Mylan Pharmaceuticals Inc. v. United States Food and Drug Administration
Filing
103
MEMORANDUM OPINION AND ORDER DENYING MYLAN PHARMACEUTICALS, INC.S MOTION FOR PRELIMINARY INJUNCTION DKT. NO. 9 . Signed by District Judge Irene M. Keeley on 5/29/2014. (Copy counsel of record via CM/ECF)(jmm)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
MYLAN PHARMACEUTICALS, INC.,
Plaintiff,
WATSON LABORATORIES, INC.,
Intervenor-Plaintiff,
and
LUPIN PHARMACEUTICALS, INC.,
Intervenor-Plaintiff,
v.
//
CIVIL ACTION NO. 1:14CV75
(Judge Keeley)
UNITED STATES FOOD AND DRUG ADMINISTRATION,
Defendant,
and
TEVA PHARMACEUTICALS, USA, INC.,
Intervenor-Defendant.
MEMORANDUM OPINION AND ORDER DENYING MYLAN PHARMACEUTICALS,
INC.’S MOTION FOR PRELIMINARY INJUNCTION [DKT. NO. 9]
Pending before the Court is the motion of the plaintiff, Mylan
Pharmaceuticals, Inc. (“Mylan”), seeking a preliminary injunction
pursuant to Federal Rule of Civil Procedure 65. (Dkt. No. 9).
Mylan’s motion requires the Court to consider the permissibility of
the United States Food and Drug Administration’s (“the FDA”)
interpretation of exclusivity rights under the Hatch-Waxman Act for
reissued patents.
the motion.
For the reasons that follow, the Court DENIES
MYLAN PHARMACEUTICALS, INC., ET AL v. FDA, ET AL
1:14CV75
MEMORANDUM OPINION AND ORDER DENYING
MYLAN’S MOTION FOR PRELIMINARY INJUNCTION [DKT. NO. 9]
I. PROCEDURAL HISTORY
Mylan filed a complaint in this case on April 25, 2014,
challenging a letter decision by the FDA, addressing the marketing
exclusivity
eligibility
of
celecoxib
Abbreviated
Application (“ANDA”) applicants. (Dkt. No. 1).
New
Drug
Mylan then filed
a motion for preliminary injunction on April 28, 2014, seeking an
injunction to enjoin the FDA from withholding final approval on
May, 30, 2014 to any first-to-file celecoxib ANDA applicant,
pending either the Court’s decision on the merits of this case or
expiration of the 180-day celecoxib marketing exclusivity period.
(Dkt. No. 9). Watson Laboratories, Inc. (“Watson”) and Lupin
Pharmaceuticals,
plaintiffs
in
Inc.
this
(“Lupin”)
case,
and
subsequently
Teva
intervened
Pharmaceuticals
USA,
as
Inc.
(“Teva”) intervened as a defendant.
In its motion for preliminary injunction, Mylan challenges a
letter decision of the FDA that it contends erroneously concluded
a reissued patent does not give rise to eligibility for a period of
marketing exclusivity that is separate and distinct from the period
of exclusivity arising from the original patent.
According to
Mylan, original and reissued patents should be treated as two
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distinct
patents,
thereby
triggering
separate
periods
of
exclusivity.
During a hearing on May 15, 2014, the Court heard arguments
from the parties and intervenors.
It then requested supplemental
briefing on whether it had subject matter jurisdiction to review
the FDA’s letter decision.
The motion is now fully briefed and
ripe for review.
II. STATUTORY AND REGULATORY BACKGROUND
A.
Pharmaceutical Drug Applications:
Pharmaceutical drugs fall into two categories: drugs sold
under brand names and generics.
United States v. Generix Drug
Corp., 460 U.S. 453, 454-55 (1983).
Pioneer and generic drugs in
the United States are regulated under the Food, Drug and Cosmetic
Act (“FDCA”), which Congress amended extensively in 1984.
This
version is commonly referred to as the Hatch-Waxman Act. 21 U.S.C.
§ 355.
The
Hatch-Waxman
scheme
Applications (NDAs) and ANDAs.
distinguishes
between
New
Drug
To seek approval from the FDA for
a brand name drug such as Celebrex®, the manufacturer must file a
complete NDA.
Such a filing must provide the FDA with a listing of
all patents that claim the approved drug or a method of using the
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drug,
21
U.S.C.
§
355(j)(2)(A)(vii),
and
set
forth
data
establishing that the drug is safe and effective. 21 U.S.C. §
355(b). The NDA’s sponsor also must “file with the application the
patent number and the expiration date of any patent which claims
the drug...or which claims a method of using such 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.” 21 U.S.C. § 355(b)(1).1
The Hatch-Waxman Act grants brand name NDA holders a five year
exclusivity period before generics may enter the market. 21 U.S.C.
§ 355(j).
Once the NDA holder’s five year exclusivity period is
over, a company manufacturing a generic drug that is biologically
equivalent to the pioneer drug may seek FDA approval for the drug
by filing an ANDA.
Id. ANDA applicants need not submit their own
safety and effectiveness studies, but may instead rely on the NDA
applicant’s studies.
Id.
ANDA applicants also must provide a certification as to
whether their proposed generic drug would infringe the pioneer
drug’s patent.
