Teva Pharmaceuticals v. US. Food & Drug Admin.
Citation | 51 USPQ2d 1432,182 F.3d 1003 |
Decision Date | 20 July 1999 |
Docket Number | No. 99-5022,No. 99-5027,99-5022,99-5027 |
Parties | (D.C. Cir. 1999) Teva Pharmaceuticals, USA, Inc.,Appellant v. United States Food and Drug Administration, et al.,Appellees Consolidated with |
Court | United States Courts of Appeals. United States Court of Appeals (District of Columbia) |
Appeals from the United States District Court for the District of Columbia(No. 99cv00067)
Geoffrey M. Levitt and James N. Czaban argued the cause for appellant. With them on the briefs was David M. Malone.
Robert A. Dormer, James R. Phelps and Douglas B. Farquhar were on the brief for appellant Purepac Pharmaceutical Company.
Andrew E. Clark, Attorney, U.S. Department of Justice, argued the cause for the federal appellees. With him on the brief were David W. Ogden, Acting Assistant Attorney General, Eugene Thirolf, Jr., Director, Office of Consumer Litigation, and Drake S. Cutini, Attorney.
James D. Miller argued the cause for intervenors-appellees TorPharm, a Division of Apotex, Inc., et al. With him on the brief were Eugene M. Pfeifer, Peter M. Todaro, Donald O. Beers and David E. Korn.
Before: Edwards, Chief Judge, Rogers, Circuit Judge and Buckley, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Rogers.
Teva Pharmaceuticals and Purepac Pharmaceutical Company appeal the denial of injunctive relief requiring the Food and Drug Administration ("FDA") to recognize the dismissal of a declaratory judgment complaint for patent infringement as a "court decision" under the Abbreviated New Drug Application ("ANDA") statute. See 21 U.S.C. § 355(j)(5)(B)(iv)(II) (Supp. III 1997). Appellants are "subsequent" ANDA applicants hoping to market ticlopidine tablets, a generic version of the name-brand drug "Ticlid," used to treat stroke victims.1 To meet the requirements of the ANDA statute, Teva sued the patent holder2 in the Central District of California in order to obtain a "court decision" that would start, or trigger, a 180-day period of market exclusivity for the first ANDA applicant, and thereafter allow appellants to market their generic drug. The California court dismissed the complaint for lack of subject matter jurisdiction after finding, based on the patent holder's admission of non-infringement, that Teva lacked a reasonable apprehension of suit by the patent holder. The FDA never the less refused to recognize the dismissal as a triggering "court decision" under the ANDA statute. Because we conclude that the FDA's refusal was arbitrary and capricious inasmuch as the FDA has taken an inconsistent position in another case and failed to explain adequately the inconsistency, we reverse and remand the case to the district court to determine anew whether injunctive relief is appropriate.
The statutory background is succinctly summarized as follows. In 1984, Congress amended the Food and Drug Act in order to expedite the approval of generic versions of namebrand drugs that already have FDA approval, thus making available more low-cost generic drugs. See Drug Price Competition & Patent Term Restoration Act of 1984, Pub. L. No. 98-417, tit. I, 98 Stat. 1585 (1984) ( ); see also H.R. Rep. No. 98-857, pt. 1, at 14 (1984), reprinted in 1984 U.S.C.C.A.N. 2647, 2647. Under the so-called Hatch-Waxman amendments, an abbreviated new drug application process allows applicants, upon meeting certain requirements, to proceed more quickly to the marketplace. The ANDA applicant must show that: (i) the use of the drug has been previously approved; (ii) the new drug contains the same active ingredient(s) as the previously approved drug, or document the differences; (iii) the new drug has the same route of administration, dosage form, and strength of the previously approved drug, or document the differences; (iv) the new drug is the bioequivalent or has the same therapeutic effect as the previously approved drug; (v) the new drug has the same labeling as the previously approved drug, or the differences are approved; and (vi) it has complied with other statutory requirements, which include providing a full list of articles used as components, a full statement of composition, samples of the drug, labeling specimens, and a description of manufacturing, processing, and packaging. See 21 U.S.C. § 355(j)(2).
