Teva Pharmaceuticals, Usa, Inc. v. Leavitt

• Decision Date: 07 November 2008
• Docket Number: No. 08-5141.,08-5141.
• Citation: 548 F.3d 103
• Parties: TEVA PHARMACEUTICALS, USA, INC., Appellee v. Michael O. LEAVITT, In His Official Capacity as Secretary of Health and Human Services, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

548 F.3d 103

TEVA PHARMACEUTICALS, USA, INC., Appellee v. Michael O. LEAVITT, In His Official Capacity as Secretary of Health and Human Services, et al., Appellants.

No. 08-5141.

United States Court of Appeals, District of Columbia Circuit.

Argued September 12, 2008.

Decided November 7, 2008.

Appeal from the United States District Court for the District of Columbia, (No. 1:08cv00395).

Gerald F. Masoudi, Associate General Counsel, U.S. Department of Health and Human Services, argued the cause for appellants. With him on the briefs were Gregory G. Katsas, Acting Assistant Attorney General, U.S. Department of Justice, C. Frederick Beckner III, Deputy Assistant Attorney General, Eugene M. Thirolf, Director, Drake Cutini, Attorney, and Eric M. Blumberg, Deputy Chief Counsel, U.S. Department of Health and Human Services.

Jay P. Lefkowitz argued the cause for appellee. With him on the brief were Michael D. Shumsky and Gregory L. Skidmore.

Before: BROWN and KAVANAUGH, Circuit Judges, and WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge BROWN, in which Circuit Judge KAVANAUGH joins.

Opinion concurring in the judgment filed by Senior Circuit Judge WILLIAMS.

BROWN, Circuit Judge:

The Hatch-Waxman Amendments help to expedite the marketing of generic drugs. Drug Price Competition and Patent Term Restoration Act of 1984, Pub.L. No. 98-417, § 101, 98 Stat. 1585, 1585 (1984). Getting a new "branded" drug to market is a time-consuming process. The manufacturer must file a New Drug Application (NDA) with the Food and Drug Administration (FDA), showing the new drug is safe and effective and identifying the number and expiration date of any patent or patents applicable to the drug. 21 U.S.C. §§ 355(a), (b). FDA has to publish this information. Id. § 355(b)(1). It meets this obligation by publishing a directory of Approved Drug Products with Therapeutic Equivalence Evaluations (also known as the Orange Book), a printed cumulative supplement to the Orange Book, and an electronic version of the Orange Book.

A manufacturer preparing to market a generic bioequivalent of a branded drug can take a short-cut: filing an Abbreviated New Drug Application (ANDA) that piggybacks on the original manufacturer's evidence of safety and efficacy. Id. § 355(j). To start the process, the ANDA applicant must certify—for each patent claiming a drug for which the applicant is seeking approval—under one of four paragraphs that (I) 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). The first drug manufacturer to file an approved ANDA, containing a paragraph IV certification, is rewarded with a 180-day period of marketing exclusivity for the manufacturer's generic version of the drug. Id. § 355(j)(5)(B)(iv). Marketing exclusivity is valuable, designed to compensate manufacturers for research and development costs as well as the risk of litigation from patent holders. See 35 U.S.C. § 271(e)(2)(A) (stating a generic drug company certifying under paragraph IV commits an act of infringement for which the brand-name drug's patent holder can sue). In this case, we referee an unusual dispute between FDA and an ANDA applicant about the effect of a paragraph IV certification submitted after the patent had been withdrawn by the NDA holder but before FDA deleted the patent information from the hardcopy version of the Orange Book.

FDA insists reality matters. The point of paragraph IV, the Agency argues, is to reward risk when an applicant challenges a patent that would otherwise preclude price competition. Teva Pharmaceuticals counters that FDA's obligations to keep the industry reliably informed is enforced—at least in part—by punishing the Agency's inadvertence when the Orange Book does not reflect the Agency's most current information.

I

Janssen Pharmaceuticals got FDA approval to market Risperdal in 1993 and submitted information for two patents, the '663 patent and the '952 patent. See Letter from Janet Woodcock, M.D., Acting Director, CDER, FDA to D. Jaskot, M.S., R.A.C., Teva Pharmaceuticals USA, regarding Docket No. 2007P-0316/CP1 and CR1 (February 26, 2008) ("FDA Letter") at 4. FDA listed both patents in the Orange Book. On April 4, 2001, Janssen withdrew the '952 patent for several different strengths of the drug, and on June 11, 2001 sent FDA a clarification requesting the withdrawal of remaining strengths. Id. FDA modified its patent listing database on June 11, 2001 and updated the electronic Orange Book to reflect the delisting sometime between June 29, 2001 and July 20, 2001. Id. FDA conceded in its brief that neither the printed Orange Book nor its printed cumulative supplement reflected the delisting until 2002.

