Aaipharma Inc. v. Thompson, 01-2113.

Citation296 F.3d 227
Decision Date10 July 2002
Docket NumberNo. 01-2113.,01-2113.
PartiesAAIPHARMA INCORPORATED, Plaintiff-Appellant, v. Tommy G. THOMPSON, Secretary of Health and Human Services; Bernard Schwetz, DVM, Ph.D., Acting Commissioner of the United States Food and Drug Administration; United States Food and Drug Administration, Defendants-Appellees, Barr Laboratories, Incorporated; Pharmaceutical, Incorporated, Intervenors.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

James C. Burling, Hale & Dorr, L.L.P., Washington, D.C., for Appellant. Howard Stanley Scher, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C., for Appellees.

ON BRIEF:

Mark A. Heller, Hale & Dorr, L.L.P., Washington, D.C.; James D. Myers, Richard P. Vitek, Myers, Bigel, Sibley & Sajovec, P.A., Cary, North Carolina, for Appellant. Robert D. McCallum, Jr., Assistant Attorney General, Douglas N. Letter, Appellate Staff, Civil Division, United States Department of Justice, Washington, D.C.; Daniel E. Troy, Chief, Eric M. Blumberg, Deputy Chief for Litigation, Michael N. Druckman, Associate Chief for Enforcement, United States Food and Drug Administration, Rockville, Maryland, for Appellees. Dan Hartzog, Gregory Brown, Cranfill, Sumner & Hartzog, L.L.P., Raleigh, North Carolina; George C. Lombardi, Christine J. Siwik, James F. Hurst, Winston & Strawn, Chicago, Illinois; Robert W. Spearman, Parker, Poe, Adams & Bernstein, L.L.P., Raleigh, North Carolina; Edgar H. Haug, Daniel G. Brown, Frommer, Lawrence & Haug, L.L.P., New York, New York, for Intervenors.

Before MICHAEL, Circuit Judge, JACKSON, United States District Judge for the Eastern District of Virginia, sitting by designation, and FRIEDMAN, United States District Judge for the Eastern District of Virginia, sitting by designation.

Affirmed by published opinion. Judge MICHAEL wrote the opinion, in which Judge JACKSON and Judge FRIEDMAN joined.

OPINION

MICHAEL, Circuit Judge.

The Federal Food, Drug, and Cosmetic Act (FFDCA) requires the manufacturer of a brand name drug approved by the Food and Drug Administration (FDA) to provide the FDA with a listing of all patents that claim the approved drug or a method of using the drug. See 21 U.S.C. § 355(b)(1), (c)(2). The FDA publishes these listings in its Approved Drug Products With Therapeutic Equivalence Evaluations, a publication commonly known as the Orange Book. The plaintiff, aaiPharma Inc., has sued the FDA, contending that the agency has a duty to ensure the accuracy of Orange Book listings and that the agency's refusal to do so violates the Administrative Procedure Act (APA). The district court rejected aaiPharma's APA challenge, concluding that the FFDCA assigns the FDA a purely ministerial role regarding Orange Book listings. We affirm.

I.

Orange Book listings play an important role in the statutory and regulatory framework created by the Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, 98 Stat. 1585 (codified at 21 U.S.C. §§ 355, 360cc and 35 U.S.C. §§ 156, 271, 282), commonly known as the Hatch-Waxman Act (Hatch-Waxman or the Act). Hatch-Waxman amended both the FFDCA and the patent laws in an effort to strike a balance between "two conflicting policy objectives: to induce name-brand pharmaceutical firms to make the investments necessary to research and develop new drug products, while simultaneously enabling competitors to bring cheaper, generic copies of those drugs to market." Abbott Labs. v. Young, 920 F.2d 984, 991 (D.C.Cir.1990) (Edwards, J., dissenting on other grounds).