Id.
Pertinent here is the fourth of the Hatch-
1
FDA is required to publish the patent information it receives
in the book titled “Approved Drug Products with Therapeutic
Equivalence Evaluations” (the “Orange Book”).
21 U.S.C. §
355(b)(1).
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Waxman
Act’s
four
certification
options
(“paragraph
IV
certification”), allowing ANDA applicants to certify that the NDA
patent “is invalid or will not be infringed by the manufacture,
use, or sale of the proposed generic drug.” 21 U.S.C. § 355
(j)(2)(A)(vii).
Thus, "an ANDA applicant making a paragraph IV
certification intends to market its product before the relevant
patents have expired." aaiPharma Inc. v. Thompson, 296 F.3d 227,
232 (4th Cir. 2002).
The NDA holder must receive notice that a
paragraph IV certification on behalf of an ANDA applicant has been
filed. If, upon receiving such notice, the patent holder sues the
applicant for patent infringement within 45 days, the FDA must stay
a decision on whether to approve the ANDA for 30 months, unless the
patent expires or a court holds that it is invalid or not infringed
during that time. 21 U.S.C. § 355(j)(5)(B)(iii).
Paragraph IV ANDA recipients receive a key 180-day marketing
exclusivity advantage.
21 U.S.C. § 355(j)(5)(B)(iv). During this
time, the FDA may not approve any later-filed ANDAs, thus allowing
the first applicant to sell its generic drug without competition
from other generic manufacturers.2
2
Id.
The marketing exclusivity
The statute governing this 180-day exclusivity changed
substantially with enactment of the Medicare Prescription Drug
Improvement and Modernization Act (“the MMA”), Public Law 108-173,
117 Stat. 2066 (Dec. 8. 2003). Because the first substantially
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period is triggered on the earlier of two dates: either
(1) the
date the FDA receives notice "of the first commercial marketing of
the drug under the previous application" (the “commercial marketing
trigger clause”), or (2) the date a court decides that the patent
is either invalid or not infringed (the “court decision trigger
clause”). See 21 U.S.C. § 355(j)(5)(B)(iv).
The
180-day
marketing
exclusivity
period
provides
an
opportunity for significant economic gain for the recipient, as it
allows the first-filing ANDA applicant to be the only entity
gaining profit from the sale of a generic version of the brand drug
during that time. As the Federal Trade Commission has stated, this
period "increases the economic incentives for a generic company to
be the first to file, because the generic applicant has the
potential to reap the reward of marketing the only generic product
(and, thus, to charge a higher price until more generic products
enter
[the
market])."
Federal
Trade
Commission,
To
Promote
Innovation: The Proper Balance of Competition and Patent Law and
complete ANDA referencing Celebrex® Capsules containing a paragraph
IV certification was submitted prior to the date of enactment of
the MMA, the 180-day exclusivity provisions (and implementing
regulations) governing the matter before the court are those that
were in effect prior to December 8, 2003. See MMA § 1102(b)(1).
Unless otherwise noted, therefore, all statutory references in this
brief reflect the pre-MMA version of the FDCA.
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Policy,
Ch.
3,
at
12(Oct.2003),
available
at
http:www.ftc.gov/os/2003/10/ innovationrpt.pdf.
B.
Reissued Patents
A patent may be reissued to correct certain errors in the
scope of claims or defects that would have otherwise invalidated
the patent. 35 U.S.C. § 251(a).
The relevant statute, 35 U.S.C. §
252, establishes the effect of reissued patents:
The surrender of the original patent shall take effect
upon the issue of the reissued patent, and every reissued
patent shall have the same effect and operation in law,
on the trial of actions for causes thereafter arising, as
if the same had been originally granted in such amended
form, but in so far as the claims of the original and
reissued patents are substantially identical, such
surrender shall not affect any action then pending nor
abate any cause of action then existing, and the reissued
patent, to the extent that its claims are substantially
identical with the original patent, shall constitute a
continuation thereof and have effect continuously from
the date of the original patent.
A reissued patent is identified by the U.S. Patent and
Trademark Office (“PTO”) with the letters “RE” preceding the patent
number.
its face.
A reissued patent must reference the original patent on
It also has the same expiration date as the original
patent. 35 U.S.C. § 251(a).
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In order to provide timely notice of reissuance to pending and
potential ANDA applicants, an NDA holder must submit information
regarding reissued patents to the FDA within 30 days of the date of
reissuance.
any
prior
21 U.S.C. § 355(c)(2).
patent
certification(s)
An ANDA applicant must amend
to
address
the
patent
as
reissued. 21 C.F.R. § 314.94(a)(12)(viii)(C)(1).
A reissued patent remains listed in the Orange Book until the
FDA has determined either that no ANDA applicant is eligible for
180-day exclusivity as to that patent or that their exclusivity
period has expired. 21 U.S.C. § 355(c)(2).
III. Factual Background:
A.
Celebrex® and Generic Celecoxib Products
Celebrex® is a nonsteroidal anti-inflammatory drug marketed by
Pfizer Inc. (“Pfizer”) under NDA No. 020998.
