ACTAVIS ELIZABETH LLC. v. UNITED States FOOD

• Citation: 625 F.3d 760
• Decision Date: 09 November 2010
• Docket Number: No. 10-5066.,10-5066.
• Parties: ACTAVIS ELIZABETH LLC, Appellant v. UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

625 F.3d 760

ACTAVIS ELIZABETH LLC, Appellant

v.UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Appellees.

No. 10-5066.

United States Court of Appeals,District of Columbia Circuit.

Argued Sept. 20, 2010.

Decided Nov. 9, 2010.

Appeal from the United States District Court for the District of Columbia (No. 1:09-cv-00362).

Chad A. Landmon argued the cause for appellant. With him on the briefs was Robert B. Greenbaum.

Andrew E. Clark, Senior Litigation Counsel, U.S. Department of Justice, argued the cause for federal appellees. With him on the brief were Eugene M. Thirolf Jr., Director, and Eric M. Blumberg, Deputy Chief Counsel, U.S. Department of Health & Human Services. R. Craig Lawrence, Assistant U.S. Attorney, entered an appearance.

George F. Pappas, Peter O. Safir, and Emily J. Henn were on the brief for appellee Shire Pharmaceuticals, Inc.

Before: BROWN, Circuit Judge, and EDWARDS and RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge RANDOLPH.

RANDOLPH, Senior Circuit Judge:

This is an appeal from the order of the district court granting summary judgment against Actavis Elizabeth LLC. In 2007, the Food and Drug Administration approved Vyvanse, a name-brand drug for the treatment of attention deficit hyperactivity disorder. Two years later, Actavis submitted an application for lisdexamfetamine dimesylate, a generic version of the same drug. The FDA returned Actavis' application. It did so because it had previously determined that Vyvanse was entitled to five years of marketing exclusivity under the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act. Actavis brought this action claiming that Vyvanse was not entitled to five years of exclusivity.

I

[1] New drugs, including generic versions of previously approved drugs, may not be marketed without the FDA's approval. Purepac Pharm. Co. v. Friedman, 162 F.3d 1201, 1201 (D.C.Cir.1998). The approval process is governed by the Federal Food, Drug, and Cosmetic Act, as amended by the Drug Price Competition and Patent Term Restoration Act of 1984 (known as the “Hatch-Waxman Amendments”), Pub.L. No. 98-417, 98 Stat. 1585. So-called “new drug applications”-required for “pioneer” drugs that have never before received FDA approval-must be supported by full reports of investigations showing the drug is safe and effective. 21 U.S.C. § 355(b)(1); Serono Labs., Inc., v. Shalala, 158 F.3d 1313, 1316 (D.C.Cir.1998). The Hatch-Waxman Amendments allowed generic versions of previously approved drugs to gain approval through the submission of an “[a]bbreviated new drug application.” 21 U.S.C. § 355(j). ¹ These abbreviated applications reduce the effort required to gain marketing approval by, among other things, allowing the applicant to rely on clinical studies submitted as part of a previous new drug application. Id. § 355(j)(2)(A)(i)- (v); Mylan Labs., Inc. v. Thompson, 389 F.3d 1272, 1275 (D.C.Cir.2004).

The Hatch-Waxman Amendments also grant various periods of marketing exclusivity to certain pioneer drugs approved under § 355(b). The exclusivity provisions protect these drugs from generic competition for the specified terms by preventing the submission of abbreviated applications that refer to them. See 21 U.S.C. § 355(j)(5)(F)(i)-(v). At issue here, § 355(j)(5)(F)(ii) provides that

[i]f an application submitted under subsection (b) of this section for a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application under subsection (b) of this section, is approved after September 24, 1984, no application may be submitted under this subsection which refers to the drug for which the subsection (b) application was submitted before the expiration of five years from the date of the approval....

Id. § 355(j)(5)(F)(ii).

In addition to this five-year period, the Amendments grant three-year exclusivity to drugs that include previously approved active ingredients if the application for the drug “contains reports of new clinical investigations ... essential to the approval of the application and conducted or sponsored by the applicant....” Id. § 355(j)(5)(F)(iii).

The FDA has implemented these exclusivity provisions through regulations. 21 C.F.R. § 314.108. The regulations give five years of exclusivity for each “drug product that contains a new chemical entity.” Id. § 314.108(b)(2). A “new chemical entity” is “a drug that contains no active moiety that has been approved by FDA in any other” new drug application. Id. § 314.108(a). “Active moiety” is defined as “the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.” Ibid. Thus, to qualify for five-year exclusivity under § 355(j)(5)(F)(ii), an approved drug must contain no previously approved active moieties.