Meanwhile, on August 28, 2001, Teva submitted an ANDA for a generic version of Risperdal, containing a paragraph IV certification to the '952 patent. Id. at 5. FDA promptly informed Teva that the '952 patent had been delisted and asked Teva to submit a revised ANDA. Id. Teva acquiesced. Id. Approximately six years later, Teva filed a citizen petition contesting FDA's actions. Id. at 1. Teva asked FDA to relist the '952 patent and confirm Teva's eligibility for the 180-day marketing exclusivity based on their original ANDA. Id. FDA refused. Id.

Teva challenged the decision in district court and sought an expedited preliminary injunction. The district court consolidated the motion for preliminary injunction with the merits case and granted judgment in favor of Teva. On September 12, 2008, we issued an expedited mandate reversing the decision of the district court granting judgment in favor of Teva, and vacating the district court's injunction.

II

At the outset, we reject Teva's claim that FDA raises arguments on appeal not presented to the district court. Teva's confusion is partially explained by its misreading of FDA's decision letter and its tendency to construe the statute's independent publication mandate as if it modified the certification requirement. As explained more fully below, these requirements remain separate. And that is the position consistently asserted by FDA. FDA's effort to refine and clarify its analysis in light of the district court's ruling cannot be transmuted into a waiver of its arguments on appeal. See Yee v. City of Escondido, 503 U.S. 519, 534, 112 S.Ct. 1522, 118 L.Ed.2d 153 (1992) ("Once a federal claim is properly presented, a party can make any argument in support of that claim; parties are not limited to the precise arguments they made below.").

A

Turning to the merits, we review FDA's interpretation of the Act it administers under step one of the two-step analysis in Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ("[T]he court, as well as the agency, must give effect to the unambiguously expressed intent of Congress."). The statute provides that, in order to qualify for the 180-day marketing exclusivity under paragraph IV, an ANDA must contain, inter alia:

[A] certification ... with respect to each patent which claims the listed drug ... or which claims a use for such listed drug for which the applicant is seeking approval ... that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted.

21 U.S.C. § 355(j)(2)(A)(vii) (emphasis added). The same requirement appears, with slight variation, in the FDA regulation. See 21 C.F.R. § 314.94(a)(12). How a manufacturer triggers the 180-day marketing exclusivity is clear under the text of the statute: no ANDA applicant can obtain exclusivity without a proper paragraph IV certification. 21 U.S.C. § 355(j)(5)(B)(iv). A successful paragraph IV certification must identify a patent that "claims the listed drug" or that "claims a use for such listed drug for which the applicant is seeking approval." Id. § 355(j)(2)(A)(vii). In the absence of such a patent, there can be no paragraph IV exclusivity.

Teva's ANDA did not meet the clear and unambiguous requirements of the statute because it did not and could not include a certification to a patent that claimed Risperdal.¹ According to Black's Law Dictionary, a patent claim is "[a] formal statement describing the novel features of an invention and defining the scope of the patent's protection." BLACK'S LAW DICTIONARY 1160 (8th ed.2004). The statute requires NDA holders to ascertain if, under substantive patent law, any patents claim the drugs for which the NDA holder submitted an application and then provide FDA with patent information for any drug which falls within the scope of a patent's protection. 21 U.S.C. § 355(b). The legislative purpose underlying paragraph IV is to enhance competition by encouraging generic drug manufacturers to challenge the patent information provided by NDA holders in order to bring generic drugs to market earlier. Thus, for paragraph IV purposes, a "claim" is simply a description of the subject a patent purports to cover as established by the NDA holder. See Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1088 (D.C.Cir.1996) (recognizing if a statute "clearly requires a particular outcome, then the mere fact that it does so implicitly rather than expressly does not mean that it is `silent' in the Chevron sense"). All patent claim information is provided by the NDA holder. Therefore, as a practical matter, a patent claims a drug when the NDA holder says it does.

When it comes to the veracity of the patent information supplied by NDA holders, FDA operates in a purely ministerial role, relying on the NDA holders to provide the Agency with accurate patent information. See Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1080 (D.C.Cir. 2001). This approach is consistent with the statute, which requires FDA...