The Orange Book
currently lists four patents for Celebrex® capsules in 100 mg, 200
mg, and 400 mg strengths: U.S. Patent No. 5,466,823 (“the ‘823
patent”) (expired on Nov. 30, 2013; pediatric exclusivity expires
on May 30, 2014); U.S. Patent No. 5,563,165 (“the ‘165 patent”)
(expired on Nov. 30, 2013; pediatric exclusivity expires on May 30,
2014); U.S. Patent No. 5,760,068 (“the ‘068 patent”)(set to expire
on June 2, 2015; pediatric exclusivity expires on December 2,
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2015); and U.S. Patent No. 5,972,986 (“the ‘986 patent”)(set to
expire on Oct. 14, 2017; pediatric exclusivity expires on December
2, 2015).
On
November
manufacturer
to
13,
file
2003,
an
Teva
ANDA,
became
ANDA
No.
the
first
76-898,
generic
containing
Paragraph IV certifications to the ‘823, ‘165, and ‘068 patents for
generic Celebrex® (“celecoxib”) capsules in 100 mg, 200 mg, and 400
mg
strengths.
Pfizer
subsequently
sued
Teva
for
patent
infringement, and on March 20, 2007, a federal district court held
that the ‘823, ‘165 and ‘068 patents were valid and infringed by
Teva.
Pfizer Inc. v. Teva Pharms. USA, Inc., 482 F.Supp.2d 390
(D.N.J. 2007).
Teva appealed, and the Federal Circuit Court of
Appeals reversed the district court’s ruling in part, holding that
claims 1–4 and 11-17 of Pfizer’s ‘068 patent were invalid.
Pfizer
Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1253 (Fed. Cir. 2008).
The Federal Circuit issued its mandate on May 13, 2008.3 The FDA
tentatively approved Teva’s ANDA on April 27, 2012.
Nearly five years after the its litigation with Teva, Pfizer
corrected the deficiencies of the ‘068 patent, and on March 5,
3
Teva, however, was unable to go to market–and thus take
advantage of a marketing exclusivity period–at that time, as its
ANDA had not yet received final approval.
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2013, the PTO reissued the ‘068 patent (now under the number
RE44048, “the ‘048 patent”). On March 7, 2013, the reissued patent
was listed in the Orange Book.
On that same day, Teva updated its
Paragraph IV certification to cover the reissued version of the
‘068
patent.
Mylan
and
Watson
also
submitted
Paragraph
IV
certifications to the ‘048 patent on that day.
Teva, Mylan, Lupin, Watson and others successfully contested
the
validity
of
the
‘048
patent
in
the
Eastern
District
of
Virginia, thus making room for a Paragraph IV certification to be
granted on the reissued patent.4 See G.D. Searle LLC v. Lupin
Pharms., Inc., 2:13cv00121 (E.D.Va. Mar. 12, 2014).
On April 17,
2014, Teva and Pfizer entered into a settlement of the ‘048 patent
litigation that expressly allowed Teva to launch its generic
version of Celebrex® in December 2014, or earlier under certain,
undisclosed, circumstances.5
B.
The FDA’s Letter Decision
On April 24, 2014, the FDA issued a letter decision to all
celecoxib ANDA applicants in which it addressed the “legal and
4
The FDA may begin approving celecoxib ANDAs on May 30, 2014,
the date that Pfizer’s pediatric exclusivity on the ‘823 and ‘165
patents expires.
5
The terms of the settlement between Teva and Pfizer have not
been made public.
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regulatory scheme governing eligibility of ANDA applicants for 180day exclusivity under the FDCA as it existed prior to December 8,
2003, in a situation involving a reissued patent.”
FDA Letter at
1.
The FDA explained that it “does not consider a reissued patent
to
be
a
new
and
distinct
exclusivity.” Id. at 5.
patent
for
purposes
of
180-day
Rather, the FDA explained, it treats the
original and reissued patent as possessing a “single bundle of
patent rights,” and thus, “under the pre-MMA scheme, a 30-month
stay of approval arising from litigation based on a paragraph IV
certification to the original patent remains in effect after the
patent
is
reissued,
and
any
applicant
eligible
for
180-day
exclusivity based on a paragraph IV certification to the original
patent
remains
reissuance.”
eligible
for
that
exclusivity
after
patent
Id.
The FDA ultimately concluded that
[f]or purposes of 180-day exclusivity, upon the listing
of a reissued patent, a prior court decision on the
original patent is not regarded as having triggered 180day exclusivity for the single bundle of patent rights
represented by the original and reissued patent. In such
a case, eligibility for 180-day exclusivity is only
available to the applicant that first filed a paragraph
IV certification to the original patent, and that
applicant must make a timely submission of a paragraph IV
certification to the reissued patent to remain eligible
for 180-day exclusivity.
Id. at 11.
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In sum, the FDA found that only the first party to challenge
both the original patent and reissued version of that patent
qualifies for 180-day marketing exclusivity.
The FDA noted that
this outcome “best reconciles the complicated intersection between
the Hatch-Waxman [Act] and patent law, while allowing FDA to
administer the FDCA in a manner that is fair, predictable and
consistent with the goal of bringing generic products into the
market.” Id. at 10.
IV. Legal Standards
A.
Preliminary Injunctions
The Fourth Circuit has noted that “preliminary injunctions are
extraordinary remedies involving the exercise of a very farreaching power [that should be] granted only sparingly and in
limited circumstances.”
