Alpharma, Inc. v. Leavitt

• Decision Date: 11 August 2006
• Docket Number: No. 05-5137.,05-5137.
• Citation: 460 F.3d 1
• Parties: ALPHARMA, INC., Appellant v. Michael O. LEAVITT, Secretary, Health and Human Services, et al., Appellees.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1

460 F.3d 1

ALPHARMA, INC., Appellant v. Michael O. LEAVITT, Secretary, Health and Human Services, et al., Appellees.

No. 05-5137.

United States Court of Appeals, District of Columbia Circuit.

Argued February 10, 2006.

Decided August 11, 2006.

Appeals from the United States District Court for the District of Columbia (No. 83cv01603).

Douglas J. Behr argued the cause for appellant. With him on the briefs was John B. Dubeck.

Suzette A. Smikle, Attorney, U.S. Department of Justice, argued the cause for appellees. With her on the brief were Peter D. Keisler, Assistant Attorney General, Eugene M. Thirolf, Director, and Drake Cutini, Attorney.

Before: GARLAND, Circuit Judge, and SILBERMAN and WILLIAMS, Senior Circuit Judges.

Opinion for the court filed by Circuit Judge GARLAND.

Opinion concurring in part and dissenting in part filed by Senior Circuit Judge WILLIAMS.

GARLAND, Circuit Judge.

This is the second time we have heard an appeal in this matter. In our first opinion, we concluded that the Food and Drug Administration (FDA) had failed to adequately explain why it granted Philips Roxane, Inc.'s "new animal drug application" for bacitracin zinc.¹ See A.L. Pharma, Inc. v. Shalala, 62 F.3d 1484, 1486 (D.C.Cir.1995). In this opinion, we conclude that the explanation the FDA offered on remand adequately addressed the questions raised in our first opinion. Nonetheless, we agree with appellant Alpharma, Inc.² that the FDA's explanation raises new problems and apparent contradictions that, unfortunately, require yet another remand.

I

The "tortured story" of this case is recounted at length in our previous opinion, A.L. Pharma, 62 F.3d at 1486, and in two district court opinions, A.L. Pharma, Inc. v. Thompson, No. 83-1603, Mem. Op. (D.D.C. Feb. 4, 2005), and A.L. Labs. v. Shalala, No. 83-1603, 1993 U.S. Dist. LEXIS 21357 (D.D.C. Dec. 21, 1993). We retell it only briefly here.

Under the Food, Drug, and Cosmetic Act (the "Act"), a manufacturer must apply to the FDA for approval to market a new animal drug. 21 U.S.C. § 360b. To gain approval, a manufacturer must submit a "new animal drug application" (NADA) demonstrating that the drug is both safe and effective under the conditions "prescribed, recommended, or suggested in the proposed labeling." 21 U.S.C. § 360b(d)(1)(A) & (E); see id. § 360b(a)(1) & (b)(1); 21 C.F.R. § 514.1.

In the early 1970s, the Animal Health Institute, an industry trade association, coordinated a safety study on bacitracin zinc. There is no dispute that the study provided an adequate basis for the FDA's subsequent conclusion that Philips Roxane's bacitracin zinc product met the Act's safety requirements. See A.L. Pharma, 62 F.3d at 1486. The study did not, however, address the statute's efficacy requirement.

The FDA has allowed manufacturers of certain classes of drugs to establish a drug's efficacy by using a "regulatory shortcut" known as "bioequivalency." A.L. Pharma, 62 F.3d at 1488. The agency determined that, for those classes, applicants did not need to conduct their own field studies to prove that their products were effective. Instead, an applicant could establish a generic drug's efficacy by demonstrating that it was "bioequivalent" to a "benchmark" drug that the FDA had already found to be effective for the same intended uses. See id. at 1487; see also Tri-Bio Lab., Inc. v. United States, 836 F.2d 135, 138-39 (3d Cir.1987).

In July 1970, the FDA found that bacitracin zinc products were effective for increased rate of weight gain and improved feed efficiency in poultry. See Bacitracin With or Without Penicillin; Drugs for Veterinary Use; Drug Efficacy Study Implementation, 35 Fed.Reg. 11,531 (July 17, 1970). Based on that finding, the FDA permitted applicants submitting NADAs for bacitracin zinc intended for those uses to establish the efficacy of their products by showing they were "bioequivalent" to the benchmark drugs upon which the FDA had based its initial finding. See New Animal Drugs for Use in Animal Feeds Bacitracin Zinc; NAS/NRC Update, 46 Fed.Reg. 37,043, 37,044 (July 17, 1981) (codified at 21 C.F.R. § 558.78).

