Novartis Pharmaceuticals Corp. v. Leavitt

• Decision Date: 27 January 2006
• Docket Number: No. 04-5414.,04-5414.
• Citation: 435 F.3d 344
• Parties: NOVARTIS PHARMACEUTICALS CORPORATION, Appellant v. Michael O. LEAVITT, Secretary of Health and Human Services, and Lester M. Crawford, Jr., Acting Commissioner of Food and Drugs, Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

435 F.3d 344

NOVARTIS PHARMACEUTICALS CORPORATION, Appellant v. Michael O. LEAVITT, Secretary of Health and Human Services, and Lester M. Crawford, Jr., Acting Commissioner of Food and Drugs, Appellees.

No. 04-5414.

United States Court of Appeals, District of Columbia Circuit.

Argued October 24, 2005.

Decided January 27, 2006.

Appeal from the United States District Court for the District of Columbia (No. 99cv00323).

John M. Engel III argued the cause and filed the briefs for appellant.

Drake Cutini, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief were Peter D. Keisler, Assistant Attorney General, Eugene M. Thirolf, Jr., Director, Alex M. Azar II, General Counsel, U.S. Department of Health and Human Services, Eric M. Blumberg, Deputy Chief Counsel, and Karen E. Schifter, Associate Chief Counsel.

Before: TATEL and GRIFFITH, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

STEPHEN F. WILLIAMS, Senior Circuit Judge.

Securing FDA approval for a generic drug is generally a much simpler and faster process than securing approval for a "pioneer" drug. Instead of directly demonstrating the drug's safety and efficacy, see 21 U.S.C. § 355(a), manufacturers of the generic file an abbreviated new drug application ("ANDA") that need show only that the generic is the same as the pioneer drug along certain dimensions. See § 355(j)(2)(A)(i)-(viii). This case concerns FDA's decision to change the dosage forms, labeling, and established names associated with appellant Novartis's pioneer drug in ways that would ease the path for competing generic drugs. Novartis raises a number of procedural and substantive challenges to FDA's changes. The district court rejected all and we affirm.

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The fastest route to FDA approval requires an ANDA to demonstrate not only that a generic drug has the same active ingredient(s) as the pioneer drug and is bioequivalent to it, i.e., roughly speaking, is absorbed at the same rate and to the same extent when administered under similar conditions, but also that the generic and pioneer drugs have the same dosage form and labeling. 21 U.S.C. § 355(j)(2)(A)(ii)-(v). The latter two requirements are at issue in this case.

"Dosage forms" are categories that relate to such matters as a drug's appearance, physical form, and method of administration. The FDA assigns each drug a dosage form; currently there are 77 such categories. See FDA, APPROVED DRUG PRODUCTS WITH THERAPEUTIC EQUIVALENCE EVALUATIONS Appx. C (25th ed.2005). Some of the dosage forms are quite broad (for example, "elixir" or "tablet, chewable"), while others are relatively narrow (for example, "injectable, lipid complex"). Id. If a generic manufacturer cannot show that its drug has the same dosage form as the pioneer drug, it can still obtain FDA approval, but the process is more arduous: the manufacturer may use an abbreviated application only if it first files a "suitability petition" and the FDA grants it permission to file an ANDA. 21 U.S.C. § 355(j)(2)(C); 21 C.F.R. § 314.93. Even if the drug is ultimately approved, the difference in dosage form will preclude the generic from being designated therapeutically equivalent to the pioneer drug, and will thus disqualify the generic from being considered automatically substitutable for the pioneer drug under various state pharmacy laws. See Warner-Lambert v. Shalala, 202 F.3d 326, 327-28 (D.C.Cir.2000).

To avoid charges of misbranding, the labels of prescription drugs must include certain pieces of information displayed in a particular way. See 21 U.S.C. § 352. Thus the requirement that a generic have the same labeling as the pioneer drug incorporates several additional requirements, two of which are relevant to this case.¹ First, FDA requires the labels to contain the pioneer drug's dosage form, see 21 C.F.R. § 201.57(a)(1)(ii), so the same-label requirement reincorporates the requirement that the generic drug share the pioneer drug's dosage form. Second, the FDA requires prescription drug labels to include the drug's established name, see 21 C.F.R. § 201.57(a)(1)(i), which is a nonproprietary name assigned to the drug by the FDA. The rule mandating inclusion of the established nonproprietary name on the label means that a generic drug must have the same nonproprietary name as the pioneer drug for the FDA to approve the generic drug through the ANDA process. We turn later to the statutory framework for assigning such names.