MicroStrategy Inc. v. Motorola, Inc., 245
F.3d 335, 339 (4th Cir. 2001).
In order to obtain a preliminary
injunction in this case, Mylan must establish the following:
(1) that it is likely to succeed on the merits,(2) that
it is likely to suffer irreparable harm in the absence of
preliminary relief, (3) that the balance of equities tips
in it favor, and (4) that an injunction is in the public
interest.
Real Truth About Obama, Inc. v. Fed. Election Comm’n, 575 F.3d 342,
346 (4th Cir. 2009), vacated on other grounds, 130 S.Ct. 2371.
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Mylan bears the burden of satisfying each of the four elements with
a “clear showing” that it is entitled to the extraordinary relief
it seeks.
B.
Id. at 346.
Administrative Procedure Act
Under the Administrative Procedure Act (the “APA”), the FDA’s
decisions are subject to judicial review and may only be overturned
if they are arbitrary and capricious.
5 U.S.C. § 706.
In
determining whether the FDA acted in excess of its statutory
authority in interpreting exclusivity rights for reissued patents,
the Court must undertake the two-step inquiry set out in Chevron
U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837
(1984).
Under Chevron Step One, courts must inquire whether “Congress
has directly spoken to the precise question at issue.” Id. at 842.
If so, the Court “must give effect to the unambiguously expressed
intent of Congress.” Id. at 843.
In deciding whether a statute is
ambiguous, courts must consider “the overall statutory scheme,
legislative
history,
the
history
of
evolving
congressional
regulation in the area, and...other relevant statutes.” Id. If
Congress has not directly addressed the precise question at issue,
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a court must proceed to Chevron Step Two, under which “the question
for the court is whether the agency’s answer is based on a
permissible construction of the statute.” Id.
In conducting an analysis under Chevron Step Two, a court
should defer to the agency’s permissible interpretation if the
agency has offered a reasoned explanation why it chose that
interpretation. Id. at 843.
A court ought not usurp an agency’s
interpretive authority by supplanting the agency’s construction
with its own, so long as the interpretation is not “arbitrary,
capricious, or manifestly contrary to the statute.”
United States
v. Shimer, 367 U.S. 374, 383 (1961).
V. Analysis:
A.
Jurisdiction
As a threshold matter, the Court must determine if it has
jurisdiction to review the letter decision of the FDA.
In order
for the Court to have jurisdiction in this case, there must be a
final agency action that is ripe for review. 5 U.S.C. § 704.
The
Supreme Court of the United States has instructed courts, upon
evaluating whether an agency decision is ripe for jurisdictional
purposes, to look at the fitness of the issues for judicial
consideration and “the hardship to the parties of withholding court
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consideration.” Nat’l Park Hospitality Ass’n v. Dep’t of Interior,
537 U.S. 803, 808 (2004).
In Teva Pharms. USA, Inc. v. Sebelius, 638 F.Supp.2d 42, 50
(D.D.C. 2009), the district court determined that an FDA letter
decision similar to the one at issue here was ripe for review.
The
court in Sebelius reasoned that “[w]hen the question at issue is
well-defined, and when withholding judicial consideration would
cause undeniable harm, as here, ripeness concerns pose no obstacle
to pre-enforcement review.”
Id. at 1311.
Further, the court
provided that a determination of the “fitness for review of the
legal issue presented” required an examination of “whether the
issue is purely legal, whether consideration of the issue would
benefit from a more concrete setting, and whether the agency’s
action is sufficiently final.”
Id. at 1308.
Fourth Circuit precedent is consistent with the ripeness
analysis in Sebelius.
In determining “whether a particular agency
action is final, [a court] must consider ‘whether the agency has
completed its decisionmaking process, and whether the result of
that process is one that will directly affect the parties.”
Chamblee v. Espy, 100 F.3d 15, 17 (4th Cir. 1996)(quoting Franklin
v. Massachusetts, 505 U.S. 788,797 (1992)). Further, courts should
review “the practical effect of the [agency’s] determination.” Id.
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Upon applying these factors to the case at hand, it is
apparent this matter is ripe for review.
First, the issues raised
by the parties are “undoubtedly purely legal in the relevant
sense.” Nat’l Park Hospitality Ass’n, 595 F.3d at 1308.
The Court
is being asked to determine a legal issue–when are statutory
exclusivity periods triggered in the case of reissued patents. The
positions of the parties here, similar to those of the parties in
Sebelius, “constitute bright-line rules, impervious, so far as
appears, to factual variation.” Id. at 1309.
Also, delay in a court decision would not “afford additional
‘concrete[ness]’” to the matter given that an FDA “about-face” on
the issue “seems extraordinarily unlikely.”
Id.
FDA’s April 24
letter decision states that it is a determination of the “legal and
regulatory scheme” governing exclusivity period for celecobix. FDA
Letter at 1.
Nowhere in that letter does the FDA indicate that it
may change its stance on the issue. Thus, it is safe to assume the
FDA’s May 30 celecoxib ANDA approval determinations will comport
with its April 24 letter decision.
Finally,
withholding
a
determination
in
this
case
would
adversely affect the parties and the public, as it would delay the
start of generic competition for Celebrex®–a drug that has been
sold exclusively by Pfizer for over 16 years.