In 2005, New River Pharmaceuticals, the predecessor in interest to intervenor-defendant Shire Pharmaceuticals, sought approval to market lisdexamfetamine dimesylate for the treatment of attention deficit hyperactivity disorder under the brand name Vyvanse. Vyvanse received FDA approval on February 23, 2007. The agency determined that the drug was entitled to a five-year period of exclusivity under its regulations. In January 2009, Actavis submitted its abbreviated application for the generic drug lisdexamfetamine dimesylate. ² Its application referenced Vyvanse. The FDA returned Actavis' application unfiled because Vyvanse's period of market exclusivity had not expired. See 21 C.F.R. § 314.101(e)(2). Actavis brought this suit in the district court under the Administrative Procedure Act, seeking to force the agency to rescind its grant of exclusivity to Vyvanse and to accept Actavis' abbreviated application. In response, the agency began its own administrative review of the matter, during which the suit was stayed. In October 2009, the FDA affirmed its original determination, and the case resumed. The district court eventually granted summary judgment to the agency and Shire on all claims.

II

A

To understand Actavis' arguments, it is necessary briefly to describe the chemical structure of lisdexamfetamine dimesylate, the drug molecule in question. Lisdexamfetamine dimesylate is a salt of lisdexamfetamine. Since, under the agency's regulations, salts are not considered active moieties, the agency's analysis centered on the lisdexamfetamine molecule alone. Lisdexamfetamine consists of a portion of lysine, a common amino acid, connected to dextroamphetamine. These two parts are linked by an amide bond, a type of covalent bond that utilizes a nitrogen atom to perform the linking function. ³

What is important is that once it enters the body, lisdexamfetamine undergoes a chemical conversion to produce dextroamphetamine. In industry parlance, this makes lisdexamfetamine a “prodrug” of dextroamphetamine. ⁴ Hawley's Condensed Chemical Dictionary 1043 (15th ed. 2007). Drugs containing dextroamphetamine, but not lisdexamfetamine, had received FDA approval before New River filed its application for Vyvanse.

B

[2] There is little to Actavis' argument that the award of five-year exclusivity to Vyvanse conflicted with the FDA's regulations. The agency interprets its regulations to allow five-year exclusivity for drugs containing derivative molecules of previously approved “active moieties” when those derivative molecules contain non-ester covalent bonds. ⁵ As the FDA explained in its final decision with regard to Vyvanse: “Under FDA's interpretation of its regulation, the active moiety of a molecule with a non-ester covalent bond is the entire molecule, even if the molecule includes a covalent bond to a molecule that was itself previously an active moiety.”

[3] An agency's interpretation of its own regulations is entitled to judicial deference. Mistick PBT v. Chao, 440 F.3d 503, 511 (D.C.Cir.2006). Although a court will reject an agency's interpretation when it is shown to be “plainly erroneous or inconsistent with the regulation,” Actavis has not met that standard. Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994); see also Office of Commc'n, Inc. v. FCC, 327 F.3d 1222, 1224-25 (D.C.Cir.2003).

The regulatory definition of “active moiety” excludes only “those appended portions of the molecule that cause the drug to be an ester, salt ..., or other noncovalent derivative.” 21 C.F.R. § 314.108(a). When the drug molecule is not in the form of an ester, salt, or other noncovalent derivative, the FDA treats the entire molecule as that “responsible for the physiological or pharmacological action of the drug substance,” and therefore a separate “active moiety.” Ibid. Any drug that does not contain a previously approved active moiety is entitled to five-year exclusivity. Id. § 314.108(a), (b)(2). This leaves certain types of prodrugs eligible for five-year exclusivity-namely, those that are not esters, salts, or other types of noncovalent derivatives. The FDA's interpretation is squarely within the language of its regulations. And since lisdexamfetamine contains an amide bond, the FDA properly treated it as an “active moiety” of its own.

C

Actavis spends the bulk of its briefs arguing that the FDA's interpretation is inconsistent with the clear meaning of the statute. Where Actavis sees clarity we see ambiguity.

Under the Hatch-Waxman Amendments, five-year exclusivity is granted to drugs “no active ingredient (including any ester or salt of the active ingredient) of which” has been approved in a prior new drug application. 21 U.S.C. § 355(j)(5)(F)(ii). Actavis thinks this language prevents the FDA from granting five-year exclusivity to any drug containing a drug...