To avoid the patent infringement problems inherent in such a statutory scheme, the ANDA applicant must provide the FDA with a certificate establishing that the marketing of the generic drug will not infringe the patent for the listed drug.To this end, the applicant must certify that: (I) the patent information has not been filed, (II) the patent has expired, (III) the patent will expire on a specified date, or (IV) the "patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted." Id. § 355(j)(2)(A)(vii). As part of a certification under Paragraph IV, the ANDA applicant must notify the patent holder and approved applicants of its application and include a statement of the factual and legal basis for the applicant's opinion that the patent is not valid or will not be infringed. See id. § 355(j)(2)(B). Under FDA regulations, the applicant may also certify that the patent is unenforceable. See 21 C.F.R. § 314.94(a)(12)(i)(A)(4) (Westlaw 1999).
ANDA applicants who submit Paragraph IV certifications are subject to a "market-exclusivity provision," see 21 U.S.C. § 355(j)(5)(B)(iv), under which previous applicants are granted 180 days during which subsequent applications cannot be approved.3 This period is started, or triggered, by the earlier of (1) the date the Secretary of Health and Human Services receives notification from the previous applicant of the first commercial marketing of its drug or (2) the date of a "decision of a court" in a patent or declaratory judgment action "holding" that the patent is either "invalid or not infringed."Id.; see also id. § 355(j)(5)(B)(iii) ( ).
Heretofore, the court invalidated the FDA's "successful defense" requirement, whereby the first ANDA applicant could obtain 180 days of market exclusivity only after successfully defending a patent lawsuit. See Mova Pharm. Corp. v. Shalala, 140 F.3d 1060, 1076 (D.C. Cir. 1998). Accord Granutec, Inc. v. Shalala, No. 97-1873, 1998 WL 153410, at *7 (4th Cir. April 3, 1998). In response, the FDA issued a "Guidance for Industry" announcing its intention to promulgate new regulations on market exclusivity and "until such time as the rulemaking process is complete," to "regulate directly from the statute, and ... make decisions on 180-day generic drug exclusivity on a case-by-case basis." See Guidance for Industry: 180-Day Generic Drug Exclusivity Under the Hatch-Waxman Amendments to the Federal Food, Drug and Cosmetic Act 4 (June 1998) ("Guidance for Industry").The court upheld this approach in Purepac Pharmaceutical Co. v. Friedman, 162 F.3d 1201, 1204-05 (D.C. Cir. 1998): the FDA may regulate directly from the statute and is not required to maintain any litigation requirement in determining the first applicant's entitlement to 180 days of market exclusivity.
Teva challenges the denial of injunctive relief on the principal ground that the FDA's refusal to treat the dismissal of Teva's declaratory judgment action as a triggering "court decision" is inconsistent with the ANDA statute and hence, the district court erred in ruling that Teva had failed to demonstrate a likelihood of success on the merits. Basically, Teva contends that the California dismissal is functionally equivalent to a final decision of noninfringement and unenforceability on the merits because it was based on the patent holder's express representation to Teva and the California court that Teva's formulation did not infringe the patent and that the patent holder would not sue Teva for infringement. Indeed, Teva goes so far as to maintain that its interpretation of the statute is the only possible alternative to the FDA's impermissible construction under the circumstances of this case; otherwise, subsequent ANDA applicants' efforts to use the Hatch-Waxman procedure could be thwarted anytime a patent holder stated that it did not intend to enforce its patent, thus preventing the courts from exercising subject matter jurisdiction to issue the holding of noninfringement that the FDA's position requires.
According to Teva's complaint, on June 20, 1997, Teva filed its ANDA to market ticlopidine, a generic version of the drug "Ticlid." While it awaited tentative approval of its application, Teva sued Syntex, seeking a declaratory judgment of noninfringement of Syntex's patent for a finished dosage formulation of ticlopidine tablets.4 On the same day, Syntex sent Teva a letter expressing the opinion that Teva would not infringe Syntex's patent, declaring: "We will make no claim of patent infringement based on the sale of ticlopidine hydrochloride tablets having the formulation you have disclosed to us." Thereafter, Teva prepared a joint motion for entry of consent judgment that would hold Syntex's patent not infringed; but Syntex instead moved to dismiss the complaint for lack of subject-matter jurisdiction, explaining:
Given Syntex's express assurance that it would not bring suit against Teva on the '592 patent, Teva can have no reasonable apprehension that it will face a lawsuit for infringement of the '592 patent. Without such reason-able apprehension, no actual case or controversy exists of sufficient immediacy or reality to base jurisdiction over Teva's declaratory judgment claim.
Accompanying the motion was a declaration by John Parise, counsel for Syntex, referring to the June 8, 1998, letter that Syntex sent Teva stating that Syntex would make no claim of patent infringement against Teva. Noting that under Federal Rule Civil Procedure 12(b)(1...
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