Depomed, Inc. v. U.S. Dep't of Health & Human Servs.
Decision Date | 05 September 2014 |
Docket Number | Civil Action No. 12–cv–1592 KBJ |
Court | U.S. District Court — District of Columbia |
Parties | Depomed, Inc., Plaintiff, v. United States Department of Health and Human Services, et al., Defendants. |
Jessica L. Ellsworth, Judith E. Coleman, Hogan Lovells US LLP, Washington, DC, for Plaintiff.
Andrew E. Clark, US Department Of Justice, Washington, DC, for Defendants.
Plaintiff Depomed, Inc. (“Depomed”) is a pharmaceutical company that, as relevant here, has developed a drug to treat a rare condition known as post-herpetic neuralgia (“PHN”).1 Depomed contends that its drug, which is called Gralise, was automatically entitled to a seven-year period of marketing exclusivity under the Orphan Drug Act (the “Act”), 21 U.S.C. §§ 360aa –360ee, once the drug satisfied two statutory requirements: (1) designation by the Food and Drug Administration (“FDA”) as a so-called “orphan drug” for use in treating a rare disease or condition, and (2) receipt of FDA approval to be marketed to the public. Depomed brought the instant action against the FDA, the United States Department of Health and Human Services, and both agencies' respective directors (collectively “Defendants”) after the FDA refused to recognize the exclusivity period for Gralise despite its having met the statutory criteria; the one-count complaint alleges that such refusal violated the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701 –706. Defendants do not dispute that the FDA has designated Gralise an orphan drug and has approved it to be marketed for treatment of PHN. Nevertheless, Defendants maintain that the FDA was not required to grant Gralise orphan drug exclusivity in the instant case because the FDA has already granted marketing approval to a drug called Neurontin
for treatment of PHN, and according to the FDA, Depomed has not proven that Gralise is “clinically superior” to Neurontin—a requirement that the FDA has imposed because Gralise and Neurontin have the same active ingredient (gabapentin).2 Through the instant action, Depomed requests declaratory and injunctive relief that, in essence, would force the FDA to recognize that Gralise is entitled to the statutory exclusivity period.
Before this Court at present are two dispositive motions: Plaintiff's motion for summary judgment, and Defendants' motion to dismiss or, in the alternative, for summary judgment regarding the complaint's allegation of a violation of the APA. Because this Court finds that the plain language of the Orphan Drug Act unambiguously requires the FDA to recognize that any drug that has been both designated as an orphan drug for treatment of a qualifying disease or condition and also approved for marketing is entitled to an exclusivity period, the Court will GRANT Plaintiff Depomed's motion for summary judgment and will DENY Defendants' motion to dismiss or, in the alternative, for summary judgment. Accordingly, judgment will be entered in Depomed's favor in this action, and the Court will order the FDA to recognize orphan-drug marketing exclusivity for Gralise for a period of seven years from the date the FDA approved Gralise for marketing. A separate order consistent with this opinion will follow.
This case turns on the parties' competing interpretations of the statutory text and implementing regulations of the Orphan Drug Act. Congress enacted the Orphan Drug Act in 1983 as an amendment to the Food, Drug, and Cosmetic Act (“FDCA”). See Orphan Drug Act, Pub.L. No. 97–414, 96 Stat.2049 (1983) (codified at 21 U.S.C. §§ 360aa –360ee (2012) ). The Act's fundamental purpose is to provide drug manufacturers with incentives to research and develop so-called “orphan drugs[,]” see id. §§ 1(b)(1)–(3), which are drugs that treat certain “rare disease[s] or condition[s][,]” 21 U.S.C. § 360bb(a)(1).3 As explained in the relevant congressional findings, prior to the Act's passage, it was considered generally financially impractical for pharmaceutical companies to develop such drugs. See § 1(b)(4), 96 Stat. at 2049 ( ). Because Congress believed that it was “in the public interest” that orphan drugs be developed, it enacted the Act “to reduce the costs of developing such drugs and to provide financial incentives to develop such drugs[.]” Id. at §§ 1(b)(5)–(6).
Id. In other words, the plain language of the statute sets forth two procedural prerequisites for marketing exclusivity: first, the FDA must have “designated” the drug as an orphan drug, upon request from the drug's sponsor, pursuant to 21 U.S.C. § 360bb and its accompanying regulations5 ;and second, the FDA must have “approved” the designated orphan drug for marketing to the public pursuant to 21 U.S.C. § 355, which is the section of the FDCA that provides the general procedure for marketing approval of all the pharmaceutical products that the FDA regulates. If both conditions are met, then the Act provides that the FDA “may not approve another” such drug for marketing to the public for “seven years from the date” of the designated drug's approval. 21 U.S.C. § 360cc(a).
Congress also provided two exceptions to the statutorily-mandated exclusivity period. Under the statute, the FDA may approve the marketing of subsequent drugs without regard to an existing exclusivity period if:
See id. § 360cc(b).
21 C.F.R. § 316.31(a) (2012) (emphasis added). Elsewhere, the regulations define the term “same drug”—a term that the regulations use in place of the statutory term “such drug” that appears in 21 U.S.C. § 360cc —to mean, in relevant part, “a drug that contains the same active moiety as a previously approved drug and is intended for the same use as the previously approved drug,” with the exception “that if the subsequent drug can be shown to be clinically superior to the first drug, it will not be considered to be the same drug.” 21 C.F.R. § 316.3(b)(13)(i).
The insertion of the “same drug” concept into the exclusivity regulations effectively limits the scope of exclusivity protection because under the regulations, only if a new drug uses the same active ingredient (“active moiety”) to treat the same disease or condition as a drug that already has orphan-drug exclusivity and the new drug is also not found to be “clinically superior” to the existing orphan drug will the FDA consider the new drug to be the “same” as the drug with exclusivity and thereby forbid its marketing within the exclusivity period. Id. ; id. § 316.31(a). Put another way, if the new drug is “clinically superior” to the drug with orphan-drug exclusivity—i.e., the new drug has a “significant therapeutic advantage over and above” an “approved orphan drug[,]” 21 C.F.R. § 316.3(b)(3) —then the drugs are not considered to be the “same,” and the FDA may approve the new drug notwithstanding the exclusivity period.
In short, the FDA's regulations permit the FDA to ignore a previously-approved drug's orphan-drug exclusivity in order to approve a new, clinically superior drug with the same active ingredient that will be marketed for treatment of the same disease or condition.6
Under the Act's implementing regulations, a finding of clinical superiority is also relevant at the designation stage of the...
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