On May 28, 1981, Philips Roxane submitted an application to the FDA for approval of its generic version of bacitracin zinc. To establish bioequivalence, Philips Roxane's application, which the FDA designated as NADA 128-550, relied on a 1978 study conducted by Dr. John Prescott of the University of Guelph in Ontario, Canada ("Prescott Study"). Prescott tested the Philips Roxane product alongside a benchmark drug produced by International Minerals & Chemical Corp. The study was designed to determine whether the two were equally effective in treating experimentally-induced necrotic enteritis in a population of chickens when administered at a single dosage. See New Animal Drugs for Use in Animal Feeds; Bacitracin Zinc, 47 Fed.Reg. 35,187 (August 13, 1982); see also Prescott Aff. ¶ 4 (J.A. 98). Prescott concluded that the two drugs were equally effective for that purpose. See Prescott Aff. ¶ 4.

On August 13, 1982, the FDA approved NADA 128-550. Based on the Animal Health Institute study, the agency determined that Philips Roxane's bacitracin zinc product was safe. See A.L. Pharma, 62 F.3d at 1486. Based on the Prescott Study, it found that Philips Roxane's product was bioequivalent to the International Minerals benchmark. See 47 Fed.Reg. at 35,187. And based on the finding of bioequivalence, the agency concluded that Philips Roxane's bacitracin zinc was effective for increasing weight gain and improving feed efficiency in broiler chickens. Id.

Appellant Alpharma manufactures an approved bacitracin zinc product that is similar to the product covered by NADA 128-550. After Philips Roxane's application was granted, Alpharma filed four "citizen petitions" asking the FDA to revoke its approval of NADA 128-550.³ The agency rejected all four petitions. On June 6, 1983, Alpharma brought suit in the United States District Court for the District of Columbia under the Administrative Procedure Act (APA), 5 U.S.C. § 701 et seq., challenging the FDA's approval of NADA 128-550. The district court granted the FDA's motion for summary judgment on December 21, 1993, and Alpharma appealed.

Alpharma's appeal disputed the FDA's conclusion that the Prescott Study established bioequivalence between the Philips Roxane product and the benchmark drug.⁴ Alpharma relied on affidavits and letters submitted by sixteen "highly credentialed scientists, all of whom questioned the bioequivalency conclusion." A.L. Pharma, 62 F.3d at 1488; see id. at 1490. Alpharma asserted that the "unanimous views of these experts conclusively establish[ed] that the FDA acted arbitrarily and thus illegally when it refused to rescind its approval of the NADA." A.L. Pharma, 62 F.3d at 1490. Alpharma offered two principal criticisms of the Prescott Study.

Alpharma's first contention was that a comparison of the two products' relative effectiveness for the purpose of fighting a disease (necrotic enteritis) was not a proper measure of bioequivalence for the purpose of promoting growth rates and feed efficiency—the product's intended use. The FDA responded that it had already determined the benchmark product's efficacy for the latter purpose; hence, the function of a bioequivalence study was not to determine the new product's efficacy for that purpose, but rather to determine "whether the drug's delivery mechanism operates similarly to that of the benchmark product." Id. at 1491. The FDA noted that the usual method of establishing bioequivalence, measuring levels of the drug in blood, was not possible for bacitracin zinc. And it further noted that, because "the expected differences [between the performance of drugs in the necrotic enteritis study] are much greater than those for growth experiments," a comparison of "the drugs' abilities to fight disease was perhaps even a better measure of the similarities of their delivery mechanisms than a direct comparison of [their] effects on growth promotion." Id. (internal citation and quotation marks omitted). Concluding that this "position reflect[ed] a scientific determination within the scope of the FDA's expertise," we deferred to it. Id.

We were unwilling, however, to accept the agency's response to Alpharma's second criticism. Alpharma's experts argued that the Prescott Study could not prove that the two drugs "were equivalent for the purpose of fighting necrotic enteritis, because the two drugs were tested at a single dosage." Id. at 1490. To reach the conclusion that the drugs were equivalent, they maintained, "different dosages would have to be tested and dose-response curves for the two products constructed and compared." Id. Without the benefit of multi-dosage testing, "there [was] no way to rule out the possibility that one of the drugs barely reached effectiveness at the dosage tested while the other would have been effective against the disease at a fraction of the dose." Id. The FDA's response to this second critique was brief: It "`d[id] not believe that it [was] necessary to test different levels of the drugs and compare dose-response curves' in order to show `that the biological activity of the two drugs against a known disease organism was not significantly different.'" Id. (citing Citizen Pet. Denial at 2).

Finding this response "conclusory," we held that the FDA had "made no attempt to `cogently explain'" why Alpharma was mistaken in claiming "that a single-dosage study cannot prove bioequivalency." Id. at 1492 (quoting Motor Vehicle Mfr's Ass'n. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 48, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983)). In light of that failure, we set aside the district court's grant of summary judgment (but not the FDA's approval itself), and remanded the case "so that the FDA may explain what bioequivalency entails in the animal drug context and how the Prescott Study satisfied that standard." Id.

The FDA's...