Braeburn Inc. v. U.S. Food & Drug Admin.

• Decision Date: 22 July 2019
• Docket Number: Civil Action No. 19-982 (BAH)
• Citation: 389 F.Supp.3d 1
• Parties: BRAEBURN INC., Plaintiff, v. UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Defendants, and Indivior Inc., Intervenor-Defendant
• Court: U.S. District Court — District of Columbia

389 F.Supp.3d 1

BRAEBURN INC., Plaintiff,

v. UNITED STATES FOOD AND DRUG ADMINISTRATION, et al., Defendants,andIndivior Inc., Intervenor-Defendant

Civil Action No. 19-982 (BAH)

United States District Court, District of Columbia.

Signed July 22, 2019

Brian Burgess, William M. Jay, Goodwin Procter LLP, Prescott Moore Lassman, Lassman Law+Policy, Washington, DC, Gerard Justin Cedrone, Sarah K. Frederick, Goodwin Procter LLP, Boston, MA, for Plaintiff.

Roger Joseph Gural, U.S. Department of Justice, Washington, DC, for Defendant.

Michael D. Shumsky, Kurt R. Karst, Sara Wexler Koblitz, Hyman, Phelps & McNamara, P.C., Washington, DC, for Intervenor Defendant.

MEMORANDUM OPINION

BERYL A. HOWELL, Chief Judge

Both the plaintiff, Braeburn Inc., and the intervenor-defendant, Indivior Inc., are pharmaceutical companies that manufacture drug products using buprenorphine

, a safer alternative to methadone, to treat moderate-to-severe opioid use disorder ("OUD"). All parties recognize the serious national public health problem posed by OUD and the need for effective treatment options for patients with this addiction. Braeburn's product, Brixadi, delivers buprenorphine through an injectable depot that releases buprenorphine over either a weekly or monthly period. In July 2017, Braeburn applied to the Food & Drug Administration ("FDA") for approval of Brixadi and, on December 21, 2018, received tentative approval for both Brixadi Weekly and Monthly. The critical hitch prompting this lawsuit is that, while Brixadi Weekly could receive final approval once Braeburn submitted proposed labeling to the FDA, Brixadi Monthly was not eligible for final approval until November 30, 2020, upon expiration of a three-year right to exclusivity, under 21 U.S.C. § 355(c)(3)(E)(iii), belonging to Indivior's buprenorphine drug product, Sublocade, which also is an injectable depot that releases buprenorphine over a one-month period.

Braeburn instituted this action on April 9, 2019 against the FDA and the Department of Health and Human Services, as well as the heads of those agencies in their official capacities, challenging the FDA's determination that Brixadi Monthly cannot be finally approved until Sublocade's three-year exclusivity expires. See generally , Compl., ECF No. 1. Shortly after, Indivior intervened as a defendant. Mot. Intervene, ECF No. 13; see also 1st Min. Order (Apr. 12, 2019) (granting Indivior's motion to intervene).

Now pending before the Court are cross-motions for summary judgment filed by Braeburn, ECF No. 24, Indivior, ECF No. 26, and the FDA, ECF No. 28. For the reasons explained below, Braeburn's motion is granted and both Indivior's motion and the FDA's motion are denied.¹

I. BACKGROUND

A. Statutory and Regulatory Background

1. New Drug Applications

Under the Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. § 301 et seq. , new drugs may not be introduced into interstate commerce without the FDA's approval. Id. § 355(a). To obtain FDA approval for a new drug, the drug's sponsor must file an application containing, inter alia , "full reports of investigations which have been made to show whether or not such drug is safe for use and whether such drug is effective in use." Id. § 355(b)(1)(A). Originally, "all such applications were standalone applications: applications for which the drug's proponent either conducted, or secured a right to reference, all the investigations used to demonstrate the drug's safety and efficacy." Otsuka Pharm. Co. v. Price ("Otsuka II "), 869 F.3d 987, 989 (D.C. Cir. 2017).