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FDA’s letter decision interpreting the Hatch-Waxman Act in the
context of marketing exclusivity rights for reissued patents is
ripe for judicial review.
B.
Mylan’s Likelihood of Success on the Merits
i. Deference to the FDA
In order to obtain a preliminary injunction, Mylan must first
establish that it is likely to succeed on the merits of this case.
Real Truth About Obama, 575 F.3d at 346. Its probability of success
on the merits is informed by the deferential standard of review
under the APA. The FDA’s marketing exclusivity decision may be set
aside only if it is “arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).
Under the APA’s arbitrary and capricious standard of review,
an agency’s administrative decision is entitled to a presumption of
validity.
(1985).
Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 743
The reviewing court must consider whether the agency’s
decision was based upon consideration of the relevant factors, and
whether there has been a clear error of judgment. Citizens to
Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971). A court
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must uphold the agency’s action if it is “rational, based upon
consideration of the relevant factors and within the scope of
authority delegated to the agency by the statute.” Motor Vehicle
Mfrs. Ass’n of U.S., Inc., v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 42-43 (1983).
Moreover, in reviewing the FDA’s interpretation of the HatchWaxman Act, the Court is governed by the Chevron two step analysis.
467 U.S. at 842-43.
The first question under Chevron is whether
“Congress has directly spoken to the precise question at issue.”
Id. at 842.
If, however, the statute “is silent or ambiguous with
respect to the specific issue,” a court should proceed to the
second prong of Chevron, under which “the question...is whether the
agency’s answer is based on a permissible construction of the
statute.”
Id. at 843.
A court need not find that the agency’s
interpretation was the only one that could have been adopted;
rather, it must only find it was a permissible one.
Id.
ii. Chevron Step One
The parties disagree over whether Congress has addressed the
precise question at issue.
Mylan contends that the plain language
of the Hatch-Waxman Act’s court decision trigger clause, 21 U.S.C.
§ 355(j)(5)(B)(iv), governs the instant action.
The FDA, however,
argues that neither the court decision trigger clause nor the
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remainder of the Hatch-Waxman Act addresses exclusivity periods for
reissued patents, and consequently, it has the authority to provide
its own interpretation of the matter.
The FDA presents the
stronger argument.
According to Mylan, the court decision trigger clause clearly
provides that
an exclusivity period begins to run on ‘the date of a
decision of a court in [a relevant] action...holding the
patent which is the subject of the certification to be
invalid or not infringed.’ Applied to this case, the
exclusivity period began to run on the date of the
Court’s decision invalidating the ‘068 patent, which had
been the subject of certification by Teva.” (Dkt. No.
85). (quoting 21 U.S.C. § 355(j)(5)(B)(iv)).
The language of the court decision trigger clause, however, is far
from clear.
While no court has yet examined the precise question
presented here, in Apotex Inc. v. FDA, 414 F.Supp.2d 61, 69 (D.D.C.
2006), the district court concluded that 21 U.S.C. 355(j)(5)(B)(iv)
was
silent
as
to
how
many
exclusivity
connection with a single drug product.
periods
may
arise
in
In reaching its decision,
the court noted the ambiguity inherent in the court decision
trigger clause’s language, and the Hatch-Waxman Act’s treatment of
exclusivity periods in general.
Id.
It further stressed the
importance of deferring to the FDA’s reasonable interpretations in
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these situations, thereby enabling the agency to fill in the
statutory gaps left by Congress.
Id.
On appeal, the Court of Appeals for the District of Columbia
lauded the district judge’s “thoughtful decision.” It agreed that
the language of the court decision trigger clause is ambiguous in
its treatment of multiple exclusivity periods, and thus warranted
deference to the FDA’s interpretation.
Apotex, Inc. v. FDA, 226
F.App’x 4, 5 (D.C. Cir. 2006) (per curiam).
Similar to findings of the district court in Apotex, the Court
concludes that ambiguity exists here with respect to the court
decision trigger clause’s treatment of exclusivity periods for
reissued patents.
As an initial matter, the “court-decision
trigger language [] does not necessarily define what causes the
exclusivity entitlement to arise.” Apotex, 414 F.Supp.2d at 71.
Nor does anything in the court decision trigger clause of the
statute
foreclose
the
FDA’s
single
bundle
of
patent
rights
interpretation that, in the case of reissued patents, periods of
exclusivity do not arise until after a court decision issues on the
reissued patent.
In fact, the FDA’s interpretation avoids an
incongruity that would arise if a court decision on the original
patent
were
sufficient
to
trigger
20
(and
exhaust)
180-day
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exclusivity, but the patent at issue was still in effect in its
reissued form.
Of course, the Court acknowledges that there is also little to
suggest
that
Mylan’s
interpretation
of
the
matter–that
the
exclusivity period is triggered at the time a court decision issues
on the original patent–is inaccurate.
However, “the Court's
sentiments regarding which of the possible interpretations is the
better or more likely approach is irrelevant under the legal
calculus of Chevron step one.”
Id.
It is enough that the court
decision trigger clause is subject to more than one interpretation
as to the exclusivity rights of reissued patents for the Court to
conclude that the statute is ambiguous.
Id.