Novartis markets cyclosporine drug products that are widely prescribed to prevent organ rejection in kidney, liver, and heart transplants. (These drugs were developed by Novartis's predecessor, Sandoz Corp. For simplicity, we refer to both corporations as Novartis.) It markets two types of cyclosporine drugs under the proprietary names Sandimmune and Neoral. Both are available as capsules and as solutions, and both form emulsions when they come into contact with aqueous liquids. The difference is the size of the droplets in which the active ingredient is dispersed. Sandimmune forms a macroemulsion and disperses cyclosporine in larger droplets than does Neoral, which forms a microemulsion. The smaller size of the droplets in the microemulsion allows Neoral's active ingredient—cyclosporine—to be absorbed more quickly and efficiently in the gastrointestinal tract. See FDA Docket No. 96-P-0459, Response to Petition Filed by Novartis Pharmaceuticals Corp., at 4 (Nov. 2, 1998) ("Petition Response"). This difference means that the Sandimmune and Neoral products are not bioequivalent (i.e., they are bioinequivalent) and that a physician's decision to switch a patient from one to the other may require a different prescription.

To highlight the differences between Sandimmune and Neoral, the FDA initially incorporated the term "microemulsion" into both Neoral's established name and its dosage form. When the FDA approved the Neoral products in 1995, it assigned them the established names "cyclosporine oral solution for microemulsion" and "cyclosporine capsules for microemulsion." Petition Response at 5; see also Joint Appendix 966-67. Shortly thereafter, the FDA created two new dosage forms and assigned them to the Neoral products: "capsule, microemulsion" and "solution, microemulsion."

At a symposium in December 1997 a leading transplant physician made a presentation about the development of a generic version of Neoral that formed a microdispersion of solid particles instead of a microemulsion. Alarmed, Novartis filed a citizen petition in March 1998 requesting that the FDA not approve any generic with a dosage form that was not identical to Neoral's, or at least that it require an applicant seeking approval of such a drug to first file a suitability petition. (Novartis had previously filed another citizen petition, which the FDA denied in the same response as it denied the March 1998 petition; Novartis hasn't appealed denial of the first petition.) In principle the petition was simply a request that the FDA obey the law, though it could be taken as implicitly urging the FDA not to delete "microemulsion" from the dosage forms assigned to the Neoral products. In fact the FDA did just what Novartis sought to avoid.

Responding to the petition in November 1998, the FDA announced that it would eliminate the microemulsion dosage forms altogether. It explained that it had determined that Neoral's ability to form a microemulsion was not a function of dosage form; rather than being an aspect of the "physical recognition, appearance, dosing and manner of administration," the microemulsion-forming feature of Neoral appeared only after the patient swallowed the product (or, in the case of the oral solution, mixed it with another beverage to make it more palatable) and was therefore a characteristic of the product's "formulation." Petition Response at 12-13 & n. 14. There is no requirement that a generic drug have the same formulation as its pioneer. Moreover, the FDA said, elimination of the microemulsion dosage form would serve its policy goal of encouraging the availability of generic products. Id. at 14. Finally, it said that in light of its dosage form ruling it had reexamined the Neoral products' established names and determined that they should no longer refer to microemulsion. The new established names would be simply "cyclosporine capsules" and "cyclosporine oral solution." These names would apply to Sandimmune, to Neoral, and to any approved generic versions of Neoral that formed either microemulsions or microdispersions. To communicate the differences between Sandimmune on the one hand and Neoral and generic equivalents that form either microemulsions or microdispersions on the other, FDA said it would now require the label for Neoral and its generic equivalents to include the term "MODIFIED." Petition Response at 17. This term, explained the FDA, "is appropriate to alert physicians, pharmacists, and patients that Neoral's formulation presents a different bioavailability profile than the Sandimmune formulation," and "is broad enough to encompass different, bioequivalent formulations of cyclosporine (e.g., a microemulsion or microdispersion) and, prominently displayed in bold type, the term may become readily associated with the more bioavailable formulations of cyclosporine." Id.

The FDA issued this decision around the time that it approved an ANDA for SangCya, a generic cyclosporine solution manufactured by SangStat Medical Corp. SangStat had submitted data purporting to show that SangCya was bioequivalent to Neoral. SangCya differed from Neoral in precisely the way that Novartis had anticipated a generic competitor might: it formed a microdispersion of solid particles instead of a microemulsion. Had the Neoral products' dosage forms, labeling, and established names continued to refer to microemulsion, SangStat would not have been able to secure FDA approval for SangCya by directly filing an ANDA.

A few months...