is, at this
point, premature and not a basis upon which to deny Otsuka’s motion.
3

7