That changed in 1984 when Congress passed the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. 98–417, 98 Stat. 1585 ("Hatch-Waxman Amendments"), amending the FDCA to introduce two streamlined paths for the sponsor of a new drug to seek FDA approval. The path utilized by the drugs at issue here, pursuant to § 505(b)(2) of the FDCA, as amended, allows a new-drug sponsor to rely on investigations that were "not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted," 21 U.S.C. § 355(b)(2) (codifying § 505(b)(2) of the FDCA), rather than conduct all its own investigations of the new drug's safety and effectiveness. Such an application must meet the remaining requirements codified in § 355(b)(1) and must certify that marketing the new drug would not infringe certain patent protections. Id. § 355(b)(2)(A). These applications may be "submitted for either a change to a previously approved drug or for an entirely new chemical entity, and, in some instances, may describe a drug product with substantial differences from a listed drug." Administrative Record ("AR") 412 (sealed).²

2. New Drug Exclusivity

Permitting new-drug sponsors to rely upon a competitor's safety and efficacy investigations risks free riding. See Otsuka II , 869 F.3d at 990. To forestall that problem, the Hatch-Waxman Amendments also established conditions under which new drugs are entitled to a period of market exclusivity. See Hatch-Waxman Amendments § 103(b). Blending streamlined paths for a new-drug sponsor to obtain FDA approval with exclusivity protections was designed "to balance the need to ‘make available more low cost generic drugs by establishing a generic approval procedure’ with new incentives for drug development in the form of exclusivity and patent term extensions." AR 411 (sealed) (quoting H.R. Rep. No. 98-857, pt. 1, at 14–15 (1984), as reprinted in 1984 U.S.C.C.A.N. 2647–48). Additionally, "[t]hese pathways permit sponsors to rely on what is already known about the previously approved drug, which both allows for speedier market entry than would be possible with a full, standalone 505(b)(1) [new drug application] and leads to increased competition." AR 411 (sealed); see also Otsuka Pharm. Co. v. Burwell ("Otsuka I "), 302 F. Supp. 3d 375, 382 (D.D.C. 2016) (explaining that the Hatch-Waxman Amendments balanced "two competing interests in the pharmaceutical industry: (1) inducing pioneering research and development of new drugs[,] and (2) enabling competitors to bring low-cost, generic copies of those drugs to market").

One form of exclusivity lies at the crux of the parties' dispute. In full, the relevant provision reads:

If an application submitted under subsection (b) for a drug, which includes an active ingredient (including any ester or salt of the active ingredient) that has been approved in another application approved under subsection (b), is approved after September 24, 1984, and if such application contains reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application and conducted or sponsored by the applicant , the Secretary may not make the approval of an application submitted under subsection (b) for the conditions of approval of such drug in the approved subsection (b) application effective before the expiration of three years from the date of the approval of the application under subsection (b) if the investigations described in clause (A) of subsection (b)(1) and relied upon by the applicant for approval of the application were not conducted by or for the applicant and if the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.

21 U.S.C. § 355(c)(3)(E)(iii) (italics and underlining added). The italicized portion of the statute is referred to as the "eligibility clause" and the underlined portion as the "bar clause." See AR 414 (sealed); see also Otsuka I , 302 F. Supp. 3d at 392 (adopting this naming convention). By regulations not challenged here, the FDA has expanded on the meaning of certain terms in the eligibility clause, namely: "active ingredient" has been construed to mean "active moiety," 21 C.F.R. § 314.108(b)(4)(iii),³ and "new clinical investigation" has been defined to mean an investigation producing results "which have not been relied on by FDA to demonstrate substantial evidence of effectiveness of a previously approved drug product for any indication or of safety for a new patient population" and which are not duplicative of "the results of another investigation that was relied on by the agency to demonstrate the effectiveness or safety in a new patient population of a previously approved drug product," id. § 314.108(a). In sum, then, § 355(c)(3)(E)(iii) "confers exclusivity when a pharmaceutical company obtains approval to market a previously approved active moiety in a new formulation or for new purposes, and doing so requires it to furnish new clinical investigations to the FDA. With regard to the scope of drugs affected by the three-year exclusivity period, the FDA may not approve an abbreviated application for the same ‘conditions of approval of such drug in the [first-in-time] application.’ " Otsuka II , 869 F.3d at 990.

3. Orphan Drug Exclusivity

A second form of exclusivity—orphan-drug exclusivity ("ODE")—lurks in the background of this case. In 2017, Congress amended the circumstances under which a drug is entitled to ODE. See FDA Reauthorization Act of 2017 ("FDARA"), Pub. L. 115-52, 131 Stat. 1005. For this case, what spurred those amendments matters as much as the current statute governing ODE and, thus, this section addresses both.

Before a new-drug sponsor applies for approval under § 355(b), the sponsor may ask the FDA "to designate the drug as a drug for a rare disease or condition." 21 U.S.C. § 360bb(a)(1). If the FDA finds that the drug under development will treat a rare disease or condition, the FDA shall designate the drug accordingly. Id. Rare diseases and conditions are those affecting "less than 200,000 persons in the United States" or those for which the treatment drug is not likely to be profitable. Id. § 360bb(a)(2). Drugs that treat diseases or conditions of this sort are known as orphan drugs. Consequently, the designation available...