The Court also finds ambiguity as to whether the court
decision
trigger
clause
applies
to
patents, or only to original patents.
all,
including
reissued,
That clause speaks to “a
decision of a court” and “the patent which is subject of the
certification.”
21
U.S.C.
§
355(j)(5)(B)(iv)(emphasis
added).
Mylan contends this language applies to all, not just original,
patents. While the statutory rules of construction do provide that
words importing the singular, such as “a” and “the”, may also
include the plural, it is not always the case. 1 U.S.C. § 1.
In
fact, the ordinary understanding of the words “a” and “the” is that
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they refer to singular items.
At Step One of Chevron, the Court
“must assume ‘that the legislative purpose is expressed by the
ordinary meaning of the words used.’” Apotex, 414 F.Supp.2d at 70
(quoting Cal. Indep. Operator Sys. v. FERC, 372 F.3d 395, 400
(D.C.Cir. 2004). Thus, it appears that Congress was referring only
to original, and not all, patents when it drafted the court
decision trigger clause.
In addition to analyzing the plain language of the court
decision trigger clause itself, the Court must look to the broader
context of the relevant statutory scheme.
“In
determining
whether Congress has specifically addressed the question at issue,
a
reviewing
particular
court
should
statutory
not
confine
provision
in
itself
isolation.
to
examining
The
a
meaning–or
ambiguity–of certain words or phrases may only become evident when
placed in context.” FDA v. Brown & Williamson Tobacco Corp., 529
U.S. 133, 134 (2000).
Reissued patents, governed by 35 U.S.C. §§
251 and 252, are unique entities in patent law.
If a reissued
patent is granted, the original patent must be surrendered. 35
U.S.C.
§
251.
However,
35
U.S.C.
§
252
also
provides
for
continuity between “substantially identical” claims of the original
and reissued patents.
A patentee may recover for all infringement
which
the
happens
after
date
of
22
the
original
patent
if
the
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respective
“claims
of
the
original
and
reissued
patents
are
substantially identical.” 35 U.S.C. § 252.
If the reissued claims
are
original
not
substantially
identical
to
the
claims,
the
original claims are unenforceable and the patentee cannot recover
for any infringing activity prior to the date of reissue. Id.
Thus, the patent statutes specifically address the distinction
between “original patents” and “reissued patents”–making it clear
that sometimes they are contiguous and sometimes not–while the
Hatch-Waxman Act is silent on the issue, illustrating that Congress
left it for the FDA to decide how reissued patents affect generic
exclusivity rights.
Moreover,
“the
FDA’s
interpretation
of
21
U.S.C.
§
355(j)(5)(B)(iv) is clearly supported by its regulation, 21 C.F.R.
§ 314.107[...].”
2007).
Apotex Inc. v. FDA, 226 F.Appx. 4, 5(D.C. Cir.
In the context of ANDA applicants who submit multiple
Paragraph IV certifications, 21 C.F.R. § 314.107(b)(4) provides
that ANDA approval will become effective on the last applicable
certification date.
Similarly, as is the case here, FDA has
determined that when Paragraph IV certifications have been filed to
both a original and reissued patent, the later certification-the
reissued patent certification–is relevant in determining when
exclusivity rights have been triggered.
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The Hatch-Waxman Act therefore does not lend itself to the
interpretation urged here by Mylan, and “the text and reasonable
inferences from it [do not] give a clear answer against the FDA.”
Brown v. Gargner, 513 U.S. 114, 120, 115 S.Ct. 532, 130 L.Ed.2d 462
(1994).
Thus, the Court moves on to Chevron Step Two.
iii. Chevron Step Two
In Chevron Step Two, “the question for the court is whether
the agency’s answer is based on a permissible construction of the
statute.” Chevron, 467 U.S. at 842.
FDA
filled
the
gap
in
the
In its letter decision, the
Hatch-Waxman
Act’s
treatment
of
exclusivity for reissued patents by creating a “single bundle of
rights” for the original and reissued patent, and found that “a 30month stay of approval arising from litigation based on a paragraph
IV certification to the original patent remains in effect after
that patent is reissued (assuming the litigation giving rise to the
stay continues), and any applicant eligible for 180-day exclusivity
based on a paragraph IV certification to the original patent
remains eligible for that exclusivity after patent reissuance.”
FDA Letter at 1.
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The FDA reasoned that treating an original and reissued patent
as a “single bundle of patent rights” is consistent with both the
objectives
of
the
Hatch-Waxman
principles of patent law.
listed
in
applicants
the
to
Orange
submit
and
also
with
relevant
It concluded that “leaving a patent
Book
new
Act
despite
reissuance
certifications
to
and
requiring
reissued
patents
implements the incentive structure established by the Hatch-Waxman
[Act].” (Dkt. No. 52).
The
FDA’s
treatment
of
reissued
patents
for
exclusivity
purposes is consistent with the statutory treatment of reissued
patents generally, including the provision that allows a pending
cause of action based on an original patent to continue after
reissuance to the extent the claims of the original and reissued
patent are substantially identical.
See 35 U.S.C. § 252.
The
fact that the FDA could have reached the opposite conclusion does
not render the FDA’s interpretation unreasonable under the APA.