Prior to Hatch-Waxman's passage in 1984, both pioneer (brand name) and generic drug manufacturers who wished to bring a drug to market were required to file a New Drug Application (NDA) with the FDA. This requirement posed a formidable barrier to market entry for generic drug companies because preparation of an NDA requires expensive clinical studies demonstrating the proposed drug's safety and effectiveness. In addition, a generic manufacturer could not begin the necessary research and clinical studies until any patents on the brand name drug it sought to copy had expired because its research efforts would have infringed the patents held by the pioneer drug company. This meant that a pioneer drug company's monopoly on its brand name drug was effectively extended to include not only the terms of any patents on the brand name drug, but also the time it took generic competitors to complete the NDA process after these patents had expired. Hatch-Waxman addressed these problems by creating a streamlined procedure for FDA approval of generic drugs. A drug company that wishes to market a generic version of a brand name drug may now submit an Abbreviated New Drug Application (ANDA) to the FDA. See 21 U.S.C. § 355(j). By filing an ANDA, a generic manufacturer can rely on the clinical studies performed by the pioneer drug manufacturer and is not required to prove the safety and effectiveness of its generic drug from scratch. Instead, the generic manufacturer must prove only that its drug is bioequivalent to the brand name drug it wants to copy. See id. § 355(j)(2)(A). In addition, Hatch-Waxman amended the patent laws so that a generic drug manufacturer no longer infringes the patents on a brand name drug by performing acts necessary to prepare an ANDA. See 35 U.S.C. § 271(e)(1).

Hatch-Waxman also contains a complex set of provisions designed to protect the intellectual property rights of pioneer drug companies and others holding patents on brand name drugs. The Act requires each drug company filing an NDA to include in its application a list of all the patents that "claim[ ] the drug for which the applicant submitted the application or which claim[ ] 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). If the FDA approves the application, the agency is required to publish this list in the Orange Book.1 An NDA applicant must also amend its application to include information about any new patents claiming its drug that issue while the NDA is pending. Id. In addition, the holder of an approved NDA is required to submit to the FDA for Orange Book listing any new patents that claim the approved drug within thirty days of their issuance. Id. § 355(c)(2). With respect to each patent listed in the Orange Book for a pioneer drug, an ANDA applicant seeking to copy that drug must make one of the following four certifications in its initial application for FDA approval: (I) that no patent information for the pioneer drug has been submitted to the FDA (a "paragraph I certification"), (II) that the patent has expired (a "paragraph II certification"), (III) that the patent will expire on a specific date (a "paragraph III certification"), or (IV) that the patent "is invalid or will not be infringed by the manufacture, use, or sale of the new drug" for which the ANDA applicant seeks approval (a "paragraph IV certification"). Id. § 355(j)(2)(A)(vii)(I)-(IV). An ANDA applicant must also make an additional certification as to any new patent listed in the Orange Book while its application is pending, so long as the NDA holder submits the new patent to the FDA for listing no more than thirty days after the patent's issuance. 21 C.F.R. § 314.94(a)(12)(vi). The certification made by the ANDA applicant determines the date on which FDA approval of the application can become effective. ANDAs containing paragraph I or II certifications may be approved immediately if the FDA finds that all the relevant scientific and regulatory requirements have been met. 21 U.S.C. § 355(j)(5)(B)(i). An ANDA that contains a paragraph III certification becomes effective on the patent's expiration date, assuming that other FDA requirements have been satisfied. Id. § 355(j)(5)(B)(ii). Thus, certifications under paragraphs I, II, and III tell the FDA that it need not worry about the patent law implications of the generic drug because the drug will not enter the market until any relevant patents have expired. In contrast, an ANDA applicant making a paragraph IV certification intends to market its product before the relevant patents have expired. The effective date for an ANDA containing a paragraph IV certification is determined by the outcome of the following sequence of events.

An ANDA applicant making a paragraph IV certification with respect to a patent must give notice of this certification to both the NDA holder and the patent holder (often, but not always, these will be the same party) and must explain in detail why it believes that the patent is invalid or will not be infringed by the generic drug for which it seeks approval. Id. § 355(j)(2)(B). Hatch-Waxman provides that the act of filing a paragraph IV certification with respect to a patent creates a cause of action for patent infringement in the patent holder. See 35 U.S.C. § 271(e)(2)(A) ("It shall be an act of infringement to submit ... [an ANDA] ... if the purpose of such submission is to obtain [FDA] approval ... to engage in the commercial manufacture, use, or sale of a drug ... claimed in a patent ... before the expiration of such patent."). Once the patent holder receives notice of the certification, it has forty-five days in which to file a suit for patent infringement. Failure to file within this forty-five day period means that the FDA may approve the ANDA without delay. 21 U.S.C. § 355(j)(5)(B)(iii). But if the patent holder files suit, FDA approval of the ANDA is automatically stayed for up to thirty months.2 Together, these provisions protect the holder of a patent that claims a brand name drug by giving the patent holder a chance to vindicate its intellectual property rights before the FDA approves a generic version of the drug. See Bristol-Myers Squibb Co....

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