See Barnhart v. Walton, 535 U.S. 212, 222, 122 S.Ct. 1265, 152 L.E.
2d 330 (22).
Rather, as noted earlier, its interpretation need
only be permissible.
Mylan
argues
Chevron, 467 U.S. at 843-844.
that
FDA’s
interpretation
is
arbitrary
and
capricious because it treats first-filers on the original patent in
a manner that is different from first-filers on the reissued
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patent. The FDA’s decision, however, only addresses how the agency
will
determine
exclusivity
in
a
situation
involving
both
an
original and reissued patent, as well as court decisions on both
the original and reissued patents.
The FDA made no decision
regarding any particular applicants; the impact of the FDA’s
decision is dependent on whether and when each applicant filed
paragraph IV certifications.
Further, the cases on which Mylan relies to support its
proposition
capricious
held
manner
that
an
agency
it
treated
when
differently without explanation.
Shalala,
963
Administrative
F.
Supp.
Procedure
acted
in
an
similarly
arbitrary
situated
and
parties
See Bracco Diagnostics, Inc. v.
20,
28
Act,
the
(D.D.C.
FDA
1997)
either
(“Under
must
the
provide
a
rational basis for treating MBI’s imaging agent as a device while
simultaneously regulating essentially identical agents as drugs, or
it must treat all four of these similar products in the same
way.”); United States v. Diapulse Corp. of Am., 748 F.2d 56, 60 (2d
Cir. 1984) (court ruled against the FDA because the FDA “had not
explained how the differences between the two machines affected
their relative effectiveness as heat producing devices”).
Those cases are inapplicable here because the FDA provided a
well-reasoned explanation for its decision. See FDA Letter at 5-6,
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9-11.
As the agency stated, “[FDA] believe[s] that considering a
court decision on the original patent not to be a triggering event
in these cases is consistent with the statutory scheme, and is fair
to the ANDA applicants who first took on the risk of litigation by
certifying to the original patent.” Id. at 11.
Additionally, the FDA’s April 24 decision comports with its
decisions in three prior situations involving exclusivity and a
reissued patent. Id. at 6-8. In the case of Mircette, the FDA
determined that Barr Laboratories, Inc.’s (“Barr”) exclusivity was
triggered by a court decision finding the relevant reissued patent
not to be infringed.
Id. at 7.
The FDA did not award a separate
exclusivity period based on the first paragraph IV certification to
the original patent, in accordance with the FDA’s single bundle of
rights theory. Id. In Ultracet, Kali Laboratories, Inc., the first
applicant to submit a paragraph IV certification to an original
patent, was granted exclusivity and began marketing its product on
the day of approval. Id.
reissued.
Over a year later, the patent was
The FDA did not grant exclusivity to the first-filer on
the reissued patent because exclusivity had already been granted
based on the original patent, and the FDA believed that “the rights
to
180-day
exclusivity
for
a
reissued
patent
are
not
distinguishable from the rights to 180-day exclusivity on the
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original patent.”
Id. at 8.
Finally, in Adderall XR, Barr was the
first-filer on two original patents. Id. Reissued patents were
issued nearly a year after Barr launched an authorized generic. Id.
The FDA concluded that “Barr triggered its 180-day exclusivity on
the two original patents when it began marketing an authorized
generic, and the reissued patents were not treated as new and
distinct patents for purposes of giving rise to new periods of 180day exclusivity.” Id.
Thus, the FDA’s decision to treat an original and its reissued
patent as having a single bundle of rights is reasonable and allows
the agency to administer the Hatch-Waxman Act in a predictable
manner. This interpretation satisfies the APA’s arbitrary and
capricious standard of review, and is therefore permissible under
Chevron Step Two. Thus, Mylan is unlikely to succeed on the merits
of this case.
C.
Irreparable Harm to Mylan
Even assuming, arguendo, that Mylan is likely to succeed on
the merits of this case, it must still satisfy the remaining
elements necessary to obtain a preliminary injunction.
prong
of
establish
the
that
preliminary
it
is
injunction
likely
to
28
test
suffer
The second
requires
irreparable
Mylan
to
harm
if
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injunctive relief is not granted. Real Truth About Obama, 575 F.3d
at 346.
The irreparable harm must be actual and imminent, not
remote and speculative.
Direx Israel, Ltd. v. Breakthrough
Medical Corp., 952 F.2d 802 (4th Cir. 1991). As the Fourth Circuit
noted in Direx Israel:
The hardship balance and the likelihood of success
determination are separate, sequential steps in the
application of the hardship test. [Blackwelder Furniture
Co. of Statesville, Inc. v. Seilig Mfg. Co., 550 F.2d 189
(4th Cir.1977)] makes it plain that the balancing of
hardship should proceed any consideration of the
likelihood of success . . . . And the reason for this
statement is easy to understand. The hardship test, by
its very nature, is to proceed the consideration of the
likelihood of success, since the outcome of the hardship
test fixes the degree of proof required for establishing
the likelihood of success by the plaintiff. If the
hardship balance tilts sharply and clearly in the
plaintiff's favor, the required proof of likelihood of
success is substantively reduced. Similarly, if the
hardship to plaintiff is minimal or nonexistent . . .
then the burden on the plaintiff to establish likelihood
of success on the merits becomes considerably greater.
The likelihood of success determination is to proceed
only after the hardship balance itself had been resolved.
It is obvious error to resolve the hardship test by
including it in the likelihood-of-success test.
Id. at 817.
Mylan contends that it will lose “millions of dollars in lost
profits”
if
it
is
not
one
of
the
first
generic
manufacturers to go to the market. (Dkt. No. 22).
celecoxib
Yet, “purely
economic injury and economic loss alone, however substantial, does
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not constitute irreparable harm.” Mylan Pharmaceuticals, Inc. v.
Thompson, 207 F.Supp.2d 476, 285 (N.D.WVa. 2001). For this reason,
several courts have held that the financial harm to one generic
manufacturer resulting from the FDA’s award of exclusivity to
another manufacturer is not irreparable. Mylan Pharms. Inc. v.
Sebelius, 856 F.Supp.2d 196 (D.D.C. 2012); Sandoz Inc. v. FDA, 439
F.Supp.2d 26, 32(D.D.C. 2006) (loss of $11 million in sales over
180 days was not considered to be irreparable harm); Apotex, Inc.
v. FDA, 2006 WL 1030151 at *16-17 (D.D.C. 2006)(loss of 1.4 percent
of the company’s revenue was not considered irreparable harm).
Accordingly, Mylan has failed to satisfy its burden of establishing
that it would suffer irreparable harm by not receiving preliminary
injunctive relief.
D.
Balance of Equities/Hardship
Mylan also must establish that the balance of equities tips in
its favor.
Real Truth About Obama, 575 F.3d at 346.
Here, Mylan
contends that, if injunctive relief is not granted and it is
therefore denied shared celecoxib marketing exclusivity rights, it
will suffer severe financial harm in the form of “tens of millions
of dollars” in lost profits. (Dkt. No. 22).
Any financial harm that Mylan would incur in the absence of a
preliminary
injunction,
however,
30
will
be
matched,
and
likely
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exceeded, by the financial harm that Teva, the first-filer on the
original patent, would suffer due to being deprived of its right to
sole 180-day marketing exclusivity.
Here, Teva claims that if it
is forced to share marketing exclusivity rights, it will lose an
estimated four times the amount that Mylan contends it stands to
lose if a preliminary injunction is not granted. (Dkt. No. 71).
Hence, the parties allege similar economic injuries. However,
“if ‘the plight of the defendant is not substantially different
from that of the plaintiff’, [then] there [can be] no imbalance of
hardship found in favor of the plaintiff.”
Mylan, 207 F.Supp. 2d
at 485 (quoting, Direx Israel, 952 F.2d at 808).
Thus, Mylan has
failed to establish that the balance of equities tips in its favor.
E.
The Public Interest
Finally, Mylan must establish that an injunction is in the
public interest.
Real Truth About Obama, 575 F.3d at 346.
Mylan
contends that by granting an injunction and opening up the generic
market to multiple first-filers, the public will be served by
robust generic competition for celcoxib. (Dkt. No. 22).
However, Congress has explicitly concluded that the public
interest
is
best
served
by
providing
180
days
of
complete
exclusivity as a “reward for generics that stick out their necks at
the cost of a patent infringement suit,” Teva Pharms. USA, Inc. v.
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Sebelius, 595 F.3d 1303, 1318 (D.C. Cir. 2010), because it is those
companies that strive to “get generic drugs into the hands of
patients at reasonable prices–fast.” Andrx Pharms., Inc. v. Biovail
Corp. Int’l, 256 F.3d 799, 809 (D.C. Cir. 2001).
situation fits squarely within that proposition.
The present
Teva was the
first and only party to file challenges both to the ‘068 patent and
its reissue.
Requiring a true first filer to share exclusivity upon reissue
is not necessarily in the public’s best interest.
Such a result
discourages generic challenges to brand drugs over the long term,
which will ultimately increase drug prices.
The statute’s grant of a 180–day delay in multiple
generic competition for the first successful paragraph IV
filer is a pro-consumer device. And it happens to be
precisely the device Congress has chosen to induce
challenges to patents claimed to support brand drugs. The
statute thus deliberately sacrifices the benefits of full
generic competition at the first chance allowed by the
brand manufacturer's patents, in favor of the benefits of
earlier generic competition, brought about by the promise
of a reward for generics that stick out their necks (at
the potential cost of a patent infringement suit) by
claiming that patent law does not extend the brand
maker's monopoly as long as the brand maker has asserted.
Teva, 595 F.3d at 1318.
Thus, Mylan is incorrect in assuming that granting shared
exclusivity in this instance will bring more generic competition
into the market for celecoxib sooner.
32
To the contrary, given that
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“Congress deliberately created the 180-day exclusivity bonus,” a
litigant “cannot justify its [position] by proudly proclaiming that
[the relief it seeks will] eviscerate[] that bonus.” Id.
VI.
Conclusion
In conclusion, Mylan has failed to establish the elements
necessary to obtain a preliminary injunction.
The Court therefore
DENIES Mylan’s motion for preliminary injunction. (Dkt. No. 9).
It is so ORDERED.
The Court directs the Clerk to transmit copies of this
Memorandum Opinion and Order to counsel of record.
DATED: May 29, 2014.
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE
33
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